Utility Definition

Utility is the power of a commodity that satisfies the wants of consumer. So, it is the want satisfying power of a commodity. Utility is a psychological phenomenon. It is a feeling of satisfaction, pleasure and happiness or well being which a consumer derives from the consumption, possession or the use of a commodity.


  • According to Jevons, “Utility refers to abstract quality whereby an object serves our purpose.
  • In the words of Hibdon, “Utility is the quality of good to satisfy a want.”
  • According to Mrs. Robinson, “Utility is the quality in commodities that makes individuals wants to buy them”.


  1. Utility is Subjective: as it deals with the mental satisfaction of a man. A thing may have different utility to different persons. E.g. Liquor has utility for drunkard but for person who is teetotaller, it has no utility.
  2. Utility is Relative: As a utility of a commodity never remains the same. It varies with time and place. E.g. Cooler has utility in summer not during winter season.
  3. Utility has nothing to do with usefulness: A commodity having utility need not be useful. E.g. Liquor and cigarette are not useful, but if these things satisfy the want of addict then they have utility for him. 
  4. Utility is independent of Morality: It has nothing to do with morality. Use of opium or liquor may not be proper from moral point of view, but as these intoxicants satisfy wants of the opium – eaters, drunkards, they have utility

The terms utility and satisfaction are, for the most part, used interchangeably in economics. But Utility is the expected satisfaction where as satisfaction is the realized utility.

Early economists-classical economists, viz. Jeremy Bentham, Leon Walrus, Carl Menger, etc. and Neo-classical Economist, notably Alfred Marshall- believed that utility is cardinally or quantitatively measurable like height, weight, length, and temperature and air pressure. This belief resulted in Cardinal concept.

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By Hassham

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