Problem

Decreasing consumer choice

Other Names:
Limited range of consumer goods
Lack of service selection
Nature:
Largely as a consequence of the economic consequences of mass production techniques and economies of scale, the variety in certain classes of goods effectively available to the consumer has decreased.

There is the risk that the manufacturer or planning authority may be out of touch with what consumers want and are prepared to buy. Some goods may consequently be over-produced so that unsold stocks pile up in the shops. In other cases, production may be insufficient to meet consumer demands, so that shortages occur. Furthermore, the emphasis of the producer can easily become too geared to quantity, with insufficient regard being given to the quality or suitability of the product to consumer requirements.

Incidence:
In more or less centrally-planned economies, the size of the planning authority's task can lead to delays and mistakes, and the more centralized the planning the more serious the mistakes. In Poland, for example, a family may have to wait eight to twelve years for a suitable apartment and four to five years for a car, even if they already have the purchase money. In Czechoslovakia, a bottle of whisky costs one-eighth of an average month's salary.
Claim:
1. In countries with a more or less free economy, the consumer can generally choose between the national product and the imported product, subject to the payment of customs duty. In a collectivist economy, exporters' efforts, crucial when it comes to trade with a free economy, play a minor role compared with the decisions taken by planning bodies of the government.

2. If you like it, they don't have it in your size. If you like it and its fits, you can't afford it. If you like it and it's in your size, it doesn't fit anyway.

Counter Claim:
One of the advantages of an administered economy is that, when it wants to do so, the planning authority can give a high priority to meeting the basic needs of people for food, shelter, clothing and so on. It also enables an overall view to be taken of the way in which resources are being used, and helps to avoid socially undesirable duplication of production by a number of enterprises.
Related Problems:
Inadequate selection methods
Problem Type:
D: Detailed problems
Date of last update
09.03.1997 – 00:00 CET