Difference Between Economic and Non-Economic Activities

Edited by Diffzy | Updated on: June 06, 2023


Difference Between Economic and Non-Economic Activities

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People engage in a variety of activities to either earn a living or learn something new. Individuals learn a lot from these activities. For example, participating in a group activity improves our leadership, teamwork, and so on. Everything we perform daily can be classified as an activity. Playing games or participating in a variety of activities instills a sense of attributes in a person. There are now two major types of activities: economic and non-economic activities. So, what is the difference between economic and non-economic activities? What are the distinctions between these two? What significance do they have in a person's life? You may have these queries about these terms. So, let us begin by learning what these terms mean.

Economic vs Non-economic Activities

Economic activity is any human action that is undertaken in return for money or money's worth. Non-economic activities, on the other hand, are any acts that do not have a monetary objective and are undertaken out of love, sympathy, or humanity. The primary distinction between economic and non-economic activities is that economic activities are conducted to meet human requirements, whereas non-economic activities take place to acquire psychological gratification.

Difference Between Economic and Non-economic Activity in Tabular Form

MeaningEconomic activity is defined as human activity that involves the production and consumption of products and services for monetary gain.Non-economic action is done for the pleasure of providing services to others rather than for monetary gain.
MotiveEconomic, that is, to make money.Social or psychological reasons, such as love, affection, etc.
SectorsThere are three types of economic activities: primary, secondary, and tertiary.There are no non-economic activity sectors; rather, they depend on interests, routines, hobbies, and so on.
GoalThe primary goal of economic activity is to make money, which is accomplished through providing service and earning monetary compensation.The primary goal of non-economic activities is to improve psychologically and emotionally.
Results inWealth and asset creation.Happiness and fulfilment.
National IncomeEconomic activity contributes to national income.Non-economic activities have no impact on national income.
Common FormsBusiness, employment, and other forms of economic activity are the most common.Self-satisfaction and societal duty are two of the most common types of non-activities.

What Are Economic Activities?

Any actions or transactions involving the manufacturing, transportation, and consumption of products or services are considered economic activities. These activities, which include agriculture, manufacturing, construction, retail, and service industries, are critical to the running of an economy.

Primary, secondary, and tertiary economic activity can be classified. Agriculture, mining, and fishing are examples of primary sector activities. Manufacturing and construction are examples of secondary sector activities. Retail, healthcare, and education are examples of tertiary activities.

Economic activities also include the trade of products and services for money, which is made possible by financial organizations such as banks. Economic activities also produce revenue and job opportunities, which drive the economy.

Economic variables such as demand and availability, rates of interest, and government regulations all have an impact on economic activity.

A rise in demand for a specific product, for example, can lead to a boost in production and job possibilities, but a rise in interest rates can result in a drop in borrowing and expenditure. Taxes and restrictions imposed by the government can also have an impact on economic activity.

Characteristics of Economic Activities

We will now observe several distinguishing elements of economic activities that will assist us in determining and separating economic activities from non-economic activities.


Every economic activity generates some type of income. It is not necessary for such income to be monetary; it might be of any type. So, if the activity provides a means of subsistence for the person and creates any type of revenue for him, it is an economic activity. An example of economic activity is a laborer who works on a farm and is rewarded with produce.

So, when you employ any of the variables involved in manufacturing (land, capital, labour, entrepreneur) and generate an income in the form of wages, salary, rent, royalty, profit, and so on, we will describe your activity as an economic activity. For instance, renting property.


If the activity is a source of income, it implies that some aspect of the manufacturing process was involved. So, to be productive, economic activity must entail some part of the production of products and/or services.

Let us look at a few examples. An industrial worker creates things, a software engineer creates services, and a teacher likewise creates services. In a similar way, farming is an economic activity because it contributes to output.

It is worth noting that even if the output is for personal consumption, it is still an activity of production and hence economic activity. Because it will continue to add to the market's overall supply. Furthermore, any other activities such as storage, transportation, and so on that help get items to market are productive economic activities.


Consumption is the market's demand side. It is what drives the production and distribution of products and services. Consumption of commodities encourages market rivalry and the creation of better items. Consumption stimulates production; hence it is an economic activity in and of itself.


Savings are earnings that are not spent. Savings can be invested in a wide range of vehicles, including savings accounts, deposit accounts, mutual funds, the stock market, real estate, gold, and so on. As a result, such an investment results in riches. The commercial and public sectors then borrow such funds to make investments in their businesses and expand the country's economic activity.

Types of Economic Activity

Economic activities include anything that includes the exchange of money or products or services. The three sorts of economic activities are as follows:


To generate money, this economic activity involves delivering products and services to suit the requirements of daily people.


The term "profession" can also apply to a job or vocation that entails giving skilled services to the public for a charge.


The task is done in line with the provisions of a written contract between the boss and the worker. Employees in this arrangement are employed by the company and receive compensation (wages or salary) for their efforts.

Examples of Economic Activity

These are the activities associated with the production, shipment, and consumption of products and services. Here are several examples:

Farming is the process of growing crops or producing livestock for sale.

Manufacturing is the process of manufacturing items in a factory.

Retail: Consumers are selling things at retail stores.

Finance: lending or managing investments

Transportation is the movement of people or things from one location to another. The monetary value of such activities is indicated.

What Are Non-economic Activities?

Non-economic activities are actions or transactions that don't include the manufacture, distribution, or consumption of products or services. Although these activities have no direct connection to the economy, they can influence it. Volunteering, parenting, and recreational hobbies are examples of non-economic activities.

Non-economic activities are divided into three categories: social, cultural, and personal. Volunteering or attending community events are examples of social activities that entail engaging with others.

Cultural activities are activities involving the arts, such as going to a museum or listening to music. Personal activities, such as exercising or reading, are actions that entail self-care or personal development.

Non-economic activities have a substantial economic influence since they can contribute to the generation of novel concepts, creativity, and innovation. Furthermore, non-economic activities can contribute to the creation of human capital, which is necessary for economic growth.

Non-economic activities may additionally contribute to the creation of social wealth, which means the trust, norms, and connections that enable individuals to cooperate and coordinate. Social capital is necessary for society to function and can contribute to the establishment of a more robust and sustainable economy.

Characteristics of Non-Economic Activity

The characteristics that follow must be met in order to be categorized as non-economic activities:

Self-satisfaction: Non-economic activities include those that are undertaken purely to satisfy one's personal desires.

Obligatory: Non-economic tasks can be performed as an act of obligation or force in order to meet societal norms, even though no monetary advantage is generated.

There is going to be no monetary reward: The greatest defining aspect of any such activity is that the person who participates receives no financial advantage from the event's participants. As a result, these tasks are no longer deemed economically vital. These are either strictly for enjoyment or are socially required.

Examples of Non-Economic Activity

Non-economic activities are those that do not include the manufacturing, distribution, or use of products and services. Here are several examples:

Volunteering: unpaid assistance to a community organization.

Child-rearing: caring for children without obtaining compensation.

Hobbies: hobbies such as art or athletics that are not financially rewarding.

Household Work: Cleaning, cooking, and other household duties that do not generate an income are examples of household work.

Socializing: Socializing is defined as interacting with relatives or close friends for no monetary gain.

How Can You Tell if a Human Activity Is Economic or Non-economic?

Every single person engages in a wide range of activities on any given day. We do both daily jobs and activities for enjoyment and fulfilment. As a result, we can conclude of the activities we engage in to make a livelihood are, in general, regarded as economic activities. All other activities are classified as non-economic activities.

The fact that economic actions are driven by reason and logic distinguishes them. We participate in these operations because we believe it is in our best interests.

We'll assess the benefits we get from participating in such activities.

Non-economic actions, on the other hand, are those that are undertaken out of a psychological desire or out of concern for another person.

Religion, philanthropy, social contact, patriotism, and relaxation are all non-economic hobbies.

Determining the purpose of an activity, on the other hand, is not always simple. Painting is a non-economic activity if done for pleasure. However, if you decide to sell your art, it becomes a type of economic activity.

As a result, the motive for participating in any task is a good indicator of its nature.

Main Differences Between Economic and Non-economic Activity in Points

The distinction between economic and non-economic activities is obvious on the following grounds:

  • Economic activities are defined as any activity that involves the manufacturing and consumption of products and services for monetary benefit. Non-economic activity is defined as an activity undertaken happily with the goal of giving services without regard for monetary benefit.
  • Economic operations are carried out with the goal of making a profit. The funds will be transferred immediately to post account opening from the competition bank.
  • Economic activities are measured in terms of money, whereas non-economic activities are not measured in monetary terms.
  • Economic operations have a practical approach, dealing with issues in a realistic manner. Non-economic activities, on the other hand, have a Platonic perspective in which human values take precedence over money.
  • Economic activities generate and accumulate wealth because they are carried out for profit. In contrast to non-economic pursuits that provide mental gratification and contentment.
  • Economic activities are critical to the economy since they contribute to the country's gross domestic product (GDP). In contrast to non-economic activities, they have no impact on a country's national income.


With the preceding discussion, it is evident that the only difference between these two actions is the purpose. The same action can be both economic and non-economic at the same time; as an example, If a father drives his child to school in a Van, this is a non-economic activity because he drops his kid out of care and affection, but if there are five kids in the Van who pay money for conveyance to him, that is an economic activity because the person is paid for that service.

So, when a person provides services out of affection or love, that is non-economic activity; however, when that person pays money for those services, that is economic activity.


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"Difference Between Economic and Non-Economic Activities." Diffzy.com, 2023. Mon. 25 Sep. 2023. <https://www.diffzy.com/article/difference-between-economic-and-non-economic-activities>.

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