The division of things into shares or portions. In
economics, the term refers primarily to the "allocation of resources," the process by which
economic resources get allotted (apportioned, assigned) to their particular uses for directly or indirectly
satisfying human wants. The allocation process in a particular society's economy is the process by which the three fundamental economic questions get answered in that society: What goods and services are produced (and in what quantities)? By which of the various available technological means and recipes are each of these goods and services to be produced from the available
land,
labor and
capital? For whom are each of these goods and services produced? (Which specific individuals get to use/consume each unit of each good or service produced?)
Thus one may speak of "market allocation" of resources, "forcible allocation" of resources, "governmental allocation" of resources, "traditional" (or "customary") allocation of resources and so on, depending upon the kinds of social processes and incentives by which various sorts of scarce resources are allocated in the particular society under consideration.
[See also: factors of production]
