Can't install postgresql gem on mac - ruby-on-rails

Question

I'll be deploying my app on Heroku but wish to develop locally on SQLite. This is the code that I added to my Gemfile.
group :development, :test do
gem 'sqlite3'
end
group :production do
gem 'postgresql'
end
When I do bundle install, this is the error that I get.
Gem::Ext::BuildError: ERROR: Failed to build gem native extension.
/Users/Fulcrum/.rbenv/versions/2.1.0/bin/ruby extconf.rb
checking for pg_config... no
No pg_config... trying anyway. If building fails, please try again with
--with-pg-config=/path/to/pg_config
checking for libpq-fe.h... no
Can't find the 'libpq-fe.h header
*** extconf.rb failed ***
Could not create Makefile due to some reason, probably lack of necessary
libraries and/or headers. Check the mkmf.log file for more details. You may
need configuration options.
Provided configuration options:
--with-opt-dir
--without-opt-dir
--with-opt-include
--without-opt-include=${opt-dir}/include
--with-opt-lib
--without-opt-lib=${opt-dir}/lib
--with-make-prog
--without-make-prog
--srcdir=.
--curdir
--ruby=/Users/Fulcrum/.rbenv/versions/2.1.0/bin/ruby
--with-pg
--without-pg
--with-pg-config
--without-pg-config
--with-pg_config
--without-pg_config
--with-pg-dir
--without-pg-dir
--with-pg-include
--without-pg-include=${pg-dir}/include
--with-pg-lib
--without-pg-lib=${pg-dir}/lib
extconf failed, exit code 1
Gem files will remain installed in /Users/Fulcrum/.rbenv/versions/2.1.0/lib/ruby/gems/2.1.0/gems/pg-0.17.1 for inspection.
Results logged to /Users/Fulcrum/.rbenv/versions/2.1.0/lib/ruby/gems/2.1.0/extensions/x86_64-darwin-13/2.1.0-static/pg-0.17.1/gem_make.out
An error occurred while installing pg (0.17.1), and Bundler cannot continue.
Make sure that `gem install pg -v '0.17.1'` succeeds before bundling.

Answer 1

Try bundle install without production:
bundle install --without production

Answer 2

Install the libpq-dev which is missing.
brew install libpq-dev
and then do bundle install, this should solve your problem.