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<title>Consumption function</title>

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<span id="openzim-page-title" class="mw-page-title-main"><span class="mw-page-title-main">Consumption function</span></span>

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</style><div role="note" class="hatnote navigation-not-searchable">Not to be confused with <a href="Demand_function" class="mw-redirect" title="Demand function">demand function</a>.</div>

<p>In <a href="Economics" title="Economics">economics</a>, the <b>consumption function</b> describes a relationship between <a href="Consumption_(economics)" title="Consumption (economics)">consumption</a> and <a href="Disposable_and_discretionary_income" class="mw-redirect" title="Disposable and discretionary income">disposable income</a>.<sup id="cite_ref-1" class="reference"><a href="#cite_note-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-2" class="reference"><a href="#cite_note-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> The concept is believed to have been introduced into <a href="Macroeconomics" title="Macroeconomics">macroeconomics</a> by <a href="John_Maynard_Keynes" title="John Maynard Keynes">John Maynard Keynes</a> in 1936, who used it to develop the notion of a <a href="Fiscal_multiplier" title="Fiscal multiplier">government spending multiplier</a>.<sup id="cite_ref-3" class="reference"><a href="#cite_note-3"><span class="cite-bracket">[</span>3<span class="cite-bracket">]</span></a></sup>

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<div class="mw-heading mw-heading2"><h2 id="Details">Details</h2></div>

<p>Its simplest form is the <i>linear consumption function</i> used frequently in simple <a href="Keynesian_economics" title="Keynesian economics">Keynesian models</a>:<sup id="cite_ref-4" class="reference"><a href="#cite_note-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup>

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<annotation encoding="application/x-tex">{\displaystyle C=a+b\cdot Y_{d}}</annotation>

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</math></span><img src="./200f18c5ac870d1bd0aaa0648f61636a42b8d181.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.671ex; width:14.054ex; height:2.509ex;" alt="{\displaystyle C=a+b\cdot Y_{d}}" loading="lazy"></span></dd></dl>

<p>where <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle a}">

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<annotation encoding="application/x-tex">{\displaystyle a}</annotation>

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</math></span><img src="./ffd2487510aa438433a2579450ab2b3d557e5edc.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.338ex; width:1.23ex; height:1.676ex;" alt="{\displaystyle a}" loading="lazy"></span> is the <a href="Autonomous_consumption" title="Autonomous consumption">autonomous consumption</a> that is independent of disposable income; in other words, consumption when disposable income is zero. The term <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle b\cdot Y_{d}}">

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<annotation encoding="application/x-tex">{\displaystyle b\cdot Y_{d}}</annotation>

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</math></span><img src="./6f58806c5079220411f116e823bddc6e27abe5cb.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.671ex; width:5.119ex; height:2.509ex;" alt="{\displaystyle b\cdot Y_{d}}" loading="lazy"></span> is the <a href="Induced_consumption" title="Induced consumption">induced consumption</a> that is influenced by the economy's income level <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle Y_{d}}">

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<annotation encoding="application/x-tex">{\displaystyle Y_{d}}</annotation>

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</math></span><img src="./50d7700bea96b0b3fb4f8f95af4883ffc129cfdc.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.671ex; width:2.443ex; height:2.509ex;" alt="{\displaystyle Y_{d}}" loading="lazy"></span>. The parameter <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle b}">

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<annotation encoding="application/x-tex">{\displaystyle b}</annotation>

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</math></span><img src="./f11423fbb2e967f986e36804a8ae4271734917c3.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.338ex; width:0.998ex; height:2.176ex;" alt="{\displaystyle b}" loading="lazy"></span> is known as the <a href="Marginal_propensity_to_consume" title="Marginal propensity to consume">marginal propensity to consume</a>, i.e. the increase in consumption due to an incremental increase in disposable income, since <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle \partial C/\partial Y_{d}=b}">

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<annotation encoding="application/x-tex">{\displaystyle \partial C/\partial Y_{d}=b}</annotation>

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</math></span><img src="./3c9ee7a67892c8277f31bacbd7d5bff4c1510312.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.838ex; width:12.104ex; height:2.843ex;" alt="{\displaystyle \partial C/\partial Y_{d}=b}" loading="lazy"></span>. Geometrically, <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle b}">

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<annotation encoding="application/x-tex">{\displaystyle b}</annotation>

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</p><p>Keynes proposed this model to fit three <a href="Stylized_fact" title="Stylized fact">stylized facts</a>:<sup id="cite_ref-5" class="reference"><a href="#cite_note-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup>

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<ul><li>People typically spend a part, but not all of their income on consumption, and they save the rest. They typically do not borrow money to spend, or borrow money to save.<sup id="cite_ref-:0_6-0" class="reference"><a href="#cite_note-:0-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> This fact is modelled by requiring <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle b\in (0,1)}">

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<annotation encoding="application/x-tex">{\displaystyle b\in (0,1)}</annotation>

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</math></span><img src="./c10ac1dc1d3f0f85d9fe49298d13f4ab76b2f505.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.838ex; width:9.006ex; height:2.843ex;" alt="{\displaystyle b\in (0,1)}" loading="lazy"></span>.</li>

<li>People with higher income save a higher proportion of the income. This is modelled by <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle {\frac {C}{Y_{d}}}}">

<mfrac>

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<annotation encoding="application/x-tex">{\displaystyle {\frac {C}{Y_{d}}}}</annotation>

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</math></span><img src="./d82a8a3015da88dca69b06a3c16ecc16080e0361.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -2.338ex; width:3.279ex; height:5.843ex;" alt="{\displaystyle {\frac {C}{Y_{d}}}}" loading="lazy"></span> decreasing with <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle Y_{d}}">

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<annotation encoding="application/x-tex">{\displaystyle Y_{d}}</annotation>

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<li>People, when deciding how much to save, are insensitive to the interest rate.<sup id="cite_ref-:0_6-1" class="reference"><a href="#cite_note-:0-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup></li></ul>

<p>By basing his model in how typical households decide how much to save and spend, Keynes was informally using a <a href="Microfoundations" title="Microfoundations">microfoundation</a> approach to the macroeconomics of saving.<sup id="cite_ref-7" class="reference"><a href="#cite_note-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup>

</p><p>Keynes also took note of the tendency for the marginal propensity to consume to decrease as income increases, i.e. <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle \partial ^{2}C/\partial Y_{d}^{2}<0}">

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<annotation encoding="application/x-tex">{\displaystyle \partial ^{2}C/\partial Y_{d}^{2}<0}</annotation>

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</math></span><img src="./e373d250b68c3a7c18701268c4913d108e312cae.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -1.005ex; width:13.86ex; height:3.343ex;" alt="{\displaystyle \partial ^{2}C/\partial Y_{d}^{2}<0}" loading="lazy"></span>.<sup id="cite_ref-8" class="reference"><a href="#cite_note-8"><span class="cite-bracket">[</span>8<span class="cite-bracket">]</span></a></sup> If this assumption is to be used, it would result in a nonlinear consumption function with a diminishing slope. Further theories on the shape of the consumption function include <a href="James_Duesenberry" title="James Duesenberry">James Duesenberry</a>'s (1949) relative consumption expenditure,<sup id="cite_ref-9" class="reference"><a href="#cite_note-9"><span class="cite-bracket">[</span>9<span class="cite-bracket">]</span></a></sup> <a href="Franco_Modigliani" title="Franco Modigliani">Franco Modigliani</a> and Richard Brumberg's (1954) <a href="Life-cycle_hypothesis" title="Life-cycle hypothesis">life-cycle hypothesis</a>, and <a href="Milton_Friedman" title="Milton Friedman">Milton Friedman</a>'s (1957) <a href="Permanent_income_hypothesis" title="Permanent income hypothesis">permanent income hypothesis</a>.<sup id="cite_ref-10" class="reference"><a href="#cite_note-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup>

</p><p>Some new theoretical works following Duesenberry's and based in behavioral economics suggest that a number of behavioural principles can be taken as microeconomic foundations for a behaviorally-based aggregate consumption function.<sup id="cite_ref-11" class="reference"><a href="#cite_note-11"><span class="cite-bracket">[</span>11<span class="cite-bracket">]</span></a></sup>

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<ul><li><a href="Aggregate_demand" title="Aggregate demand">Aggregate demand</a></li>

<li><a href="Absolute_income_hypothesis" title="Absolute income hypothesis">Absolute income hypothesis</a></li>

<li><a href="Life_cycle_hypothesis" class="mw-redirect" title="Life cycle hypothesis">Life cycle hypothesis</a></li>

<li><a href="Measures_of_national_income_and_output" title="Measures of national income and output">Measures of national income and output</a></li>

<li><a href="Permanent_income_hypothesis" title="Permanent income hypothesis">Permanent income hypothesis</a></li></ul>

<div class="mw-heading mw-heading2"><h2 id="Notes">Notes</h2></div>

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<li id="cite_note-1"><span class="mw-cite-backlink"><b><a href="#cite_ref-1">^</a></b></span> <span class="reference-text">Algebraically, this means <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle C=f(Y_{d})}">

<msub>

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<annotation encoding="application/x-tex">{\displaystyle C=f(Y_{d})}</annotation>

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</math></span><img src="./9756371fa4b4b5abaaaa4b98ec9a92c8c49fc6f2.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.838ex; width:10.395ex; height:2.843ex;" alt="{\displaystyle C=f(Y_{d})}" loading="lazy"></span> where <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle f\colon \mathbb {R} ^{+}\to \mathbb {R} ^{+}}">

<msup>

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<annotation encoding="application/x-tex">{\displaystyle f\colon \mathbb {R} ^{+}\to \mathbb {R} ^{+}}</annotation>

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</math></span><img src="./2c9e2b8d8348352d0ac7ed9684113773271ecbba.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.671ex; width:12.304ex; height:2.843ex;" alt="{\displaystyle f\colon \mathbb {R} ^{+}\to \mathbb {R} ^{+}}" loading="lazy"></span> is a <a href="Function_(mathematics)" title="Function (mathematics)">function</a> that <a href="Map_(mathematics)" title="Map (mathematics)">maps</a> levels of disposable income <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle Y_{d}}">

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<annotation encoding="application/x-tex">{\displaystyle Y_{d}}</annotation>

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</math></span><img src="./50d7700bea96b0b3fb4f8f95af4883ffc129cfdc.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.671ex; width:2.443ex; height:2.509ex;" alt="{\displaystyle Y_{d}}" loading="lazy"></span>—income after government intervention, such as taxes or transfer payments—into levels of consumption <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle C}">

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<annotation encoding="application/x-tex">{\displaystyle C}</annotation>

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</math></span><img src="./4fc55753007cd3c18576f7933f6f089196732029.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.338ex; width:1.766ex; height:2.176ex;" alt="{\displaystyle C}" loading="lazy"></span>.</span>

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</style><cite id="CITEREFLindauer1976" class="citation book cs1"><a href="John_Lindauer" class="mw-redirect" title="John Lindauer">Lindauer, John</a> (1976). <i>Macroeconomics</i> (Third ed.). New York: John Wiley & Sons. pp. <span class="nowrap">40–</span>43. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>0-471-53572-9</bdi>.</cite></span>

</li>

<li id="cite_note-3"><span class="mw-cite-backlink"><b><a href="#cite_ref-3">^</a></b></span> <span class="reference-text"><cite id="CITEREFHallTaylor1986" class="citation book cs1"><a href="Robert_Hall_(economist)" title="Robert Hall (economist)">Hall, Robert E.</a>; <a href="John_B._Taylor" title="John B. Taylor">Taylor, John B.</a> (1986). "Consumption and Income". <i>Macroeconomics: Theory, Performance, and Policy</i>. New York: W. W. Norton. pp. <span class="nowrap">63–</span>67. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>0-393-95398-X</bdi>.</cite></span>

</li>

<li id="cite_note-4"><span class="mw-cite-backlink"><b><a href="#cite_ref-4">^</a></b></span> <span class="reference-text"><cite id="CITEREFColander1986" class="citation book cs1"><a href="David_Colander" title="David Colander">Colander, David</a> (1986). <span class="id-lock-registration" title="Free registration required"><a rel="nofollow" class="external text" href="https://archive.org/details/macroeconomicsth0000cola"><i>Macroeconomics: Theory and Policy</i></a></span>. Glenview: Scott, Foresman and Co. pp. <a rel="nofollow" class="external text" href="https://archive.org/details/macroeconomicsth0000cola/page/94">94</a>–97. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>0-673-16648-1</bdi>.</cite></span>

</li>

<li id="cite_note-5"><span class="mw-cite-backlink"><b><a href="#cite_ref-5">^</a></b></span> <span class="reference-text"><cite id="CITEREFMankiw2022" class="citation book cs1">Mankiw, N. Gregory (2022). <i>Macroeconomics</i> (11 ed.). New York. 20-1 What Determines Consumer Spending?. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>978-1-319-26390-4</bdi>. <a href="OCLC_(identifier)" class="mw-redirect" title="OCLC (identifier)">OCLC</a> <a rel="nofollow" class="external text" href="https://search.worldcat.org/oclc/1289514240">1289514240</a>.</cite><span class="cs1-maint citation-comment"><code class="cs1-code">{{cite book}}</code>: CS1 maint: location missing publisher (link)</span></span>

</li>

<li id="cite_note-:0-6"><span class="mw-cite-backlink">^ <a href="#cite_ref-:0_6-0"><sup><i><b>a</b></i></sup></a> <a href="#cite_ref-:0_6-1"><sup><i><b>b</b></i></sup></a></span> <span class="reference-text"><cite id="CITEREFKeynes1936" class="citation book cs1">Keynes, John M. (1936). <i><a href="The_General_Theory_of_Employment%2C_Interest_and_Money" title="The General Theory of Employment, Interest and Money">The General Theory of Employment, Interest and Money</a></i>. New York: Harcourt Brace Jovanovich. Section 3.8.2. <q>There are not many people who will alter their way of living because the rate of interest has fallen from 5 to 4 per cent, if their aggregate income is the same as before... the short-period influence of the rate of interest on individual spending out of a given income is secondary and relatively unimportant, except, perhaps, where unusually large changes are in question.</q></cite></span>

</li>

<li id="cite_note-7"><span class="mw-cite-backlink"><b><a href="#cite_ref-7">^</a></b></span> <span class="reference-text"><cite id="CITEREFSolow2004" class="citation journal cs1">Solow, Robert M. (2004). <span class="id-lock-subscription" title="Paid subscription required"><a rel="nofollow" class="external text" href="https://dx.doi.org/10.1353/mcb.2004.0067">"Introduction: The Tobin Approach to Monetary Economics"</a></span>. <i>Journal of Money, Credit, and Banking</i>. <b>36</b> (4): <span class="nowrap">657–</span>663. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.1353%2Fmcb.2004.0067">10.1353/mcb.2004.0067</a>. <a href="ISSN_(identifier)" class="mw-redirect" title="ISSN (identifier)">ISSN</a> <a rel="nofollow" class="external text" href="https://search.worldcat.org/issn/1538-4616">1538-4616</a>. <a href="S2CID_(identifier)" class="mw-redirect" title="S2CID (identifier)">S2CID</a> <a rel="nofollow" class="external text" href="https://api.semanticscholar.org/CorpusID:154008365">154008365</a>. <q>... recall Keynes's argument that the marginal propensity to consume should be between zero and one, or his discussion about whether the marginal efficiency of investment should be sensitive to current output or should depend primarily on "the state of long-term expectations." Those are microfoundations.</q></cite></span>

</li>

<li id="cite_note-8"><span class="mw-cite-backlink"><b><a href="#cite_ref-8">^</a></b></span> <span class="reference-text"><cite id="CITEREFKeynes1936" class="citation book cs1">Keynes, John M. (1936). <i><a href="The_General_Theory_of_Employment%2C_Interest_and_Money" title="The General Theory of Employment, Interest and Money">The General Theory of Employment, Interest and Money</a></i>. New York: Harcourt Brace Jovanovich. <q>The marginal propensity to consume is not constant for all levels of employment, and it is probable that there will be, as a rule, a tendency for it to diminish as employment increases; when real income increases, that is to say, the community will wish to consume a gradually diminishing proportion of it.</q></cite></span>

</li>

<li id="cite_note-9"><span class="mw-cite-backlink"><b><a href="#cite_ref-9">^</a></b></span> <span class="reference-text"><cite id="CITEREFDuesenberry1949" class="citation book cs1">Duesenberry, J. S. (1949). <a rel="nofollow" class="external text" href="https://archive.org/details/in.ernet.dli.2015.84155"><i>Income, Saving and the Theory of Consumer Behavior</i></a>.</cite></span>

</li>

<li id="cite_note-10"><span class="mw-cite-backlink"><b><a href="#cite_ref-10">^</a></b></span> <span class="reference-text"><cite id="CITEREFFriedman1957" class="citation book cs1">Friedman, M. (1957). <i>A Theory of the Consumption Function</i>.</cite></span>

</li>

<li id="cite_note-11"><span class="mw-cite-backlink"><b><a href="#cite_ref-11">^</a></b></span> <span class="reference-text"><cite id="CITEREFd’OrlandoSanfilippo2010" class="citation journal cs1">d’Orlando, F.; Sanfilippo, E. (2010). <a rel="nofollow" class="external text" href="http://dipeg-wpe.unicas.it/dipse/files/wp200805.pdf">"Behavioral foundations for the Keynesian consumption function"</a> <span class="cs1-format">(PDF)</span>. <i>Journal of Economic Psychology</i>. <b>31</b> (6): 1035. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.1016%2Fj.joep.2010.09.004">10.1016/j.joep.2010.09.004</a>.</cite></span>

</li>

</ol></div></div>

<div class="mw-heading mw-heading2"><h2 id="Further_reading">Further reading</h2></div>

<ul><li><cite id="CITEREFPoindexter1976" class="citation book cs1">Poindexter, J. Carl (1976). <a rel="nofollow" class="external text" href="https://books.google.com/books?id=TLS7AAAAIAAJ&pg=PA113">"The Consumption Function"</a>. <i>Macroeconomics</i>. Hinsdale: Dryden Press. pp. <span class="nowrap">113–</span>141. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>0-03-089419-0</bdi>.</cite> <i>(Undergraduate level discussion of the subject.)</i></li>

<li><cite id="CITEREFSargent1979" class="citation book cs1"><a href="Thomas_J._Sargent" title="Thomas J. Sargent">Sargent, Thomas J.</a> (1979). <a rel="nofollow" class="external text" href="https://books.google.com/books?id=X6u7AAAAIAAJ&pg=PA298">"The Consumption Function"</a>. <i>Macroeconomic Theory</i>. New York: Academic Press. pp. <span class="nowrap">298–</span>323. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>0-12-619750-4</bdi>.</cite> <i>(Graduate level discussion of the subject.)</i></li></ul>

<div class="mw-heading mw-heading2"><h2 id="External_links">External links</h2></div>

<ul><li><a rel="nofollow" class="external text" href="http://www.economic-truth.co.uk/content-essays/bsc/keynesconsumption.pdf">An essay examining the strengths and weaknesses of Keynes's theory of consumption</a></li></ul>

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</style><div id="Consumption58" style="font-size:114%;margin:0 4em"><a href="Consumption_(economics)" title="Consumption (economics)">Consumption</a></div></th></tr><tr><th scope="row" class="navbox-group" style="width:1%">Topics</th><td class="navbox-list-with-group navbox-list navbox-odd hlist" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul>

<li><a href="Final_consumption_expenditure" title="Final consumption expenditure">Final consumption expenditure</a></li>

<li><a href="Deferred_gratification" class="mw-redirect" title="Deferred gratification">Instant gratification</a></li>

<li><a href="Intertemporal_consumption" title="Intertemporal consumption">Intertemporal consumption</a></li>

<li><a href="Random_walk_hypothesis" title="Random walk hypothesis">Random walk hypothesis</a></li>

<li><a href="Autonomous_consumption" title="Autonomous consumption">Autonomous consumption</a></li>

<li><a href="Induced_consumption" title="Induced consumption">Induced consumption</a></li>

<li><a href="Conspicuous_consumption" title="Conspicuous consumption">Conspicuous consumption</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Theories</th><td class="navbox-list-with-group navbox-list navbox-even hlist" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Absolute_income_hypothesis" title="Absolute income hypothesis">Absolute income hypothesis</a></li>

<li><a href="Life-cycle_hypothesis" title="Life-cycle hypothesis">Life-cycle hypothesis</a></li>

<li><a href="Permanent_income_hypothesis" title="Permanent income hypothesis">Permanent income hypothesis</a></li>

<li><a href="Random_walk_model_of_consumption" title="Random walk model of consumption">Random walk model of consumption</a></li>

<li><a href="Relative_income_hypothesis" title="Relative income hypothesis">Relative income hypothesis</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Lists</th><td class="navbox-list-with-group navbox-list navbox-odd hlist" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="List_of_largest_consumer_markets" title="List of largest consumer markets">List of largest consumer markets</a></li></ul>

</div></td></tr></tbody></table></div>

<div class="navbox-styles"></div><div role="navigation" class="navbox" aria-labelledby="Consumer_behaviour72" style="padding:3px"><table class="nowraplinks mw-collapsible autocollapse navbox-inner" style="border-spacing:0;background:transparent;color:inherit"><tbody><tr><th scope="col" class="navbox-title" colspan="2"><div id="Consumer_behaviour72" style="font-size:114%;margin:0 4em"><a href="Consumer_behaviour" title="Consumer behaviour">Consumer behaviour</a></div></th></tr><tr><th scope="row" class="navbox-group" style="width:1%">Concepts</th><td class="navbox-list-with-group navbox-list navbox-odd hlist" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Consumption_(economics)" title="Consumption (economics)">Consumption</a></li>

<li><a href="Autonomous_consumption" title="Autonomous consumption">Autonomous consumption</a></li>

<li><a href="Induced_consumption" title="Induced consumption">Induced consumption</a></li>

<li><a href="Consumer_culture_theory" title="Consumer culture theory">Consumer culture theory</a></li>

<li><a href="Consumer_debt" title="Consumer debt">Consumer debt</a></li>

<li><a href="Consumer_economy" title="Consumer economy">Consumer economy</a></li>

<li><a href="Consumer_spending" title="Consumer spending">Consumer spending</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Research types</th><td class="navbox-list-with-group navbox-list navbox-even hlist" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Consumer_choice" title="Consumer choice">Consumer choice</a></li>

<li><a href="Consumer_economics" class="mw-redirect" title="Consumer economics">Consumer economics</a></li>

<li><a href="Consumer_neuroscience" title="Consumer neuroscience">Consumer neuroscience</a></li>

<li><a href="Final_good" title="Final good">Consumer product</a></li>

<li><a href="Marketing_research" title="Marketing research">Marketing research</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Consumer attributes</th><td class="navbox-list-with-group navbox-list navbox-odd hlist" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Consumer_confidence" title="Consumer confidence">Consumer confidence</a></li>

<li><a href="Consumer_confusion" title="Consumer confusion">Consumer confusion</a></li>

<li><a href="Consumer_ethnocentrism" title="Consumer ethnocentrism">Consumer ethnocentrism</a></li>

<li><a href="Consumer_socialization" title="Consumer socialization">Consumer socialization</a></li>

<li><a href="Consumer's_risk" title="Consumer's risk">Consumer's risk</a></li>

<li><a href="Cultural_consumer" title="Cultural consumer">Cultural consumer</a></li>

<li><i><a href="Homo_economicus" title="Homo economicus">Homo economicus</a></i></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Processes</th><td class="navbox-list-with-group navbox-list navbox-even hlist" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Consumers'_co-operative" class="mw-redirect" title="Consumers' co-operative">Consumers' co-operative</a></li>

<li><a href="Consumer-to-business" title="Consumer-to-business">Consumer-to-business</a></li>

<li><a href="Factory-to-consumer" title="Factory-to-consumer">Factory-to-consumer</a></li>

<li><a href="Consumer_service" title="Consumer service">Consumer service</a></li>

<li><a href="Consumerization_of_information_technology" title="Consumerization of information technology">Consumerization</a></li></ul>

</div></td></tr></tbody></table></div>

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