Autonomous consumption

Autonomous consumption (also exogenous consumption) is the consumption expenditure that occurs when income levels are zero. Such consumption is considered autonomous of income only when expenditure on these

savings. Autonomous consumption contrasts with induced consumption, in that it does not systematically fluctuate with income, whereas induced consumption does.^[1] The two are related, for all households, through the consumption function

:

C=c_{0}+c_{1}Y_{d}

where

C = total consumption,

c₀ = autonomous consumption (c₀ > 0),

c₁ = the marginal propensity to consume (the gradient of induced consumption) (0 < c₁ < 1), and
Y_d = disposable income (income after government taxes, benefits, and transfer payments).

References

ISBN 0-07-255119-4
.

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Consumer behaviour
Concepts

Consumption

Autonomous consumption

Induced consumption

Consumer culture theory

Consumer debt

Consumer economy

Consumer spending

Research types

Consumer choice

Consumer economics

Consumer neuroscience

Consumer product

Marketing research

Consumer attributes

Consumer confidence

Consumer confusion

Consumer ethnocentrism

Consumer socialization

Consumer's risk

Consumption function

Cultural consumer

Homo economicus

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Consumer service

Consumerization

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[1] ISBN 0-07-255119-4
.

[1]

See also

References