Autonomous consumption (also exogenous consumption) is a term used to describe consumption expenditure that occurs when income levels are zero. Such consumption is considered autonomous of income only when expenditure on these consumables does not vary with changes in income. If income levels are actually zero, this consumption counts as dissaving

Dissaving

Dissaving is negative saving. If spending is greater than income, dissaving is taking place. This spending is financed by already accumulated savings, such as money in a savings account, or it can be borrowed....

, because it is financed by borrowing or using up savings.

Autonomous consumption is, by definition, the opposite of induced consumption

Induced consumption

Induced consumption is a term used to describe consumption expenditure by households on goods and services which varies with income. Such consumption is considered induced by income when expenditure on these consumables varies as income changes....

.

Autonomous expenditures are those that do not systematically fluctuate with income, whereas induced expenditures change in relation to income. The two are related in the Consumption function

Consumption function

In economics, the consumption function is a single mathematical function used to express consumer spending. It was developed by John Maynard Keynes and detailed most famously in his book The General Theory of Employment, Interest, and Money. The function is used to calculate the amount of total...

:

AE = AEο +mpcY
where

• AE = Aggregate Expenditures,
• AEo = Autonomous Expenditures,
• mpc = Marginal Propensity to Consume, i.e. change in consumption/change in disposable income
  Disposable income
  Disposable income is total personal income minus personal current taxes. In national accounts definitions, personal income, minus personal current taxes equals disposable personal income...
  
  ,
• Y = Income.

See also

• Consumption (economics)
  Consumption (economics)
  Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt. Generally, consumption is defined in part by comparison to production. But the precise definition can vary because different schools of economists define production quite differently...
  
  
• Consumption function
  Consumption function
  In economics, the consumption function is a single mathematical function used to express consumer spending. It was developed by John Maynard Keynes and detailed most famously in his book The General Theory of Employment, Interest, and Money. The function is used to calculate the amount of total...
  
  
• Dissaving
  Dissaving
  Dissaving is negative saving. If spending is greater than income, dissaving is taking place. This spending is financed by already accumulated savings, such as money in a savings account, or it can be borrowed....