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.

For example, expenditure on a consumable that is considered a normal good
Normal good
In economics, normal goods are any goods for which demand increases when income increases and falls when income decreases but price remains constant, i.e. with a positive income elasticity of demand...

would be considered to be induced.

Induced consumption is, by definition, the opposite of autonomous consumption
Autonomous consumption
Autonomous 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...


Some Ways in Which Induced Consumption Occurs

  • Conspicuous consumption

When people consume things to display a higher status than others.
  • Artificial consumption

When people consume things because they were introduced to them through various forms of media.

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...

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