Autonomous Consumption - Explained
What is Autonomous Consumption?
If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
Table of ContentsWhat is Autonomous Consumption?Why is Autonomous Consumption Important?Even more of an Explanation of Autonomous ConsumptionAcademics Research on Autonomous Consumption
What is Autonomous Consumption?
Autonomous consumption refers to the lowest level of consumption that must occur even in the absence of disposable income for consumers.
Back to: ECONOMIC ANALYSIS & MONETARY POLICY
Why is Autonomous Consumption Important?
Autonomous consumption is understood as consumption that happens even when one's income level is zero. As such, autonomous expenditures are only for basic necessities. Discretionary consumption is the opposite of autonomous consumption where a consumer is at will to choose to buy important items or not.
Even more of an Explanation of Autonomous Consumption
There are some expenses or consumptions that are considered autonomous because they are basic necessities of life, and a consumer must have them.
- For instance, food items, house rents, electricity and water bills, and clothing are autonomous consumptions that are not dependent on the income of the consumer.
Autonomous consumptions may be smaller in size or scope as a result of the lack of available resources, but they must still be purchased.
- For instance, an individual can move to a smaller apartment, change eating patterns, limit the use of electricity and other utilities to reduce the cost of autonomous consumption.
Autonomous consumptions are generally financed through savings or debt, known as "dissaving" or "negative saving". While dissaving is commonly associated with the presence of financial distress or hardship, there are some exceptions.
- For instance, an individual can voluntarily use his net assets to fund autonomous expenses.
Autonomous spending is a key component of government expenditure, such as the provision of social amenities, health infrastructure, community facilities, developmental programs, and others. Discretionary spending is another type of government expenditure which includes the purchase of non-essential items, such as programs and projects that are not considered essential to a particular community.
Other Related Topics
- Fiscal Policy
- Expansionary vs Contractionary Fiscal Policy
- Stabilization Policy
- Robin Hood Effect
- Ricardo Barro Effect
- Autonomous Spending
- Autonomous Consumption
- Golden Rule
- Ricardian Equivalence
- Balanced Budget - Deficit and Surplus
- National Debt
- Standardized Employment Budget
- Deficit Hawk
- Twin Deficits