Consumerism - Explained
What is Consumerism?
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What is Consumerism?
Consumerism is an economic theory that maintains that an ever-increasing purchase of goods and services in an economy is an indicator that such a country would be desirable economically. Consumerism is also a theory that places great value on the continuous consumption of goods and services. This theory encourages the excessive purchase or consumption of goods and services.
Back to: ECONOMIC ANALYSIS & MONETARY POLICY
What are tenants of Consumerism?
Oftentimes, consumerism is regarded as a theory that promotes greed rather than the desirability of an economy. Given that consumerism encourages the continuous and excessive consumption of goods and services by individuals, there is a tendency that an individual's wants and needs for goods and services will grow to a limit without an end.
Hence, over-consumption is seen as a downside of consumerism. Consumerism is also regarded as efforts by individuals or groups towards consumer protection policies that prevent the infringement of consumer rights and promote safety standards and fair business practices enjoyed by consumers.
History of Consumerism
Consumerism as an economic theory originated from the consumer society which emerged in the 17th century. This theory is an ideology based on luxurious and excessive consumption of certain goods and services by people.
Individuals do not necessarily purchase these goods and services to meet their needs, rather, they were purchased for luxury. According to this theory, an ever-growing consumption of goods and services us an indication that an economy will be better off in the nearest future.
The history of consumerism is incomplete without referencing the industrial revolution which led to accessibility to consumer goods by individuals. The advent of technology, where tools that enhance advertising were developed also contributed to the emergence of consumerism.
- Total utility
- Marginal Utility
- Diminishing Marginal Utility
- Marginal Utility per Dollar
- Rule of Maximizing Utility
- Consumer Goods
- Changes in Income Affect Consumer Choices
- Changes in Price Affect Consumer Choices
- Substitution Effect
- Income Effect
- Budget Constraints Create Demand Curves
- Lifecycle Model of Consumption
- Autonomous Consumption
- Permanent Income Hypothesis
- Lipstick Effect
- Engel's Law
- Paradox of Thrift
- Behavioral Economics