Autonomous Consumption – Definition & Explanation

Cite this article as:"Autonomous Consumption – Definition & Explanation," in The Business Professor, updated March 7, 2020, last accessed May 27, 2020, https://thebusinessprofessor.com/lesson/autonomous-consumption-definition/.

Back to: ECONOMICS, FINANCE, & ACCOUNTING

Autonomous Consumption Definition

Autonomous consumption refers to the lowest level of consumption that must occur even in the absence of disposable income for consumers.

A Little More on What is Autonomous Consumption

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.

Academics research on “Autonomous Consumption”

Autonomous consumption: Buying into the ideology of capitalism, Cunningham, A. (2003). Autonomous consumption: Buying into the ideology of capitalismJournal of Business Ethics48(3), 229-236. The purpose of this article is to examine three different approaches to autonomy in order to demonstrate how each leads to a different conclusion about the ethicality of advertising. I contend that Noggle’s (1995) belief-based autonomy theory provides the most complete understanding of autonomy. Read in conjunction with Arendt’s theory of cooperative power, Noggle’s theory leads to the conclusion that advertising does not violate consumers’ autonomy. Although it is possible for advertisers to abuse the power granted them by society these abuses do not constitute a violation of consumers’ autonomy.

Prototypes, reality and the growth rate of autonomous consumption expenditures: a rejoinder, Lavoie, M. (2017). Prototypes, reality and the growth rate of autonomous consumption expenditures: a rejoinder. Metroeconomica68(1), 194-199. I respond to Skott’ (2016) main comments on Lavoie (2016), which are: first, when calibrating with plausible parameter values, the stabilizing mechanism is unlikely to operate; second, in the analysis of the simple model, I have omitted the second stationary solution; third, he implies that the constraints that need to be imposed on my simple and complex models are in contradiction with each other. I argue that Skott confutes prototypes and reality; that the second stationary solution is of little interest; and that the constraints that need to be imposed on the simple and complex variants of the model are not in contradiction with each other.

Convergence Towards the Normal Rate of Capacity Utilization in Neo‐K aleckian Models: The Role of Non‐Capacity Creating Autonomous Expenditures, Lavoie, M. (2016). Convergence Towards the Normal Rate of Capacity Utilization in NeoK aleckian Models: The Role of NonCapacity Creating Autonomous Expenditures. Metroeconomica67(1), 172-201. Neo‐Kaleckian models of growth and distribution have been highly popular among heterodox economists. Two drawbacks of these models have, however, been underlined in the literature: first, the models do not usually converge to their normal rate of capacity utilization; second, the models do not include the Harrodian principle of dynamic instability. Some Sraffian economists have long been arguing that the presence of non‐capacity creating autonomous expenditures provides a mechanism that brings back the model to normal rates of capacity utilization, while safeguarding the main Keynesian message and without going back to classical conclusions. The present article provides a very simple proof of this, showing within a neo‐Kaleckian model that the Harrodian principle of dynamic instability gets tamed by the presence of autonomous consumer expenditures.

Autonomous demand and the Harrodian criticisms of the Kaleckian model, Skott, P. (2017). Autonomous demand and the Harrodian criticisms of the Kaleckian model. Metroeconomica68(1), 185-193. Lavoie (2016) introduces autonomous demand in a defense of the (post‐) Kaleckian analysis against classical and Harrodian criticisms. This note corrects some errors in Lavoie’s analysis, questions the stabilizing potential of autonomous demand, and points out some differences between the two variants of Lavoie’s ‘neo‐Kaleckian’ model.

Choosing sustainable consumption: a capability perspective on indicators, Comim, F., Tsutsumi, R., & Varea, A. (2007). Choosing sustainable consumption: a capability perspective on indicators. Journal of International Development: The Journal of the Development Studies Association19(4), 493-509. The concept of sustainable consumption (SC) has been proposed as a way of operationalising sustainable development (SD). However, until now, in view of the difficulties in conceptualising SC, emphasis has been placed mainly on a pragmatic approach. In an a‐conceptual and pragmatic account of SC, many problems remain unaddressed, such as the danger of the notion becoming empty and lack of integration between the different dimensions of sustainability. In this paper, we propose that the informational space provided by the capability approach (CA) offers a conceptual framework to elaborate SC. The CA is employed here (i) to discuss the philosophical underpinnings of SC as part of a strategy for enhancing quality‐of‐life and (ii) to investigate the links between the different dimensions of SC. Emphasis on autonomy, freedom, and public reasoning in the CA can help in contextualising and providing an organising frame for SC policies. Copyright © 2007 John Wiley & Sons, Ltd.

Was this article helpful?