In
Keynesian economics,
consumption is the total personal consumption expenditure, or the purchase of currently produced
goods and services out of income, out of savings (net worth), or from borrowed funds. It refers to that part of disposable income (income after taxes paid and payments received) that does not go to
saving. Analyzing human consumption of available resources play an important role in economics,
environmentalism, and
geographical analysis. Consumption is generally measured by
household consumption expenditures (known as
personal consumption expenditures in the
United States) and is determined by the
consumption function, especially by the
marginal propensity to consume. It is part of
aggregate demand or
effective demand. It can also be defined as "the selection, adoption, use, disposal and recycling of goods and services", as opposed to their design, production and marketing.
Often, as in the permanent income hypothesis, the word "consumption" refers instead to the benefit received from consumer goods and services (as opposed to the amount spent on such products).
Studies of consumption investigate how and why society and individuals consume goods and services, and how this affects society and human relationships. Contemporary studies focus on meanings of goods, role of consumption in identity making, and the 'consumer' society (e.g. Douglas et al). Traditionally, consumption was seen as rather unimportant compared to production, and the political and economic issues surrounding it. With the development of a consumer society, increasing consumer power in the market place, the growth in marketing, advertising, sophisticated consumers, ethical consumption etc, it is recognised as central to modern life. Sociology of consumption has moved well beyond Veblen's early work on 'conspicuous' consumption. Current theories investigate the role of economic and cultural factors in constraining consumption (Bourdieu), as development of an approach that sees consumers as 'victims' of producers and their social situation. A counter theory highlights the subversive aspects of consumption, with consumers buying and using goods, places etc in ways unintended by the producers. Examples include city squares turned to skateboard parks, and music sharing on the internet.
Studies of consumption come from a variety of backgrounds. Consumer studies attempt to help marketing. User research aims to improve product design. Feminist studies highlight the importance of women as consumers, and particularly the role of the domestic arena in consumption. Media studies try to understand the consumption of media products such as television and video games. Cultural Studies is interested in the role of material goods in culture (e.g. Mackay) Critical Theory is an important influence on contemporary studies, as consumption is central to contemporary culture. Domestication theory focuses on mass market technologies.
