Consumption (economics)

About: Consumption (economics) is a research topic. Over the lifetime, 52696 publications have been published within this topic receiving 1192960 citations.

Globalization and the Inequality of Nations

Abstract: The paper considers a model in which an imperfectly competitive manufacturing sector produces goods which are used both for final consumption and as intermediates. Intermediate usage creates cost and demand linkages between firms and a tendency for manufacturing agglomeration. How does globalization affect the location of manufacturing and the gains from trade? At high transport costs all countries have some manufacturing industry, but when transport costs fall below a critical value a core-periphery pattern forms spontaneously, and nations that find themselves in the periphery suffer a decline in real income. As transport costs continue to fall there comes a second stage of convergence in real incomes, in which the peripheral nations gain and the core nations may well lose.

An economic theory of clubs

Abstract: The implied institutional setting for neo-classical economic theory, including theoretical welfare economics, is a regime of private property, in which all goods and services are privately (individually) utilized or consumed. Only within the last two decades have serious attempts been made to extend the formal theoretical structure to include communal or collective ownership-consumption arrangements.2 The " pure theory of public goods" remains in its infancy, and the few models that have been most rigorously developed apply only to polar or extreme cases. For example, in the fundamental papers by Paul A. Samuelson, a sharp conceptual distinction is made between those goods and services that are " purely private " and those that are " purely public ". No general theory has been developed which covers the whole spectrum of ownership-consumption possibilities, ranging from the purely private or individualized activity on the one hand to purely public or collectivized activity on the other. One of the missing links here is " a theory of clubs ", a theory of co-operative membership, a theory that will include as a variable to be determined the extension of ownershipconsumption rights over differing numbers of persons. Everyday experience reveals that there exists some most preferred or " optimal" membership for almost any activity in which we engage, and that this membership varies in some relation to economic factors. European hotels have more communally shared bathrooms than their American counterparts. Middle and low income communities organize swimming-bathing facilities; high income communities are observed to enjoy privately owned swimming pools. In this paper I shall develop a general theory of clubs, or consumption ownership-membership arrangements. This construction allows us to move one step forward in closing the awesome Samuelson gap between the purely private and the purely public good. For the former, the optimal sharing arrangement, the preferred club membership, is clearly one person (or one family unit), whereas the optimal sharing group

Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles

Abstract: The well-known Easterlin paradox points out that average happiness has remained constant over time despite sharp rises in GNP per head. At the same time, a micro literature has typically found positive correlations between individual income and individual measures of subjective well-being. This paper suggests that these two findings are consistent with the presence of relative income terms in the utility function. Income may be evaluated relative to others (social comparison) or to oneself in the past (habituation). We review the evidence on relative income from the subjective well-being literature. We also discuss the relation (or not) between happiness and utility, and discuss some nonhappiness research (behavioral, experimental, neurological) related to income comparisons. We last consider how relative income in the utility function can affect economic models of behavior in the domains of consumption, investment, economic growth, savings, taxation, labor supply, wages, and migration.

Relative income, happiness, and utility : an explanation for the Easterlin paradox and other puzzles

Abstract: The well-known Easterlin paradox points out that average happiness has remained constant over time despite sharp rises in GNP per head. At the same time, a micro literature has typically found positive correlations between individual income and individual measures of subjective well-being. This paper suggests that these two findings are consistent with the presence of relative income terms in the utility function. Income may be evaluated relative to others (social comparison) or to oneself in the past (habituation). We review the evidence on relative income from the subjective well-being literature. We also discuss the relation (or not) between happiness and utility, and discuss some nonhappiness research (behavioral, experimental, neurological) related to income comparisons. We last consider how relative income in the utility function can affect economic models of behavior in the domains of consumption, investment, economic growth, savings, taxation, labor supply, wages, and migration.