Stable Income Consumer Behavior

By: John Lok

Impact on Spending Patterns

My analysis suggests that stable income leads to several distinct consumer behavior characteristics:

Increased Discretionary Spending: With a reliable income, consumers are more inclined to spend on non-essential goods and services, such as entertainment, dining out, and luxury items . This is because their basic needs are consistently met, freeing up funds for wants .Greater Investment in Durable Goods: Stable income enables consumers to plan for and afford significant purchases like homes, cars, and major appliances.

Reduced Precautionary Savings: While some level of saving is always prudent, consumers with stable incomes may feel less compelled to hoard cash for unforeseen circumstances. This allows for a greater portion of their income to be channeled into consumption or investment .

Predictable Demand for Businesses: From a macroeconomic perspective, a populace with stable income creates a more predictable and robust demand for goods and services. This stability benefits businesses, allowing for better planning, investment, and economic growth .

Higher Propensity to Consume: Economic theories, such as Keynes's consumption function, posit that as income rises, so does consumption, though not necessarily at the same rate . My emphasis on stable income highlights that the predictability of this income further strengthens the propensity to consume, as uncertainty, which often dampens consumption, is reduced .

• Format: Paperback
• Language: English
• ISBN: B09WYYQ3M7
• ISBN13: 9798886417623
• Release Date: March 2022
• Publisher: Notion Press Media Pvt. Ltd
• Length: 294 Pages
• Weight: 0.87 lbs.
• Dimensions: 0.7" x 6.0" x 9.0"