Induced consumption is consumption expenditure by households on goods and services that varies with income. Such consumption is considered induced by income when expenditure on these consumables varies as income changes. Induced consumption contrasts with autonomous consumption, which is expenditures that do not vary with income.
For example, expenditure on a consumable that is considered a normal good would be considered to be induced.
Read more about Induced Consumption: Some Ways in Which Induced Consumption Occurs
Famous quotes containing the words induced and/or consumption:
“It is a misfortune that necessity has induced men to accord greater license to this formidable engine, in order to obtain liberty, than can be borne with less important objects in view; for the press, like fire, is an excellent servant, but a terrible master.”
—James Fenimore Cooper (1789–1851)
“The basis on which good repute in any highly organized industrial community ultimately rests is pecuniary strength; and the means of showing pecuniary strength, and so of gaining or retaining a good name, are leisure and a conspicuous consumption of goods.”
—Thorstein Veblen (1857–1929)