In the theory of individual demand it is assumed that each individual has a well-defined indifference map, different perhaps from that of every other individual, but unchanged over the period of analysis. In practice, however, it is to be expected that in the case of some commodities at any rate the preferences of individual consumers will change, with the consequence that pure economic theory will not provide us with a complete set of determining variables in the practical case. Accordingly, some attempt must be made to take account of changes in preferences if there is any reason to suppose that these have been important over the period for which the analyses are to be made. The usual means of doing this is to introduce time as a variable. The justification for this procedure is that generally speaking tastes will change only slowly and therefore a slowly moving residual trend will absorb variations in the amount demanded by the market due to changes in taste. It must be recognized, however, that this is a very crude device which ought to be replaced by an investigation of changes in preferences over time. For example, in the case of tobacco consumption in the United Kingdom, the last two generations have seen a very large change in the proportion of women smokers, so that a considerable amount of the upward trend in tobacco consumption could be accounted for if information were available for each year of the actual numbers of men and women who were smokers. Again, in relation to the economic factors, there seems to have been a considerable rise in tobacco consumption between 1914 and 1918, which may perhaps be attributed to a change in habits induced by the war. If this hypothesis be accepted an attempt to measure its influence can be made by introducing a variable which takes the value of o before 1914 and 1 after 1918. In this way the periods before and after World War I are brought roughly on to the same basis of preference.

In addition to these general changes in tastes, it is clear that demand is affected by a number of other factors which are not explicitly recognized in pure theory. An example of this is advertising and the practice which has been important in some trades at certain times of attracting custom by giving away gifts with purchases.