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Lower, Milton D.
1980.
Institutional Economics.
p.
82.
Article contents
Optimum Consumption Patterns in High-Income Nations*
Published online by Cambridge University Press: 07 November 2014
Extract
A transformation in the pattern of consumer expenditures has occurred in the nations that have reached high income levels during the past century. Smaller fractions of national income are spent on food, clothing, and shelter; larger fractions on recreation, medical care, education, and luxury goods. Cross-sectional studies of family budgets have been fairly reliable indicators of this trend. As early as 1857 Ernst Engel had pronounced his famous law about food expenditures on the basis of Edouard Ducpetiaux's Belgian budget studies. Similar assertions by others about clothing, fuel, and shelter followed; and in 1919 William Ogburn published his statistics of Washington, D.C., family budgets, indicating, in effect, that income elasticities of demand were highest for amusement and education. As the pattern slowly emerged, economists were not much disturbed. Why should consumers not be left alone in choosing between carrots and bedrooms? Interference with choices among luxury goods and services seemed even less warranted. Advertising posed no problem beyond encouragement of elementary veracity.
In the past decade, however, this unconcern has faded. Several economists have joined sociologists, moralists, and general philosophers in questioning trends in consumer expenditures. Their concern is less with morals and social repercussions than with optimum consumption patterns in terms of economic value and resource allocation. Advertising in particular is no longer reproached merely for a bent towards mendacity. It is seen as more insidious, as manipulating consumers' choices by kindling subconscious anxieties. It puts consumers in a squirrel cage in which production and the want-satisfying process create wants that would otherwise not exist.
- Type
- Articles
- Information
- Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 28 , Issue 3 , August 1962 , pp. 364 - 372
- Copyright
- Copyright © Canadian Political Science Association 1962
Footnotes
*
Helpful comments by Professors Thomas Mayer, Max G. Mueller, and Boris Pesek of Michigan State University, by Professor Frank C. Child of Stanford University, and by Dr. A. G. Frank are gratefully acknowledged.
References
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23 Of course, subsidies are already provided by musicians and actors who “play” for less than they could earn in alternative occupations. Indeed, their willingness to sacrifice paychecks for “psychic income” to an extent not found in occupations corresponding to other hobbies (farming, cooking, transportation, etc.) may be due to the large awareness-yielding external economies of the arts rather than their status-conferring capacity.
24 Critique of Welfare Economics, 64.
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