Consumer Behavior

Abstract

We can analyze basically two kinds of consumption decisions of consumers: a consumption decision (1) for a given time unit and (2) for the rest of the life of a consumer. The latter contains the choice for the length of education and the estimation of the income for the working and pension times, depending on the age of the consumer. This analysis contains various uncertain elements that make an exact lifelong consumption plan impossible. On the other hand, the prices of goods change with time, and people's needs change with aging. These elements make an exact lifelong consumption plan irrational. Thus, a rational person makes exact consumption plans only for a fixed time unit, such as one day, week, month, and so on. Concerning the empirical evaluation of a theory, the lifetime consumption plans of consumers cannot be measured as long as consumers are alive. If we thus want to construct a theory of consumer behavior that can be tested empirically, we have to choose the first of the two possibilities because from people's daily, weekly, monthly, etc, consumption we get observations. §: A consumer is a person that consumes goods in an economy. For example, an entrepreneur is a consumer when he/she buys goods for his/her personal consumption. ˘