1 Answer | Add Yours
While this is not a hard and fast rule, the most important determinant of a household's consumption spending (in absolute terms) is their income. A household generally spends more as it makes more in income.
This is, of course, not always true. There are a number of variables that can intervene and throw this relationship off. For example, the number of people in a family and their ages will have a significant impact on the number of dollars that the family spends on consumption. So will (in a less easily measured way) the family's values -- are they thrifty or not.
But the general rule is more income = more consumption.
We’ve answered 319,816 questions. We can answer yours, too.Ask a question