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Consumer Expenditure

This article explores the various factors affecting household consumer expenditure on products. Key influences include income levels, with wealthier families able to afford more luxury goods, which in turn drives higher spending. Pricing also plays a crucial role, as lower prices increase demand while higher prices tend to deter consumers. Other factors include changes in consumer tastes, the necessity of goods, consumer confidence, and age demographics, all of which shape how much households are willing to spend over time.

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Consumer Expenditure

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  1. Consumer Expenditure Spending by households on consumers products

  2. Factors Income per household (Wealth): Richer families can afford more luxury goods so there will be more expenditure Price of products: Lower prices increase demand while higher prices are likely to decrease Change in income/change in price: Demand varies on price. Demand: The quantity of a product that consumers are able and willing to purchase at various prices over a period of time

  3. Fashion/taste/seasons: Products become more popular at different times, this increases the demand of these products meaning more money is spent. Necessities: These goods are inelastic so spending will stay the same, however inferior goods will be preferred over luxury goods if the price of luxury goods increases and vice versa if the price of luxury goods decreases, the demand for them will increase. Inelastic: When the price is not sensitive to the quantity sold

  4. Consumer Confidence: This can have a significant influence on consumer expenditure. When consumers are feeling optimistic about the future, expecting their job prospects to be good and their wages to be high, they spend more. This is why sometimes the proportion of income spent can rise as income rises. Age Structure: This affects consumer spending because younger and older people are generally thought to spend a relatively high proportion of their disposable income. This, however, is not always the case. A lot of people save their money.

  5. Consumer Expenditure in the News • http://www.bbc.co.uk/news/business-19841024

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