Four Laws of Consumption

Research output: Contribution to journalArticle

Abstract

Scientific knowledge can be distilled into a set of laws that are sufficiently general and robust to be useful in describing and predicting behaviour - the behaviour of physical objects (the orbits of the planets, for example), invisible forces (electricity), economies (why some prosper and others languish) and people (education as deliberate investment in human capital). This paper identifies four empirical regularities in consumption behaviour that are sufficiently general and pervasive to qualify as 'laws': Engel's law; the law of demand (the downward-sloping demand curve); quantities more dispersed than prices; and the 'law' of -12 for price elasticities. In each case, I survey previous research, use international evidence to illustrate the workings of the laws and demonstrate their practical use.

Original languageEnglish
Number of pages28
JournalEconomic Record
DOIs
Publication statusE-pub ahead of print - Jul 2019

Cite this

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title = "Four Laws of Consumption",
abstract = "Scientific knowledge can be distilled into a set of laws that are sufficiently general and robust to be useful in describing and predicting behaviour - the behaviour of physical objects (the orbits of the planets, for example), invisible forces (electricity), economies (why some prosper and others languish) and people (education as deliberate investment in human capital). This paper identifies four empirical regularities in consumption behaviour that are sufficiently general and pervasive to qualify as 'laws': Engel's law; the law of demand (the downward-sloping demand curve); quantities more dispersed than prices; and the 'law' of -12 for price elasticities. In each case, I survey previous research, use international evidence to illustrate the workings of the laws and demonstrate their practical use.",
keywords = "UNITED-STATES, DIVISIA MOMENTS, ENGEL CURVES, PRICE ELASTICITIES, GASOLINE DEMAND, BEVERAGE TAXES, STICKY PRICES, INCOME, FOOD, GIFFEN",
author = "Clements, {Kenneth W.}",
year = "2019",
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doi = "10.1111/1475-4932.12491",
language = "English",
journal = "Economic Record",
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Four Laws of Consumption. / Clements, Kenneth W.

In: Economic Record, 07.2019.

Research output: Contribution to journalArticle

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T1 - Four Laws of Consumption

AU - Clements, Kenneth W.

PY - 2019/7

Y1 - 2019/7

N2 - Scientific knowledge can be distilled into a set of laws that are sufficiently general and robust to be useful in describing and predicting behaviour - the behaviour of physical objects (the orbits of the planets, for example), invisible forces (electricity), economies (why some prosper and others languish) and people (education as deliberate investment in human capital). This paper identifies four empirical regularities in consumption behaviour that are sufficiently general and pervasive to qualify as 'laws': Engel's law; the law of demand (the downward-sloping demand curve); quantities more dispersed than prices; and the 'law' of -12 for price elasticities. In each case, I survey previous research, use international evidence to illustrate the workings of the laws and demonstrate their practical use.

AB - Scientific knowledge can be distilled into a set of laws that are sufficiently general and robust to be useful in describing and predicting behaviour - the behaviour of physical objects (the orbits of the planets, for example), invisible forces (electricity), economies (why some prosper and others languish) and people (education as deliberate investment in human capital). This paper identifies four empirical regularities in consumption behaviour that are sufficiently general and pervasive to qualify as 'laws': Engel's law; the law of demand (the downward-sloping demand curve); quantities more dispersed than prices; and the 'law' of -12 for price elasticities. In each case, I survey previous research, use international evidence to illustrate the workings of the laws and demonstrate their practical use.

KW - UNITED-STATES

KW - DIVISIA MOMENTS

KW - ENGEL CURVES

KW - PRICE ELASTICITIES

KW - GASOLINE DEMAND

KW - BEVERAGE TAXES

KW - STICKY PRICES

KW - INCOME

KW - FOOD

KW - GIFFEN

U2 - 10.1111/1475-4932.12491

DO - 10.1111/1475-4932.12491

M3 - Article

JO - Economic Record

JF - Economic Record

SN - 0013-0249

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