Talk:Consumption function

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BetacommandBot 11:24, 6 July 2007 (UTC)

Where the article says "disposable income" should that read "discretionary income"? BMurray (talk) 03:14, 16 January 2010 (UTC)

written at way, way to high a level

respectfully, I have a PhD in molecular biology, and I sympathize, but this article is written for a 1st year grad student or someone like that "affine function" are you kidding ? please, simplify it (use of words like autonomous and endogenous don't help !!!!!)

de?

i don't think the page explained what de is. Saffo.princess (talk) 19:17, 12 May 2010 (UTC)

What am I missing?

Consider that your income is zero. You have certain expenditures c0. Now this theory states, that as your income increases even marginally above zero, so does your consumption, thanks to the c1*Yd part of the equation. However, shouldnt consumption only increase beyond autonomous consumption when income is greater than autonomous consumption?

If you earn 0$ and have to spend 500$ to stay alive (autonomous consumption) your total consumption is 500$. Now when you earn 400$, your autonomous consumption is still 500$ but now you also have induced constumption of c1*400$ (lets say for c1 = 0,8 that equals 320$). That doesnt reflect real life behaviour at all (Im aware that economics mostly doesnt) even though the equation could be slightly modified to account for this problem. In my opinion, there is no way a person with income of 400$ will spend anything on nonessential (non autonomous) things.

So my question is, why doesnt the equation read C = c0 for Yd < c0 and C = c0 + c1 * (Yd - c0) for Yd >= c0 ? —Preceding unsigned comment added by 89.102.129.17 (talk) 15:53, 11 May 2011 (UTC)