consumptions

Consumption is the use of goods and services by households and individuals to satisfy wants and needs. In economics, the term is often used to refer to final consumption—spending by households on goods and services for immediate use, rather than investment or government purchases. The plural "consumptions" is uncommon; when used, it can denote different instances, periods, or types of consumption across sectors or countries. The field also distinguishes energy consumption and material consumption as specific applications of the general concept.

Measurement: In macroeconomics, consumption is the "C" in the GDP expenditure approach (GDP = C + I + G + NX). It includes nondurable goods, durable goods, and services. It is typically the largest component of GDP in many economies, though shares vary by development level and culture. Data come from household surveys and national accounts.

Determinants and theories: Disposable income, prices, credit availability, and expectations influence consumption decisions. Theories include the life-cycle hypothesis and permanent income hypothesis, which model consumption smoothing over time; the marginal propensity to consume describes how consumption changes with income. Engel's law notes that the share of income spent on food declines with rising income.

Other considerations: Consumption patterns affect resource use and the environment; policy can influence consumption through taxes, subsidies, social programs, and financial conditions. Cross-country differences reflect development, culture, and institutions. Historically, the term consumption also referred to tuberculosis; today this disease sense is largely separate from economic consumption.