Consumption Patterns and Trends

Economics and Consumption Patterns

The term consumption pattern has been used to mean different things across history and disciplines. In economics, it has been mostly used to characterize a household's allocation of expenditures across different consumption categories, such as food, housing, clothing, and transportation. This definition has also been used in the marketing literature.

Allocation of household consumption expenditures has been of interest in economics since Ernst Engel detected that as a household's income increased, the proportion spent on food decreased. [Page 351]This tendency is now known as Engel's law and it has been well supported by empirical findings. Later, this law has been found to also apply to categories of housing and clothing, both in terms of absolute amounts and in terms of income elasticity—which indicates that the portion of incremental income spent on food, housing, and clothing decreases with each increase in income.

The term consumption pattern can also be found being used to define differences in households' use of products within the same consumption category. For example, when William T. Tucker found that people drank more gin and vodka on the West Coast of the United States, more Scotch on the East Coast, and more bourbon in the southern states, this variation was expressed in terms of differing consumption patterns. According to this usage, consumption of more red meat in certain households in comparison to poultry consumption in others, or preference for sports utility vehicles in some parts of a country versus sedans in other parts would be considered variations in consumption patterns.

There are principal differences in these two usages of the term. Whereas the first usage relates to relationships among consumption categories, the second usage refers to differences within a consumption category. The two, however, may well be complementary, as consumption of different products within the consumption categories will probably affect the allocation of household budgets among them. Differences in the cost of habitual products in each consumption category, differences in the usage rates they necessitate, and the like, will impact on the portions of household budgets that go to each category. These two definitions of consumption patterns, therefore, need not be considered as compartmentalized and mutually exclusive.

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