Autonomous Consumption

AAA

DEFINITION of 'Autonomous Consumption'

The minimum level of consumption that would still exist even if a consumer had absolutely no income. This contrasts with discretionary consumption, which is used for non-essential items. When combined with discretionary income, a person's autonomous consumption determines his or her real income, or real wages.

INVESTOPEDIA EXPLAINS 'Autonomous Consumption'

Certain bills and expenses are deemed to be autonomous (or independent), such as electricity, food and rent, because these expenses cannot ever be entirely eliminated whether you have money or not. Even in the worst-case financial scenario, you would still need to eat and have a place to live. If a consumer's income were to disappear for a time, he or she would have to dip into savings or increase debt in order to pay these expenses, which is also known as being in a "dissaving mode".

RELATED TERMS
  1. Income

    Money that an individual or business receives in exchange for ...
  2. Microeconomics

    The branch of economics that analyzes the market behavior of ...
  3. Voluntary Simplicity

    A lifestyle that minimizes consumption and the pursuit of wealth ...
  4. Expense

    1. The economic costs that a business incurs through its operations ...
  5. Planned Obsolescence

    A manufacturing decision by a company to make consumer products ...
  6. Discretionary Income

    The amount of an individual's income that is left for spending, ...
RELATED FAQS
  1. What caused the American Industrial Revolution?

    The initial vestiges of industrialization appeared in the United States in 1790, when Samuel Slater opened a British-style ... Read Full Answer >>
  2. Is industrialization good for the economy?

    Industrialization is the process by which an economy moves from primarily agrarian production to mass produced, technologically ... Read Full Answer >>
Related Articles
  1. Budgeting

    Why Some Kids Never Leave The Nest

    Giving your children a free ride can be costly for both of you.
  2. Budgeting

    A Day Without Spending, A Lifetime's Worth Of Lessons

    Financial guru Suze Orman once challenged her fans to go a day without spending any money. Here are the lessons learned from this exercise.
  3. Budgeting

    The Beauty Of Budgeting

    Make it to the end of the month, before you run out of money.
  4. Credit & Loans

    The Disposable Society: An Expensive Place To Live

    Resisting the trend toward consumption will boost your bottom line and bolster the environment.
  5. Budgeting

    The Dark Side Of Bulk Buying

    Find out why getting more for less isn't always a great deal.
  6. Budgeting

    Kids Or Cash: The Modern Marriage Dilemma

    It now costs nearly $300,000 to raise a child for 18 years. Are you sure you're up for it?
  7. Economics

    Understanding Structural Unemployment

    Structural unemployment is an economic miss-match where workers fail to find jobs and employers with available jobs fail to find workers.
  8. Personal Finance

    Can A Family Survive On The U.S. Minimum Wage?

    As the political debate roars on, the numbers are clear: Even two full-timers at U.S. minimum wage can't keep a family of four above the poverty line.
  9. Budgeting

    5 Ways To Stretch Your Retirement Budget

    Living comfortably can be easy if you follow a simple plan.
  10. Economics

    What The National Debt Means To You

    The U.S. deficit seems to grow every year. But how does it actually affect you?

You May Also Like

Hot Definitions
  1. Standard Error

    The standard deviation of the sampling distribution of a statistic. Standard error is a statistical term that measures the ...
  2. Capital Stock

    The common and preferred stock a company is authorized to issue, according to their corporate charter. Capital stock represents ...
  3. Unearned Revenue

    When an individual or company receives money for a service or product that has yet to be fulfilled. Unearned revenue can ...
  4. Trailing Twelve Months - TTM

    The timeframe of the past 12 months used for reporting financial figures. A company's trailing 12 months is a representation ...
  5. Subordinated Debt

    A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known ...
  6. International Financial Reporting Standards - IFRS

    A set of international accounting standards stating how particular types of transactions and other events should be reported ...
Trading Center