Autonomous Consumption

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.

BREAKING DOWN '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".

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RELATED FAQS
  1. What types of expenses are factored into autonomous consumption?

    Autonomous consumption is the level of consumption necessary to support everyday life in a zero-income scenario. Put another ... Read Full Answer >>
  2. What is the difference between induced consumption and autonomous consumption?

    The first step to determining the difference between autonomous and induced consumption is to look at what each of these ... Read Full Answer >>
  3. How does discretionary income relate to autonomous consumption?

    Discretionary income is money that purchases things beyond what one garners through autonomous consumption, which is the ... Read Full Answer >>
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