Abstract

This paper starts with the claim that conventional theory of consumer behavior is based on a framework, which cannot be used to explain all aspects of consumer behavior. It suggests that consumer behavior is based on fulfilling needs and not on satisfying wants. And this is not merely semantic. It is a substantial difference and needs to be understood to properly explain the consumer behavior. It is also not a normative statement to say that consumer behavior is based on fulfilling needs. It is a positive statement reflecting reality. An alternative framework on this basis then has been developed for a more realistic analysis of consumer behavior. The proposed framework borrows elements from the methodological framework of Biology arguing that it provides more logical framework for analysis of consumer behavior. This framework allows us to analyze economic problem at micro level like israf, tabzir, itraf, wellbeing, consumer equilibrium etc. This framework takes the position that the economic problems like unemployment, poverty, underdevelopment, environment issues etc. are rooted in the consumer behavior and consumer decision-making. It has also been argued that the proposed framework provides a basis to make interpersonal comparison of wellbeing and hence provides objective basis for public policy choices. This is not yet a presentation on Islamic theory of consumer behavior. It is simply a proposal to see consumer behavior in a different perspective, which is claimed to be more realistic and more logical. A presentation will be made separately to use this framework to develop Islamic theory of consumer behavior, which will add the concept of ‘Rushd’ (as opposed to the concept of ‘Rationality’ in secular Economics) in understanding the consumer behavior in Islamic perspective.

Keywords

Consumer Behaviour; Objectives of Life; Sound Mindedness of Consumers; Daruriyat; Takmiliyat; Tabsiniyat; Homeostatic Balance; Indifference Curve; Interpersonal Comparison; Work Force; Time Value of Resources.