people at three different socioeconomic levels in Mumbai
Posts tagged with spending
In the 1930s, almost 10 percent of [American] Christmas spending was financed with money squirreled away into Christmas clubs—bank accounts … helping consumers save for the holiday. Participants promised to contribute weekly, frequently as little as $0.25 at a time. …
Since 1970, by contrast, the explosive growth in consumer credit has had the opposite effect, helping consumers fall prey to their lack of self-control when it comes to borrowing. In recent years, one-third of [American] holiday spending is still not paid off two months after Christmas.
Work less. Spend less. Live more.
—chalked on a sidewalk at my college, years ago
I was reading economics at the time, so it made a lot of sense to cast the preference in terms of isoutility curves. As long as the level curves of
(consumption, leisure) space are sufficiently close to parallel the consumption axis, the above suggestion is rational, even optimal.
In terms of partial derivatives,
∂𝓤 / ∂leisure > ∂𝓤 / ∂consumption at many points in
(consumption, leisure) space. More to the point, the directional gradient along the budget constraint points leisureward even at the expense of consumption, for a meaningfully large fraction of the segment.