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A Consumer Model and Social Welfare Based on the Writings of Shibani (750-805 AD, 131-189 AH)

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  • Ghassan, Hassan B.

Abstract

The novelty of Shibani’s earning model is its integration of Zakat and other social giving in the social welfare function, which makes the consumer utility a multi-dimensional devotional, material, ethical, social, Shariah-compliant function. In the model, the consumer’s income evolves increasingly from imperative earning that covers consumer’s basic needs, to recommended earning that covers basic needs of relatives; and to permissible earning that covers the poor’s needs. Accordingly, the model has imperative, recommended, and permissible utility. The rich consumer draws additional utility from Zakat spending in favor of the poor consumers. Based on the social solidarity, we show that the marginal earning depends on the first difference between the MPC of lower and upper social groups. The permissible marginal utility is related to the faith interaction and enhances the social utility as social transfer is paid to poor and needy groups.

Suggested Citation

  • Ghassan, Hassan B., 2015. "A Consumer Model and Social Welfare Based on the Writings of Shibani (750-805 AD, 131-189 AH)," MPRA Paper 72441, University Library of Munich, Germany, revised 05 Mar 2016.
    • Handle: RePEc:pra:mprapa:72441
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    Cited by:

    1. Khan, Muhammad Akram, 2020. "Theory of Consumer Behavior: An Islamic Perspective," MPRA Paper 104208, University Library of Munich, Germany.
    2. Ghassan, Hassan B., 2016. "Re-examining the equation of exchange according to Shariah rationale money," MPRA Paper 91666, University Library of Munich, Germany, revised Jul 2018.

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    More about this item

    Keywords

    consumer; faith; Zakah; imperative; recommended; permissible; earning; spending; utility.;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D6 - Microeconomics - - Welfare Economics
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • P46 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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