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Treatment of Consumption in Islamic Economics: An Appraisal

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  • Hasan, Zubair

Abstract

This paper attempts a broad appraisal of the literature on macro consumption function in Islamic economics. It starts with a brief look at the microelements of the concept and clears several cobwebs concerning wants and needs, scarcity of resources, the basket of goods, and the efficacy of utility and its maximization for consumer equilibrium. The explanations narrow down the conceptual gaps between the micro and macro level articulations of the subject. Next, the paper reviews some selected macro models resting on division of income on the basis of nisab between the upper (rich) and the lower (poor) classes of society for analyzing the impact of zakah-moderation mechanism on economic growth via the saving-investment route. It is demonstrated that, contrary to the claim based on models, the positive impact of Islamic scheme on the variables studied is uncertain, to put it mildly. Finally, attention is drawn to some recent developments in the treatment of consumption in economics as also to interest being shown in the subject in other social sciences. This inter-disciplinary approach seeks to detach consumption from income and links it to wealth. It also brings in environmental and ethical concerns into the picture. The effort promises to bring the treatment of consumption closer in the two economic disciplines, secular and Islamic: it is a welcome development.

Suggested Citation

  • Hasan, Zubair, 2005. "Treatment of Consumption in Islamic Economics: An Appraisal," MPRA Paper 3059, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:3059
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    File URL: https://mpra.ub.uni-muenchen.de/3059/1/MPRA_paper_3059.pdf
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    Citations

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    Cited by:

    1. Ghassan, Hassan B., 2015. "نموذج النفقة والإعتدال حسب كتابات الشيباني
      [Spending and Fairness Model Based on the Writing of Shibani]
      ," MPRA Paper 80603, University Library of Munich, Germany, revised 2016.
    2. 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.
    3. Ghassan, Hassan B., 2015. "Islamic Consumer Model, Fairness Behavior and Asymptotic Utility," MPRA Paper 67141, University Library of Munich, Germany.
    4. Nizar, Muhammad Afdi, 2007. "Analisis Pengaruh Imbal Hasil Dan Suku Bunga Terhadap Tabungan (Saving Deposits) Bank Syari’Ah Dan Bank Konvensional Di Indonesia
      [Effect Of Return And Interest Rates On Saving Deposits Syari'Ah An
      ," MPRA Paper 65612, University Library of Munich, Germany.
    5. Murat Çokgezen, 2016. "Islamic economics in real life: Do Muslims give more than the others?," Working Papers hal-01349872, HAL.
    6. Nizar, Muhammad Afdi, 2007. "Analisis Perilaku Menabung Masyarakat Dalam Deposito Pada Bank Syari’Ah Paska Fatwa Mui Tentang Keharaman Bunga
      [Saving Deposits in Bank Syari'ah After MUI Fatwa on Prohibition of Interest Rates]
      ," MPRA Paper 65611, University Library of Munich, Germany.

    More about this item

    Keywords

    Islamic economics; consumption; israf; zakah; income determination model;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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