Sample Essay on Analysis and Recommendations

Analysis and Recommendations

Revealed preference theory is one of the oldest macroeconomic approaches, which postulates that consumer choice is revealed through what they purchase considering the price and circumstances. This theory suggests that if a given consumer purchases a specific batch of goods, then that batch is a revealed preference provided it is in the same price category compared to any other batch that the customer can afford (Moore, 2007). Later, this theory generated three axioms, namely the weak, strong, and generalized axioms.  All these axioms determine consumers’ propensity for consumption behaviors, products, and services in a given community.

Sustainable consumption behavior in any particular community depends on some factors, including the following:

  • Consumer tastes and preferences regarding certain goods and products. A commodity in a nice packaging or produced by a famous brand is most likely to be bought by customers. Consumers mostly prefer goods which promise full satisfaction of their certain needs when talking about practical utility and overall attractiveness.
  • Attitudes and beliefs is another critical issue which determines consumer behavior. Particular religions and communities restrict the use of some goods or products since they define them as illegal and unethical. For instance, in Islam, pork consumption is strictly forbidden; thus, an individual aiming at selling pork in Muslim countries will not thrive. As such, this lowers the propensity for consumption in this area regarding certain products.
  • Saving and investment strategies also reveal consumer behavior. When a consumer makes a lot of investments, it leaves him or her less money to spend on products and goods. The lower the saving, the more money is available for shopping, thus increasing consumer consumption on the market.
  • The level of income has strong impact on consumer behavior. If a salary is high, a person can afford more goods, expensive in particular. On the contrary, when a customer does not earn that much, he or she buys only the most necessary goods, thus not being a good consumer from a marketer’s point of view.

The marginal propensity for products and services consumption explains how consumers purchase certain goods and products. This is triggered by such factors as the quantity and quality of products or services. When goods or services are provided at high quality, customers will be attracted to spend more and more on the product. People with average incomes are more interested in the quantity of goods rather than their quality. When dealing with middle class, the propensity for goods consumption can be achieved by the wide range of products without raising the prices.

The level of satisfaction and after-sales service offered also influence how a particular product will be consumed. Goods with warranties are more consumable/ purchasable when compared to those without warranties. They raise customer trust making them calm down since they can expect fair and quality services.

Demand and supply forces also determine how certain products and services will be consumed. When the demand is high, the prices automatically fall causing the product to become affordable thus increasing its consumption. In case the supply is low, the product becomes scarce, and therefore its consumption significantly decreases (Prothero et al., 2011).

In conclusion, consumer behavior regarding consumption of products and services is determined by supply and demand forces, the level of saving, attitudes and beliefs, and prices and product specifications among other. These aspects are clearly revealed by the application of reveal preference theory discussed above. For this reason, marketers should conduct intensive research to improve the level of sales and consumer consumption.


Moore, J. C. (2007). General equilibrium and welfare economics: An introduction to preference theory. Springer-Verlag Berlin Heidelberg.

Prothero, A., Dobscha, S., Freund, J., Kilbourne, W. E., Luchs, M. G., Ozanne, L. K., & Thøgersen, J. (2011). Sustainable consumption: Opportunities for consumer research and public policy. Journal of Public Policy & Marketing, 30(1), 31-38.