By Salman Ahmed Sheikh
Abstract
Consumer behavior is the focal point of understanding, identifying and estimating the market demand followed up by supply side response with product offerings, design and marketing efforts. It is also the core area of Economic research in microeconomics and recent micro-enriched macroeconomics. In this paper, we explain the normative basis of Islamic economics in general and elucidate consumer theory from Islamic perspective in particular. On the demand side, Islamic worldview based on oneness of God and afterlife accountability greatly influences the decisions, actions and choices of the consumer. We discuss how Islam places certain balancing limits on consumer choice set and budget constraints for greater welfare of the consumer himself and society in general. On the supply side, we explain the guiding principles and norms marketers must follow in product design, advertising and promoting their products. Finally, we discuss the consumerism culture, its relation with credit based monetary system and its contemporaneous and intertemporal effects on environment and distribution of resources.
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