CHAPTER 9

THE PROPENSITY TO CONSUME: II. THE

SUBJECTIVE FACTORS

I

THERE remains the second category of factors whichaffect the amount of consumption out of a given income—namely, those subjective and social incentives whichdetermine how much is spent, given the aggregate ofincome in terms of wage- units and given the relevantobjective factors which we have already discussed.Since, however, the analysis of these factors raises nopoint of novelty, it may be sufficient if we give a cata-logue of the more important, without enlarging onthem at any length.

There are, in general, eight main motives or objectsof a subjective character which lead individuals torefrain from spending out of their incomes:

(i) To build up a reserve against unforeseencontingencies;( ii) To provide for an anticipated future relation

between the income and the needs of the individualor his family different from that which exists inthe present, as, for example, in relation to oldage, family education, or the maintenance of

dependents;(iii) To enjoy interest and appreciation,i.e. because a

larger real consumption at a later date is pre-ferred to a smaller immediate consumption;

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