Hypothesis of the Disappearance of the Limits of Improvidence and Parsimony in the Function of Consumption in an Islamic Economy

Abstract

There is a rich literature about the analysis of consumption behavior from the perspective of Islamic economy. The focus of such literature has been on the incorporation of the effect of moral values on individuals’ consumption behavior. However, studies on consumption did not pay enough heed to the analysis of the ultimate effect of faith values on the track of consumption behavior over time. This desired track of consumption involves showing certain hypotheses and probabilities. This study suggests a normative statement which includes the gradual disappearance of parsimony and improvidence over time. This disappearance would correct the deviation of actual consumption of society members from the desired moderate consumption level, so as to make households’ consumption behavior at the desired level which is consistent with Islamic Sharia. The study emphasizes the need to develop analysis and research in two integrated directions: i) conducting more empirical studies to examine the consistency of the normative statement with evidence from real situations, and ii) conducting more analysis to develop a specific measure for the desired consumption levels as well as the limits of parsimony and improvidence.

Keywords: Disappearance of improvidence and parsimony limits, Desired moderate consumption level, Actual consumption, Improvidence and parsimony consumption levels, Track of households’ consumption behavior.