Authors

• Ali Saeedy
• Mohammad Hadi Zahedi Vafa

Abstract

The most important behavior of individuals and households is consumption. As the
consumption compromises a considerable part of GDP in most of the countries, any
small change in the quantity and quality of it will have a huge impact on the growth
and development of the country. In conventional economics, consumption analyses
and theories only deal with the market variables such as prices and incomes and the
role of non-market variables, and the psychological and cultural ones, are ignored.
Non-market variables such as psychic expectations of consumers about the future of
the market, precautionary behavior, imitating behavior, consumer’s confidence in
the market and caring about relative consumption have substantive impacts on the
level of consumption so that they cause consumption either to be increased more
than enough in booms and generate bubbles, or to be declined more than enough in
recessions and make them longer and more intense. In designing its economic
system, Islam has directed and conducted innate incentives and motivations and also
posed legal and ethical constrains. In doing so, Islam has tried to manage
consumption behaviors so that it not only prevents extensive economic crises but
also provides the conditions for advancing the economy. Among the Islamic policies
which control the troubling part of the consumption and provide the necessary
demand for economic growth are: ethical settlement of the incentives before
entering the market, prohibiting prodigal consumption and planning to bring all the
people to a
Kafaf level of consumption, prohibiting Riba
and not recommending to
debt-financing the consumption, and finally, introducing divine incentives for
 
working and making money.

Keywords

• consumption behaviors
• economic crisis
• Kafaf level of consumption
• prodigal consumption