The New and Improved Consumer Behavior Theory

Abstract

Introduction One of the fresher breezes to rustle the leaves in the Black Forest of microeconomic theory has been fueled by the “new” consumer behavior theory, based on the household production function. The theory was developed in the early 1960s by Gary Becker, his colleagues and graduate students in the Labor Workshop at Columbia University. Becker's 1965 Economic Journal article, “A Theory of the Allocation of Time,” (1) is regarded as the seminal elucidation. But concurrently, other Workshop participants, such as Owen, Dean, Mincer, et al(2), did research on time allocation theoretics and applications, and credit for primal development of the new theory is also given to Lancaster for his 1966 paper, “A New Approach to Consumer Theory,” (3). However, one must go back to 1947 and Wassily Leontief's Econometrica article on the separability of functions (4) to find the clear Schumpeterian Vision necessary to evolution of the theory. Michael and Becker (5) have even claimed to find antecedents ranging back to 1789 and Jeremy Bentham's Principles of Legislation (6).

Citation

Meadows, E. (1977), "The New and Improved Consumer Behavior Theory", Studies in Economics and Finance, Vol. 1 No. 1, pp. 16-27. https://doi.org/10.1108/eb028586