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Consumption cost

Economic terminology
In a broad sense, consumption cost refers to the cost that consumers pay in the process of realizing the utility of consumer goods or services, including all expenditures related to the whole process of purchase and consumption, and it is the sum of all aspects of consumption motivation generation, search, search, understanding, comparison, purchase, use, damage and scrap, and supporting expenditures.
Including consumer price cost, consumer transaction cost and incidental cost of consumption. Among them, the cost of consumer price is the price at which consumers purchase goods or services from manufacturers, which forms the costs and profits of manufacturers; Consumer transaction cost is the cost of consumers using market system, including information cost, negotiation cost, contract signing cost, supervision and implementation contract cost, etc; The incidental cost of consumption is the cost of goods or services that consumers must pay jointly when consuming a kind of goods or services.
In a narrow sense, consumption costs refer to the transaction costs and incidental costs paid by consumers.
Chinese name
Consumption cost
Foreign name
consumption cost
Definition
The price paid by consumers in the process of realizing the utility of consumer goods or services, including all expenditures related to the whole process of purchase and consumption, is the sum of consumption motivation generation, search, search, understanding, comparison, purchase, use, damage and scrapping, and supporting expenditures

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1. In order to realize the consumption of purchased goods or services, additional expenditures for complementary products with supporting or auxiliary nature and functions, maintenance, repair, etc. need to be purchased. For example, after purchasing a car, it is necessary to purchase fuel and repair it during use, and replace the ink cartridge of the printer. This kind of expenditure is usually repeated and continuous, that is, it occurs continuously with the continuous consumption of purchased products. It is mainly generated from the needs of consumption objects themselves, which belongs to the internal needs of specific consumption. It is determined by the natural attributes of consumption objects. Most of them are objective and indispensable. No matter how much they spend or the price changes, the items to spend are relatively stable. [1]
2. In order to realize the consumption of purchased goods or services, other necessary taxes and fees, as well as fees that should but may not have been paid due to their various negative externalities (causing various losses to the ecological environment, others or future generations). For example, after purchasing the house Property management fee Various fees and taxes that need to be paid after purchasing the car. This is usually repeated and continuous. It is mainly produced in the consumption environment, belongs to the external needs of specific consumption, and is determined by the social attributes of consumption objects, many of which are institutional and policy oriented. The items and quantity of its expenditure are variable.
3. All other costs to be paid in order to realize the consumption of purchased goods or services. This includes: (1) the time opportunity cost to be paid, for example, the consumption time may occupy the time to make money, and this consumption time may crowd out the time for other types of consumption. (2) Loss of physical health to be paid, such as smoking, drug abuse, etc. (3) Spiritual consumption and psychological burden to be paid, such as various troubles, worries and unhappiness in consumption, including damage to consumers' rights and interests. (4) The relationship costs that need to be paid, such as many consumption (such as entertainment parties, banquets, even golf, etc.) can only be carried out by multiple people or groups, which requires time, energy and money to maintain certain interpersonal relationships. (5) It is necessary to pay for the cost and time of learning and training to further acquire relevant consumer knowledge, skills, etc., such as the use of technology learning and training after purchasing a computer. (6) Risks that need to be faced with uncertainty, such as various possible accidents in tourism (such as plane crash, car crash and ship overturn, mountain collapse and avalanche, etc.), losses in the consumption process due to deception, counterfeiting, etc. (some of them also belong to (3)). These expenditures are mainly generated from consumers' own conditions, characteristics and many uncertain factors. The vast majority of these expenditures are determined by the natural and social attributes of consumers, consumption objects and consumption environment. They are different for different consumers, and they are also variable for the same consumer.
From the above three levels, it can be seen that each level is broader and more flexible than the other, and the calculation difficulty of each level is gradually increasing. It should be pointed out that this division of consumption costs is made for the whole consumption of goods and services, but if specific consumption objects are involved, they may not all have these three levels at the same time. For example, some no longer need complementary products, and some no longer need to pay additional fees.
In addition, these three levels can be divided into two forms. Among them, (1) and (2) can be directly calculated and paid in currency, which can be expressed as the monetary form of consumption cost, also known as the cost of money consumption; (3) It can not be directly calculated and paid in currency, which can be expressed as a non monetary form of consumption cost, also known as non monetary consumption cost, but it can be measured and paid by converting currency into monetary form.
Since the consumption cost can ultimately be measured and paid in currency, it can be divided into one-time payment and multiple payment according to the number and size of payments, such as the setting off of fireworks and firecrackers and the consumption of most of the goods listed above; Pay for decreasing and increasing consumption costs, such as the effect of savings in consumption and the increase of maintenance costs or the emergence of new products with higher prices; Negligible and tradeoff consumption costs, such as TV electricity, leather shoe oil and air conditioning electricity, car fees and taxes; The cost of consumption that is always lower than the value of consumer goods and gradually exceeds the value of consumer goods, such as Property management fee And printer cartridges, etc.
In addition, from the perspective of payment subjects, consumption costs can also be divided into personal costs and social costs. The former is directly paid by consumers themselves and determined by the internality of consumption; The latter is borne by the society for consumers and is caused by the negative externalities of consumption. stay Modern market economy In China, with the expansion of market-oriented consumption, consumption behavior and its consequences will be quantified as much as possible, and the social cost of consumption will gradually decrease, that is, it will be transferred to the personal cost of consumption as much as possible. Of course, consumption costs can also be classified into other categories.

Features

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1. Certainty and uncertainty. Any consumption cost that can be directly paid in currency can be directly calculated, and the relevant items and scope are generally specific, obvious and definite; However, those that cannot be directly paid in currency are different due to people, time, place and various other conditions. For some people, it can be ignored, while for others, it is difficult to accept or bear. It also changes with the quality of the consumption environment and the adjustment of the government's consumption policy. [1]
2. Reality and future. Whether spending or not, the cost of consumption will be undeniably placed in front of consumers, who will feel and know it, and for some people it may still be a lingering pressure; However, the specific payment generally occurs in the consumption to be carried out, so the consumption cost is actually a future expenditure.
3. Sustainability and variability. Expenditures on consumption costs are generally not completed at one time. As consumption continues, it is required to spend consumption costs several times in succession, unless consumer goods are scrapped or abandoned. At the same time, with the continuous development of social consumption, the consumption cost has a double trend of increasing and decreasing, which will be specifically explained in the following "consumption cost is the display of social consumption development".
4. Naturalness and sociality. Here, naturalness mainly refers to the materiality of consumption, while sociality mainly refers to all other aspects. From the analysis of the three levels of consumption cost composition, we can see that they all depend on consumer goods and the natural and social attributes of consumption. Accordingly, the adjustment or change of it will also reflect or lie in the adjustment or change of the natural and social attributes of consumer goods and consumption. At the same time, it also shows that it not only has a purely material and purely economic aspect, but also has social, political, cultural, spiritual, psychological and other aspects of the role and significance. Obviously, this feature makes the consumption cost have the nature and significance related to the system.
5. Objectivity and subjectivity. This is mainly because the consumption cost is formed and changed by the combination of consumption object, consumption environment and consumers, and these three aspects are the combination of object, objectivity, subject and subjectivity. Unlike the production cost, which does not depend on the feelings and evaluations of its producers, it is directly related to such factors as the psychology of consumer spirit. Moreover, there are different situations in the specific evaluation and payment of consumption costs.
Obviously, the above analysis facilitates the specific understanding, measurement (including the establishment of consumption cost function) and research of the entire consumption cost, as well as the adoption of various relevant countermeasures, providing a new perspective for consumption research and policy.

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The role of consumption cost is not limited to consumption itself, but also has a direct impact on production, distribution, exchange, and other non economic fields in the whole social reproduction process. Here is a brief analysis of consumption. [1]
(1) Consumption cost is an important factor restricting consumption
1. Consumption cost is a threshold for people to consume.
First, as part of the cost of money consumption, it constitutes the monetary or price threshold for people to consume. This is an objective threshold. Even if people can buy the consumer goods they need now, but the amount of their consumption cost exceeds the possible or intended expenditure in the future, such consumer goods will not be purchased. For example, someone is right BAIC Motor According to the market survey, more than 50% of the respondents believe that the use cost is too high, and many people can not afford to buy cars; When people buy a printer, they often choose a brand and model that can bear the cost of its use (that is, the price of replacing the ink cartridge); When people buy houses, they often consider Property management fee Determine the type and location of house purchase on the basis of transportation fees; Farmers in many places may not be able to afford refrigerators. What they worry about is the high cost of electricity. Of course, this threshold is different for consumers of different income levels. Generally speaking, high-income people don't care much about the cost of money consumption. The key is whether they are satisfied with the consumption itself (including the sense of superiority, flaunt or advertising effect), so their money price threshold is somewhat absent; Middle income people have a certain tolerance for the cost of money consumption, but when making consumer purchases, they often have to carefully consider how much it is and its impact on other expenditures, so there is a selective or temporary threshold; The current income of low-income people may be insufficient, and the expected new income is not optimistic. They have difficulty in paying for the cost of new money consumption, especially among low-income retirees. They may never buy many goods, such as cars, even if they can buy them, so there is a long-term, invariable or lifelong threshold. Secondly, as part of the cost of non monetary consumption, it constitutes the non monetary or preference threshold of people's consumption. This threshold is usually accompanied by the previous threshold, but it may also exist independently, and has strong subjectivity. Assuming that people do not have a monetary price threshold, those who cherish time may reduce or give up time-consuming consumption, such as vacations, tourism, even banquets and social networking, if they are unwilling to pay the cost of time consumption; People who care about their bodies will not smoke or drink too much; People who like to have little concern or fear of trouble will be afraid of the unhappiness and risks caused by fraud, counterfeiting and shoddy goods. They simply refuse to consume, and also feel that it is better to take a taxi to buy a car, so as to avoid the trouble of parking, anti-theft, car maintenance, repair or the risk of accidents; However, those who only pursue specific satisfaction such as pleasure or fashion in consumption do not care much about the drawbacks of non monetary consumption costs.
Similarly, the level of this threshold is different for consumers at different income levels, but it is opposite to the money price threshold. Generally speaking, high-income people worry about how to spend more and better, pay more attention to non monetary consumption costs, and will treat this threshold very carefully. When considering the monetary price threshold, the middle-income people will more or less consider the non monetary consumption cost, so they often consider the two thresholds at the same time. When purchasing consumer goods, low-income people first consider the monetary price threshold. Because of insufficient consumption, they will not pay attention to the threshold of non monetary consumption costs for the time being. For example, some people prefer to go far away to buy cheap goods or know that the goods are fake and shoddy products, but they can still buy them because of the low price, so that fake alcohol poisoning occurs.
The threshold of consumption cost will probably suppress people's consumption enthusiasm, hinder people's consumption structure upgrading, and cause consumption fault.
2. The consumption cost forms crowding out effect, substitution effect and income effect on people's consumption.
The so-called "crowding out effect" refers to the payment of existing consumption costs, which may crowd out the purchase expenditure of other consumer goods, thus squeezing out their current or future consumption. Obviously, the crowding out effect of consumption costs directly depends on people's current and future incomes and various expectations, and changes in the opposite direction. The so-called "substitution effect" means that people will replace or reject the consumption with higher consumption costs by purchasing or doubling the purchase of similar consumer goods with lower consumption costs. If One way charging After the launch of PHS, people have bought or changed their mobile phones to PHS; However, some people believe that within three years, PHS will be eliminated when the cost of mobile phones with better efficiency is reduced. It can be said that many new products can occupy the market and win more consumers, to a large extent, because they have the alternative advantage of lower consumption costs. Of course, the above monetary consumption costs and non monetary consumption costs also have substitution effects or relationships. The so-called "income effect" means that as people have more and more disposable income, on the one hand, the priority of how much money to spend gives way to the value of money that is not worth spending, so the emphasis on the cost of money consumption is gradually reduced, and people are more willing to spend money; On the other hand, the expansion of consumption brought about by this has caused the same consumer to face the conflict between their own consumption ability and a variety of consumption choices at the same time. Therefore, the importance of non monetary consumption costs, including the opportunity cost of consumption, has been constantly strengthened, and more attention has been paid to the quality, function, grade, taste and rights of consumption, in order to achieve consumption optimization. From the perspective of the history and current situation of consumption in developed countries, it can be said that it is a universal fact and law. In China, however, this is still the case of a small number of people (high-income people), and most consumers tend to pay more attention to the cost of money consumption.
(2) Consumption cost is a display (indicator) of social consumption development
With the continuous development of social economy, people's income level is increasing and consumption is expanding. People's consumption costs will continue to increase. It is shown in the following aspects:
1. The consumption cost of new consumer goods is becoming increasingly prominent. In the development of consumption in the whole society, people's consumption objects are mainly survival materials at first, and then the gradual emergence and expansion of development and enjoyment materials. The consumption cost mainly exists in the development and enjoyment materials. From the perspective of consumption hotspots gradually formed in recent years in China, urban residents are concentrated in housing, cars, communications, education, tourism, culture and entertainment, while rural residents are concentrated in durable consumer goods and children's education. Most of these consumers are for development and enjoyment, with consumption costs, and their proportion is increasing.
2. The cost of maintaining the original consumption may also increase. This is mainly because, in the process of consumption, because of the diminishing marginal utility, the seemingly equivalent consumption cost will actually increase relatively; At the same time, as consumer goods continue to wear out, the maintenance (repair) costs of continued use will also directly increase the cost of consumption.
3. Non monetary consumption costs are on the rise. Compared with people's limited life time, income seeking time, consumption time and consumption ability, people are facing the trend of unlimited increase, expansion and improvement in the number, quality, type and scope of consumption objects. As a result, it is more and more difficult for people to choose consumption and the opportunity cost is higher and higher. Moreover, everything always appears and develops with advantages and disadvantages, so for more and better consumption, it may also bring new troubles, burdens or risks.
Of course, if there is an abnormal state in social and economic life, then the consumption costs that are abnormal, unnecessary, and maliciously manufactured will also increase, but this will not be allowed by society in the end.
In addition, the unit consumption cost of people has a downward trend. This coexists with the rising trend of the total cost of consumption. Due to the continuous progress of science and technology, the quality of products is getting higher and higher, the functions are becoming more and more complete, the use is becoming more and more convenient, the energy consumption is constantly reduced, and the upgrading is ongoing; With the increasing consumption knowledge and ability, people increasingly know how to improve the efficiency of product consumption, or try to save or avoid expenses and other costs in consumption according to the consumers and their own characteristics; Due to the development of social economy and the reform and innovation of the system, the government and all relevant parties will formulate policies and measures that are more and more conducive to consumers, create a better consumption environment, reduce consumers' consumption burden (such as fees and taxes), safeguard consumers' rights and interests, eliminate various abnormal and man-made consumption costs, and so on, Will lead to the unit consumption cost gradually from more to less.
Therefore, under the normal state of social and economic life, the consumption cost and its increase, from one aspect, explain or mark the changes of people's consumption object expansion, consumption structure improvement, consumption level rise, consumption stage progress and consumption ability enhancement. Consumption cost and its decline, on the other hand, indicate or mark the continuous improvement and optimization of people's consumption knowledge, ability, technology, efficiency and environment. All these indicate or mark the continuous improvement of the consumption level of the whole society, the continuous development of social economy, politics, culture, science and technology, and the continuous progress of human civilization. All these can be understood and expressed through the specific statistics of consumption cost and consumption cost function.
(3) Consumption cost is a policy measure object for the government to regulate consumption and expand domestic demand
Since 1997, insufficient domestic demand and low consumption have been a major problem for the government to regulate and develop the economy. From the perspective of promoting specific consumption, people have discussed issues such as further reducing taxes and fees related to car purchase, changing mobile phone charges from two-way charging to one-way charging Monthly telephone rental , housing property management fees, farmers' household electricity fees, various after-sales services to combat fraud and counterfeiting, protect consumers' rights and reduce their worries, as well as banquet taxes that restrict public funds to eat and drink, and the reform of public car consumption, are actually or include consumption costs; From the perspective of expanding overall consumption, the policies and measures proposed by people (including those adopted), such as increasing residents' income, enhancing residents' consumption willingness, raising residents' consumption expectations, improving the consumption environment, changing consumption concepts and improving social security system All of them involve or have consumption costs. However, all these have not yet been raised, clarified, deepened, and focused on the consumption cost problem and theoretical height to further explore the expansion of consumption. Therefore, the category of consumption cost has established a general, specific, clear and prominent new vision and focus to further promote consumption and its theoretical research; It provides a direct, clear and effective target for the formulation and implementation of consumption policies and measures. As a government and its relevant departments, whether it wants to stimulate consumption or restrain consumption, it can, according to the composition of consumption costs of consumer goods and their relationship and characteristics, according to the relationship and characteristics of consumption costs and consumers, consumption objects, consumption environment, etc., and according to consumers' understanding, response, affordability and differences of consumption costs, Formulate corresponding consumption policies and measures (limited to space, not specific analysis for the time being) to effectively achieve its regulatory purpose. In particular, it should be pointed out that for the social vulnerable groups, including all kinds of low-income people, their ability to bear monetary consumption costs is very poor and their consumption level is low. To change their consumption situation, in addition to increasing their absolute income, it should be said that it is a very practical, flexible and effective way to reduce their consumption costs in many ways.
(4) Consumption cost is a breakthrough for manufacturers to occupy the market and win consumers
If manufacturers have a good understanding and grasp of the composition, characteristics, functions and laws of consumption costs, then, (1) they can understand the situation of consumers they face, such as consumption capacity, preferences and trends, so as to develop correct marketing strategies, carry out accurate market segmentation and product positioning. (2) It can be used to better understand and determine the product use cost, because the consumption cost is not only similar to it, but also closer and more convenient to understand consumers, which is conducive to efforts to reduce products life cycle cost , reduce the cost of the enterprise and improve the substitution advantage of its products. (3) According to this, we can directly improve the quality, performance and use of products, develop new products, thus reducing the consumption restrictions of products and winning more consumers. Such and so on are worthy of in-depth and specific research.