The Consumption Function: Marketing's Role in Economic Development

Introduction Everyone agrees that increasing levels of economic development is good, but hardly anyone agrees on how to achieve it. Theorists cannot even agree on what constitutes economic development; each writer on economic development uses his own measure or measures of development. Many of these measures represent attempts to assess levels of production and/or consumption in the economies studied. Thus, it would seem that the achievement of higher levels of production and consumption is a common goal of economic development theorists. The production‐consumption thesis is an accepted tenet in economic development planning. Unfortunately, most of the production‐consumption theories and planners have focused their attention entirely on developing the productive capacity end of the equation, under the assumption that increases in consumption will automatically follow increases in production. (See Figure I for an illustration of this dichotomy between theory and policy.)