Consumption, in economics, the using up of goods created by production. Consumption often is regarded by economists as the end of the productive process, the purpose for which all production is undertaken. In its broadest sense, the term includes both capital consumption, or the using up of goods such as factory machines and tools in the production of other goods, and non-productive consumption, or the using up of goods for non-productive purposes. Economists generally prefer to restrict the term to non-productive consumption.

Non-productive consumption may result from the decision of a private individual or family to purchase particular goods or services. Similarly, it may result from the decision of a city, country, or the like to establish public facilities, such as roads or schools. Thus, non-productive consumption includes both private and social, or public, consumption. In a capitalist economy the emphasis is placed on private consumption; in a socialist economy, the emphasis is placed on social consumption.

Consumption may further be classified according to the types of goods consumed. These types include durable goods, such as cars and furniture, that have an expected useful life of three or more years; nondurable goods, such as food, petrol, and many articles of clothing, that are depleted or discarded relatively soon; and services, such as hairdressing and medical care.

The study of consumption, specifically consumer consumption, has become increasingly important in the 20th century. In a capitalist economy, the level and rate of consumer spending greatly affect that of business investment, which in turn affects the level of employment and the general prosperity. Moreover, the patterns of consumer purchasing determine the kinds and quantities of goods produced.


As wealth is produced in order to be consumed, and as there can be no consumption without production, the great processes of production and consumption are correlated to each other. When production is insufficient, consumption is checked, and suffering results because of unfulfilled human wants. Underproduction may result in underconsumption through lack of consumable goods, whereas overproduction may lead to economic crises, a reduction of mass purchasing power, and therefore also to underconsumption.