Towards a Model of Islamic Consumer Behavior: Rethinking Demand Theory

Syed Ammad Ali

doi:10.15575/jieb.v6i2.56225

Authors

Syed Ammad Ali University of Karachi, Pakistan

DOI:

https://doi.org/10.15575/jieb.v6i2.56225

Keywords:

Demand Elasticity, Demand Theory, Islamic Consumer Behavior, Social Expenditure, Stone–Geary Utility Function

Abstract

Introduction/Main Objectives: This study develops an analytical framework for Islamic consumer behavior by examining how social responsibility, moderation, and minimum consumption requirements influence individual demand. Background Problems: The relationship between socially directed expenditure, private consumption, and demand elasticity remains insufficiently clarified. This study examines how social expenditure affects demand functions and how consumer preferences influence demand elasticities. Novelty: This study integrates comparative demand function analysis under alternative budget constraints with the Stone–Geary utility framework to distinguish consumption levels from demand responsiveness. Research Methods: This conceptual and analytical study uses literature review, textual analysis of Islamic sources, constrained optimization, and mathematical derivation based on Cobb–Douglas and Stone–Geary utility functions. Finding/Results: The Cobb–Douglas model shows that fixed social expenditure reduces private consumption demand, while own-price elasticity remains −1 and income elasticity exceeds one. The Stone–Geary model demonstrates that demand elasticities depend on preference parameters, minimum consumption requirements, prices, and income. Conclusion: Lower private consumption does not necessarily imply lower demand elasticity. The study contributes to Islamic consumer theory by clarifying the distinct effects of social income allocation and minimum consumption requirements on individual demand and its responsiveness.

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