Reflections on the Theory of Consumption: Links between Income, Demand for Food and Consumption

The simple neo-classical theory of consumption refers only to individuals and their utility maximization. To enable households to be analysed, they are assumed to be homogeneous units ⁵³ with a joint utility function. Household resources are also assumed to be held jointly and to be allocated in line with relative prices in such a way that household utility is maximized. The homogeneity of the household enables household decisions and utility to be treated in the theory like the decisions and utility of individuals.