Shopper Nation: Why We Buy or Don’t Buy

The decision whether to buy something is complex. Anyone making a purchase has to decide whether they can afford it. Economic theory tells that for most consumers, wage and salary gains matter the most when considering purchases. The faster worker compensation rises, the better off households would be, and the more they can spend. Over time, people worry more about their incomes than anything else. Factors that threaten their jobs or their wealth are translated into lower spending. Positive events that cause people to believe their salaries would rise would loosen the purse string. Those positive and negative factors are the ones that are needed to be looked at if the direction of consumer purchases is to be understood. The shopping by consumers depends on their incomes and wealth, their debt levels and their willingness to take on debt, confidence, and where they are in their lives. That means that context is critical in any discussion about consumption. All of these are factors that businesses have to watch closely when they determine their business plans.