Isefid presentation (300318)
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The document discusses consumer behavior from an Islamic economic framework. It notes that conventional theories of consumer behavior focus on utility maximization and do not consider ethical consumption. The document then examines different types of traditional and excessive consumption behaviors. It proposes that an Islamic perspective focuses on need fulfillment rather than satisfaction of wants. Balancing needs rather than optimizing is also an important element. Excessive or wasteful consumption that exceeds needs should be avoided according to Islamic principles.
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Isefid presentation (300318)
- 1. Presented by Zein Muttaqin At ISEFID Weekly Discussion Venue: PLB of KENMS 30 March 2018 The Nature of Excessive Behaviour In Islamic Economic Framework: An Investigation
- 2. 則 The availability of many conventional theories and models of consumer behavior were seen inadequate to educate consumers on how to consume ethically, eventually to overcome the current consumption issues, such as wasteful use of resources, labour and capital (Adnan, 2011). 則 This trends is asserted by Anup Shah (2008) that Todays consumption is undermining the environmental resource base. It is exacerbating inequalities. And the dynamics of the consumption-poverty- inequality-environment nexus are accelerating. If the trends continue without change not redistributing from high-income to low-income consumers, not shifting from polluting to cleaner goods and production technologies, not promoting goods that empower poor producers, not shifting priority from consumption for conspicuous display to meeting basic needs todays problems of consumption and human development will worsen. Introduction
- 3. 則 The very manner of rational consumer who comes up to decide of purchasing goods or services defined as consumer behaviour (Cornescu & Adam, 2015). 則 Most of theory in discussing of consumer behaviour is related how the consumer made decisions over they preferences on goods also the ultimate utility values that will be perceived (means maximizing the utility values). 則 Khan (2013) criticized that the theory of consumer behaviour is ignoring the role of ethics in consumer's decision making is bound to leave out such pressing economic problems like alleviation of poverty and sustainable development outside the mainstream of economics. Consumer Behavior Revisited
- 4. Traditional Consumption Behaviour High Utilitarian Reinforcement Low Utilitarian Reinforcement High Informational Reinforcement ACCOMPLISHMENT ACCUMULATION Low Informational Reinforcement HEDONISM MAINTENANCE 則 Accomplishment are maintained by high levels of both utilitarian and informational reinforcement and may include conspicuous consumption behaviors such as buying status cars 則 Hedonism are characterized by high levels of utilitarian reinforcement and are usually reinforced by entertainmentfor example, watching popular TV programs might be placed in this category. 則 Accumulation are principally reinforced by informational reinforcement and may include collecting trading stamps or points in a loyalty program (for a supermarket). 則 Maintenance are routine behaviors necessary to sustain ones physiological being (eating, sleeping) and to function as a member of a social group, or a citizen in society (paying taxes for inescapable consumption or getting a passport).
- 5. 則 The Islamic faith values consist of the fundamental concepts and the Shariah statements that govern a Muslims individual relationship with the Almighty Allah and determine his belief holding. 則 As for the ethical values, they correspond to the positive attributes that govern the individual relationship with the people through the fundamental principles and human law statements. 則 Subsequently, these latter live up the ethical values that could interact positively with the faith dimension to produce habits and natures that make the individual fair with his/her community and inspire the community to be fair with its individuals. Islam and Muslim Decision Making Relationship
- 6. Needs and Maqasidh Al Sharia Tahsiniyat Hajiyyat Dharuriyat Faith Intellect LifeProperty Posterity 則 Dharuriyat, the level where the above five elements are barely protected. 則 Hajiyyat, the level where the protection of the above five elements is complemented to reinforce their protection, and 則 Tahsiniyat, the level where the above five elements are either ameliorated or refined
- 7. Islamic Core of Consumer Behavior Tabdzir Israf Avoidance of Excessive Consumption Wasteful Consumption In terms of definitions, some people equate definitions of israf (excessive) and tabdzir (wasteful) as extravagance behavior
- 8. In conventional framework of analysis of consumer behaviour at micro level, it is not possible to identify waste because a rational consumer always equates relative utility to relative prices. However, conventional economic science tends to limit their attention of the wasteful subject. Hence, waste should be recognize in manner of, Wasteful In Economics Spends more on a commodity than needed Consumes more of a commodity than needed Spends on needs of lower order, at the cost of meeting higher order needs Spends on non need commodities, commodities that do not contribute positively to the consumer's wellbeing
- 9. 則 Islam is a religion of moderation and opposes every form of excess and extremism. 則 A person who is immoderate in his personal and social life is most likely to be either immoderate or extreme in his religious views. 則 The religious or intellectual perception of an individual is deeply influenced by his own actions and behavior patterns. This Islamic Consumption Patterns Islamic Consumption Pattern Miserly Consumption Moderate Consumption Prodigally Consumption
- 10. 則 The consumption system in the Islamic economics contains a large number of consumption spending models between two thresholds. 則 First, a minimum of the spending that does not descend below the avarice threshold 則 Second, a maximum of the spending that does not exceed the excessiveness threshold. 則 This multiplicity of spending models will be reflected in the elasticities of the consumption spending by the disposable income or the budget spending. 則 The diversity of spending will be detailed in the next section to address the Islamic consumer model. There is an interval of admissible consumption corresponding to many consumption behaviors according to the layers of earning as indicated by Shaibani : Contd
- 11. There are many layers of earning, the amount that must be available for each one i.e. the subsistence level of living allowing to perform the religious duties. It is supposed that this level is expressed in a real amount, and what is needed to do the religious duties becomes a duty, if the individual will not earn more of that a real amount he is in that capacity 則 The layers of earning are arranged from imperative earning, recommended earning and the permissible earning, respectively. 則 The imperative earning concerns what meet the basic needs of the individual him/her self, his/her familial dependents and his/her parents through the kindest expenditure. These needs are related to food, clothing, housing, remedy, education and transportation means. The necessary earn helps to settle the previous licit debt, if any, and to make a possible saving effort by deferring a fraction of his/her consumption spending for the coming days. Contd
- 12. Balancing (rather than optimizing) as a key element in human decision making in all activities Need Fulfillment (rather than satisfaction of wants) as the main focus of economic activities The Proposed Features of IE The Garden of Knowledge and Virtue 12 The distinction of wants and desires needs to be established firmly on positive economic ground The maximization of satisfaction is justifiable as long as within the sharia boundaries (Yousri, 2013) Inconsistency terms of lust that synonymous over hedonistic behaviour, which is should be tamed, although it has been discouraged by Islam. There would always be a limit within which pursuit of lust would not conflict with the concept of balance required by reason and by social norms. To that extent conventional economics will remain valid. (Yousri, 2013)
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