The Effect of Income Changes on Consumer Choices

Abstract

The study examined how consumer income level changes and consumer income elasticity of demand influence the purchasing behaviour and the decision made by consumers in the context of the consumer choice theory. The primary data were collected using a structured questionnaire to 150 respondents in the Delhi NCR through the use of a quantitative, descriptive and exploratory research design and analysed using correlation techniques and regression methods in SPSS 27. The outcome shows that the changes in income are statistically significant in their affective purchasing behaviour (R = 0.379; R2 = 0.144; p < 0.05) and moderate in their positive relationship between income elasticity of demand and consumer choice decisions (r = 0.426; p < 0.01). The study establishes that changes in income levels have a significant impact on the consumption levels, savings habits and the decision-making processes. The study finds that the dynamics of income continue to be a key factor of utility maximization and market demand designations in a dynamic socio-economic setting.