What is the explanation for the factors affecting consumption?

Answer 1

There are many different factors that affect a consumers consumption. Taxes are one example. To a consumer who likes tp spend or "borrow" high taxes are bad because income falls reducing their tendency to spend. If a consumer is a saver then increase to taxes will likely increase their choice to save, being a saver and not so much a consumer.

Economic factors also affect consumer such as the stock market. Today we see S&P and NYSE lows around 1997 levels. This lack of "consumer confidence" causes a change in consumption. More specifically, there is a lack of consumption or a decrease in consumption because people are more incline to become savers seeing that their money is depreciating in the Stock Market. However stock market troubles are a person by person basis. One consumer may see a stagnant stock market as an opportunity to make a profit on low stocks. Their individual consumption may rise while other consumers consumption falls. However, the common consensus in a falling stock market like the one in today's recession is to hold onto money and stock consuming.