A Consumer Model and Social Welfare Based on the Writings of Shibani (750-805 AD, 131-189 AH)

Ghassan, Hassan B. (2015): A Consumer Model and Social Welfare Based on the Writings of Shibani (750-805 AD, 131-189 AH). Published in: PSL Quarterly Review , Vol. 69, No. 278 (2016): pp. 235-266.

Abstract

The novelty of Shibani’s earning model is its integration of Zakat and other social giving in the social welfare function, which makes the consumer utility a multi-dimensional devotional, material, ethical, social, and Shariah-compliant function. In the model, the consumer’s income evolves increasingly from imperative earning that covers the consumer’s basic needs to recommended earning that covers the basic needs of relatives; and to permissible earning that covers the poor’s needs. Accordingly, the model has imperative, recommended, and permissible utility. The rich consumer draws additional utility from Zakat spending in favor of the poor consumers. Based on social solidarity, we show that the marginal earning depends on the first difference between the MPC of lower and upper social groups. The permissible marginal utility is related to the faith interaction and enhances the social utility as social transfer is paid to poor and needy groups.

https://doi.org/10.13133/2037-3643_69.278_2 https://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/13702

• Item Type: MPRA Paper
• Language: English
• Keywords: consumer, faith, Zakah, imperative, recommended, permissible, earning, spending, utility.
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics; D - Microeconomics > D6 - Welfare Economics; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty; P - Economic Systems > P4 - Other Economic Systems > P46 - Consumer Economics ; Health ; Education and Training ; Welfare, Income, Wealth, and Poverty

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