Munich Personal RePEc Archive

Islamic Consumer Model, Fairness Behavior and Asymptotic Utility

Ghassan, Hassan B. (2015): Islamic Consumer Model, Fairness Behavior and Asymptotic Utility.

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Abstract

Islamic faith and the ethical dimensions of the individual and the community play a significant role in guiding economic behavior by connecting the worldly life to the hereafter. The Shariah-compliant faith and ethical values generate specific behavior that requires Halal earning, fairness in spending and Halal utility leading to materialistic satisfaction and metaphysic reward. To analyze the Muslim consumer utility, in addition to the Islamic economics heritage, we rely on the instruments and prevailing assumptions in economics. Shaibani’s (750-805 AD) analysis of earning/spending/utility is based on three successive layers of earning/spending/utility; namely, the imperative, recommended, and the permissible. In this paper, we firstly contribute to developing a measure of the overspending and underspending. Secondly, based on the social solidarity, we show that the marginal earning has an effect on the macro MPC and depends mostly on the first differences between the MPC of the lower and upper social groups. Thirdly, according to the social welfare function, the permissible marginal utility is related to the faith interaction driving to an efficient transfer of purchasing capabilities to the targeted group. The optimal faithful behavior of affluent group leads, in the worldly life, to an elasticity of marginal utility less than or equal to one. The belief holding produces a hidden support in the worldly life but also engenders hereafter rewards through a steady eternal utility function, which generates an optimum of the marginal utility with elasticity greater than one.

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