Impacts of Income Fluctuations on Resource Consumption

Yearly net remuneration has risen by around 56 percent since 1991. In the last few years this rise in income has been accompanied by a rise in consumption by private households. However, every consumption decision, be it about the purchase of goods or services, impacts the environment and potentially requires resources such as fossil fuels, mineral resources, and land. Empirical studies of German households’ appliances, furnishings, and facilities points to their consumption patterns leading to high resource consumption. Thus far, however, there have been no studies on the impacts of income levels or income fluctuations on resource consumption.

This was the starting point for the project "Impacts of Income Fluctuations on Resource Consumption". In collaboration with two partners, adelphi analysed the influence of income levels and changes in income on the scope and composition of consumer spending. For this purpose, a cross-sectional analysis based on data provided by the German Federal Statistical Office was complemented by the execution of an inter-temporal longitudinal study using GfK Consumer Panel data as its foundation. In addition, the analysis also took income fluctuations, further socio-demographic characteristics such as age, place of residence (urban or rural), and various lifestyles into account. On that basis, resource consumption induced by changes in consumer activities was calculated. In a further step, the statistical analyses was supplemented by original primary data collection.

In addition, scenario-based projections of resource usage contingent on changes in consumption structures was used to gain insights on the consequences of increasing levels of income on resource consumption in Germany.