##  [Permanent Income Hypothesis](/index.php/permanent-income-hypothesis) 

  ##  [Permanent Income Hypothesis](https://social.quantumdictionary.io/permanent-income-hypothesis-0) 

  

 [![Social Sciences Dictionary](/sites/default/files/styles/large/public/2026-01/Social%20Sciences.png.webp?itok=FFG6NW1n)](/index.php/topic-specific-dictionaries/social-sciences)



**Social Sciences Dictionary**

 







 

 

 

 



 

 

 

 

Definition

A consumption theory that posits individuals choose current consumption based on expected long-run average ('permanent') income rather than short-term fluctuations; transitory income changes are largely saved, while changes perceived as permanent shift consumption proportionally to the change in expected lifetime income.