Life Cost: A New Hypothesis for the Consumption Function Theory

It is believed that life cost expenditure and revenue marginal equilibrium is the basic rule for human beings' living activities. Money (wage) is the revenue from the expenditure of life cost. And different consumers pay different life cost for same income. Basing on this thought,the article brings forward the life cost hypothesis,based on which a new consumption function is established and the consumer equilibrium formula is endowed new connotation. The conclusion of this article is: the crucial affected factor for consumption expenditure is not the income level of consumer,but is related to the life cost expenditure differences for gaining a certain income,i. e. the difficulty of gaining income,which accordingly proves that low wage is the important reason for the low consumption rate of some countries.