Test of Keynesian Consumption Function: A Case Study of University of the Punjab

The purpose of this research paper is to test the Keynes consumption function among the students of University of the Punjab. A Survey is conducted among the students of University of the Punjab.In this research the roles of consumption in economic growth in short run to determine aggregate demand in the economy is discussed. The marginal propensity to consume (MPC) is also define as an empirical metric that quantifies induced consumption, the concept that the increase in personal consumer spending (consumption) that occurs with an increase in disposable income (income after taxes and transfers).A large amount of material has therefore been written regarding the consumption function, many macro-economic policies rely on ability to influence the aggregate demand in the economy without directly increasing government expenditure. The questionnaire included questions related to the consumption pattern of the students like monthly pocket money, monthly consumption and savings etc. The Guardian income and occupation is also included in the survey. The survey shows that two postulates of Keynes hold true for the students of university of the Punjab.