Analysis of the Slutsky Equation as a Model of Islamic Consumer Behavior: A Theoretical and Conceptual Review

Abstract

The Slutsky Equation is a fundamental concept in microeconomic theory that explains how price changes affect demand through the substitution effect and the income effect. In conventional economics, this concept assumes that consumers behave rationally solely to maximize utility. However, from an Islamic economic perspective, consumption behavior is not only based on economic rationality but also considers moral, spiritual, and social values. This article aims to reanalyze the Slutsky Equation by examining its possible application in an Islamic consumer behavior model. This research uses a qualitative approach through a literature review of Marshallian and Hicksian theories and the basic principles of Islamic economics. The results of the analysis indicate that reinterpreting the Slutsky Equation in an Islamic context produces a more holistic model of consumer behavior, in which consumption decisions are driven by a balance between material satisfaction and the values ​​of blessing (barakah), justice, and welfare (maslahah). Thus, the Slutsky Equation can be developed as a theoretical foundation for an Islamic consumer behavior model that emphasizes the balance between economic efficiency and spiritual ethics.