Conditioned Consumption Theory: A Study of Consumer Adaptation to Essential Commodity Price Hikes

This study proposes Conditioned Consumption Theory (CCT), a framework explaining how consumers psychologically adapt to sustained price hikes in essential, culturally rooted goods. Moving beyond traditional price elasticity models, CCT integrates economic, psychological, and cultural dimensions to describe a staged cycle: Rationalization → Budget adjustment → Substitution → Reconciliation → Conditioned acceptance. Using coconut oil consumption in Kerala as the core case, the study shows that even steep price increases are eventually normalized. Consumers temporarily shift to substitutes but return due to cultural attachment, loss aversion, and shifting reference prices. This Substitution–Reversal Principle also appears in sectors like fuel, LPG, electricity, food staples, and medicines, confirming broader applicability. CCT demonstrates that long-run acceptance occurs regardless of whether price hikes stem from natural scarcity or artificial market forces. The theory highlights a key policy concern: visible consumer acceptance may mask silent economic strain.