[1] It is part of the theory of consumption proposed by economist John Maynard Keynes.
The hypothesis was subject to further research in the 1960s and 70s, most notably by American economist James Tobin (1918–2002).
Keynes asserted that real consumption (i.e. adjusted for inflation) is a function of real disposable income, which is total income net of taxes.
This has led to the absolute income hypothesis falling out of favor as the consumption model of choice for economists.
His statement of the relationship between income and consumption was based on psychological law.