Theory, Economics, Measurement, and the Principle of Relative Constancy

This article discusses the theoretical problems posed by the Principle of Relative Constancy (PRC). We argue that the PRC suffers from imprecision in definition of terms, measurement problems, and a failure to adequately meet the purposes of theory. We also argue that despite the PRC's important contributions to media economics research, existing economic theories and models are more useful in explaining consumer spending.