One of the many attempts to explain Kuznets’ empirical findings regarding consumption patterns was by James Duesenberry’s (Income, Saving and the Theory of Consumer Behaviour. Cambridge, MA: Harvard University Press, 1949) work. Duesenberry introduced his Relative Income Hypothesis, a theoretical construction which similar to Veblen and Keynes was also characterised by a strong psychological and sociological dimension. This chapter starts with a discussion of Relative Income Hypothesis, and it will proceed with Duesenberry’s critique of the fundamental assumptions of mainstream demand theory. The main implications of Duesenberry’s hypothesis will also be considered. The chapter will finish with a presentation of Harvey Leibenstein’s ideas on social status and consumption, who was also working in the same conceptual framework as Duesenberry. There will also be a brief discussion of George Katona’s views who was placing emphasis on the psychological aspects of consumption decisions.