Household life cycles and lifestyles in the United States

Household life cycles and lifestyles in the United States

0.00 Avg rating0 Votes
Article ID: iaor20061576
Country: United States
Volume: 43
Issue: 1
Start Page Number: 121
End Page Number: 132
Publication Date: Feb 2006
Journal: Journal of Marketing Research
Authors: ,
Keywords: markov processes
Abstract:

Household life cycle has been widely used as a determinant of consumer behavior and a basis for market segmentation. However, there is considerable disagreement about how life stages should be defined and how households progress through these stages. Existing studies use a priori definitions, which are tested on a cross-sectional survey of households collected at a single point in time and thus cannot reveal the real dynamics of the household life cycle. The Panel Study of Income Dynamics provides longitudinal data on household composition in the United States for a period of 34 years; the authors use this to identify empirically the most typical stages and paths that US households have followed since 1968. They develop a hidden Markov model in which the stages of the household life cycle are taken as latent, unobservable states that are uncovered from the manifest household demographic profiles over the 34 years, assuming that households evolve through these latent stages following a first-order Markov process. The authors apply their results to classify members of another panel (Consumer Expenditure Survey) into life stages, which enables them to study the impact of the household life cycle on households' budgetary allocations, providing a comprehensive analysis of lifestyles (through expenditure patterns) over the household life cycle.

Reviews

Required fields are marked *. Your email address will not be published.