An Alternative Model of U.S. Clothing Expenditures: Application of Cointegration Techniques

In this paper, an Error Correction Mechanism model of U.S. clothing expenditures for the period 1929–1987 is estimated using recent developments in modeling nonstationary variables. Using clothing expenditures as an example, the pitfalls of conventional modeling of nonstationary variables and the advantages of a new modeling procedure that takes into account the properties of data for valid inference about population parameters are pointed out. The basic findings obtained by estimating an Error Correction Mechanism model of clothing expenditures are (1) the demand for clothing is income inelastic both in the short run and in the long run; (2) the price elasticity of demand is unitary in the long run but greater than unity in the short run; (3) an increase in the unemployment rate reduces U.S. clothing expenditures both in the short run and the long run; and (4) an increase in the number of elderly (above the age of 65) increases clothing expenditures in the short run and reduces expenditures in the long run. However, the shortrun impact of an increase in the elderly population on clothing expenditures is statistically insignificant.     

Impact of Married Women's Employment on Individual Household Member Expenditures for Clothing

Family member and per capita clothing expenditures are estimated via tobit, using 1980–1981 Consumer Expenditure Survey data. Occupation categories are developed and implicit wage rates imputed for each wife in the sample. Employed-wife households have higher expenditures for clothing than do nonemployed-wife households and wife's occupation differentially affects family member expenditures. Wife's implicit wage is not significant, while wife's unearned income has a positive impact on all categories of expenditures except for infants. These results indicate that it is not possible to generalize across family members about the influence of income and socio-demographic variables on clothing expenditures.     

The effect of phosphate detergent bans on consumer clothing expenditures

Metropolitan sales data from the 1977 Census of Retail Trade were analysed to test whether phosphate detergent bans increased consumer expenditure on clothing: positive effects were found for men's clothing and domestic fabrics (sheets and towels). In areas with medium water hardness the average annual cost in 1977 equalled $11·08 per household. For 1984, the equivalent cost was $14·17 per household. These results are consistent with laboratory studies that show decreased detergency associated with non-phosphate detergents and increased fabric wear associated with carbonate-built detergents, the principle substitute for phosphate detergents. The bans impose the largest cost on hard water areas. In both ban and non-ban areas in 1977 higher laundering costs were associated with higher water hardness. Analysis of 1972 data indicated that water hardness did not affect clothing expenditures significantly when detergents contained large amounts of phosphates.     

Household expenditure on poultry and seafood in the U.S.A. - a cross-sectional analysis

This study investigates the determinants of household expenditures on poultry and seafood using the 1992 Consumer Expenditure Survey. Higher income and larger households with a better-educated and older household head spend more on poultry, especially during the fourth quarter of the year, than others. Higher income and north-eastern households with a non-white and better-educated household head spend more on seafood than others. Poultry expenditures are more sensitive to changes in household size than to changes in household income. In contrast, seafood expenditures are more sensitive to changes in household income than to changes in household size.     

Presence of children and household food expenditures at home and away from home

Households with children spend more on food at home than do households without children. On the other hand, compared with households without children, households with children who are at least 12 years of age are associated with higher expenditures on food away from home expenditures. Households with employed spouses are associated with lower expenditures on food at home. Other determinants of expenditures on food at home are seasonality, house ownership, region, household size, education, age and income. House ownership, region, household size, race, education and income also affect expenditures on food away from home.     

The Allocation of Food Expenditure in Married‐ and Single‐Parent Families

Differences in food expenditures in married‐ and single‐parent families are examined using the Consumer Expenditure Survey Diary Component (1990–2003). Single parents, compared to married parents, allocate a greater share of their food budget to alcohol and food purchased away from home; conversely, they spend a smaller share of their food budget on vegetables and fruits. Compared to married parents, single fathers spend a greater share on alcohol and food purchased away from home and a lesser share on vegetables, fruits, meat and beans, desserts and snacks, and prepared foods. Single mothers, compared to married parents, spend a greater share on grains and nonalcoholic beverages and a lesser share on vegetables and alcohol. Single mothers and fathers differ from each other in almost all categories of food and beverage expenditure. We also find important differences based on the employment status of parents in the household: families where all parents are employed, irrespective of family structure, spend a greater share of their food budgets on food purchased away from home and a lesser share on vegetables, fruits, milk, and meat and beans compared with married‐couple families in which the mother is not employed. We discuss ways in which family structure and parental employment status may be associated with food purchasing decisions.     

The Influence of Children on Family Life Cycle Spending Behavior: Theory and Applications

This study examines the effect of children on family consumption decisions during different stages of the life cycle. An empirical model that incorporates both continuous measures of adult equivalence and a flexible functional form is used. Results indicate that durables, food eaten (purchased) away from home, and adult clothing are luxury goods for two-child families. Economies of scale are noted for food and shelter expenditures. Two-child families substitute out of expenditures for meals eaten away from home, adult clothing, and other goods and services to meet increased demand due to the children's presence.     

Secondary household production of food: the influence of home meal preparation on food expenditures and reported adequacy

A path model was tested to ascertain the relationships between certain socio-economic and demographic variables, the percentage of household meals prepared and eaten at home (secondary household production), food expenditures, and the household's reported adequacy of food consumed. Significant positive predictors of secondary household production of food were the age of the head and household size. Negative predictors were education of the head, income of the head(s) and number of hours worked by the household head(s). By far the most important predictor was the number of hours worked. The strongest predictor of food expenditures was household size. Other positive predictors were income of the head(s), number of household heads and the degree of urbanization. Negatively affecting food expenditures was secondary household production of food, indicating the ‘saving’ effect of preparing meals at home. The household's reported adequacy of their food was predicted by the positive effect of education of the head, age of the head, tenure, hours worked by the head(s) and number of household heads. Although the number of hours the heads are employed decreased the percentage of meals prepared at home, and the percentage of meals at home negatively affected expenditures, the number of employment hours had no effect on food expenditures.     

US aggregate demand for clothing and shoes: effects of non‐durable expenditures,price and demographic changes

The main objective of this study was to evaluate the effects of the changes in total non‐durables expenditures, prices and US demographics on demand for different clothing categories and shoes in a time‐series framework. The basis for the demand model was the almost ideal demand system model. Demographic variables included in the model were age distribution of US population (median age and variance) and proportion of non‐white population to the total US population. The results indicate that total non‐durable expenditures and price variables are significantly related to consumers’ non‐durable budget allocations for clothing categories and shoes. The results of the study also show that, among the demographic variables examined in the study, the median age and non‐white population were significant variables affecting US aggregate non‐durable expenditure allocation on men's and boy's clothing and shoes. All the demand elasticities with respect to total expenditures, own, cross‐price and demographics were also estimated.     

Determinants of Household Expenditures on Alcohol

This paper examines the determinants of household alcohol expenditures by using a nonnormal and heteroscedastic double-hurdle model to accommodate zero observations in the sample. The model is a generalization of the double-hurdle model estimated in previous studies of alcohol consumption. We also examine the effects of explanatory variables by calculating and decomposing the elasticities. Findings support the use of a more generalized error distribution. Income, region, education, and household demographics are among the significant determinants of alcohol expenditures.     

Do Promotions Increase Store Expenditures? A Descriptive Study of Household Shopping Behavior

An important question for retailers is whether promotions induce households to increase their in-store expenditures or merely reallocate a predetermined shopping budget. Should expenditures be fixed, retailers might decrease their profitability when running promotions by displacing expenditures from high margin to lower margin products. Using household level store receipts and an extended AIDS model, we provide evidence that while household expenditures do increase with promotions, there is also a significant reallocation of expenditures among the different categories. This implies that retailers have to choose carefully which products are promoted, if promotions are to increase profits.     

Analysis of tenure choice and housing expenditure patterns

This study employs a selectivity model to account for the simultaneity existing between determinations of tenure status and level of spending. Important socio-economic characteristics affecting housing tenure were identified. Results indicate that income had a more important effect on the housing expenditures of renters than owners at a lower household income level. The race of the household head had a significant effect on variations in housing expenditures for owners but not for renters, suggesting that race may be a more important factor in owner-occupant than in renter-occupant housing. While household size may be an important factor in a family's decision-making in terms of buying a home, it is suggested that once tenure status is selected family size had no significant impacts on housing expenditures. Similarly, married couples were most likely to own their own homes than were other household types; however, married households did not spend more or less than other types of households on either owned or rented accommodation. Furthermore, the analysis suggests that in assessing empirical results, attention should be given to meaningful interpretation of estimated selectivity effects as well as to testing for occurrence of selectivity bias.     

Wie beeinflusst der demografische Wandel die privaten Verkehrsausgaben?

The level as well as the structure of private consumption is influenced by the age structure of the population. This is shown for Germany by an age-specific analysis of consumption patterns on the basis of household data of the German consumer income and budget survey. According to the gained data and with respect to the changing shares of age cohorts induced by demographic effects, the demand for consumption goods and services in the field of transport will lose significance. This is especially true for private transport expenditures such as the purchase of cars as well as the demand for goods and services related to the use of cars. In contrast, the expenditures for (public) transport services are projected to be unchanged over the lifecycle of a private household.     

Book Reviews

This study examines whether the restaurant food expenditure patterns of two-earner Canadian households are consistent with a hypothesis that restaurant meals are convenience rather than luxury items. Results of the study indicate a positive relationship between the proportion of total food expenditures allocated to discretionary restaurant meals and the wage rates (value of time) of both the household head und spouse and a negative relationship between proportionate restaurant food expenditures and unearned income. Both results support the hypothesis. The study also examines relationships between proportionate restaurant food expenditures and a set of household characteristics variables.     

The impact of household life‐cycle stages on subjective well‐being: Considering the effect of household expenditures in Hungary

The household life‐cycle stage is a significant contributor to the perception of subjective well‐being; however, the effect of household expenditures of life‐cycles on subjective well‐being has not been thoroughly explored. The life‐course perspective, specifically the study of family/household life‐cycles, emphasizes the understanding of subjective well‐being across the entire life‐span. Accordingly, in the literature subjective well‐being is often studied at different life‐stages considering the influence of variables such as age, cohabitation and fertility. The present study evaluates the level of subjective well‐being across the various life‐cycle stages using a matching method on a Hungarian national sample. This approach is appropriate for studies using observational data because the administration of a true experimental design is usually not feasible for this type of research. The main finding of the article is that controlling for the expenditure structure significantly modifies the effect of life‐cycle on subjective well‐being, which is varied across life‐cycle stages and shown to be highly dependent on household expenditures.     

Social class: a multivariate analysis of its effect on expenditures for household services

Multivariate statistical techniques were used to explore two major conceptual issues in consumer behaviour research involving social class: (1) the importance of income, as compared to social class, in determining household behaviour, and (2) the effect of the status of wives on the behaviour of their households. A subsample of expenditure data, collected from 5,994 husband-wife families, as part of the 1973 Consumer Expenditure Survey, was used in the analysis. The dependent variable was expenditures for household services. The independent variables included total consumption expenditures (a proxy for income), the status of the wife, the status of the husband, family type, location, and characteristics of the dwelling. The results of an Ordinary Least Squares regression procedure demonstrated that total consumption expenditures were the most important variable in determining expenditures for household services. The size of the effect of the status of the wife was comparable to that of the status of the husband. In both cases, the effect was significant but small.     

The relationship between credit system of buying and background characteristics of teachers in Accra,Ghana

Abstract The main purpose of the study was to investigate the relationship between credit buying of clothing and background characteristics of teachers in primary and junior secondary schools in Accra, Ghana. Frequency and percentage distributions were used to analyse data collected from 180 respondents. The hypotheses that there were no relationships between credit buying of clothing and age, educational background, household size, religion, ethnicity, marital status and gender were tested using the chi–square statistic at the 5% level of significance. The majority (75.6%) bought clothing on credit. A total of 66.2% were women and 33.8% were men. The respondents used credit because of poor salaries, for convenience and to meet emergencies. Traders (44.4%) or traders and customers together (29.5%) decided on the terms of payment. The open-account (39.4%) or instalment credit (36.2%) plans were used to honour payments. A total of 67.8% honoured their terms of payment. The traditional Kente cloth and fabrics for ‘Ntama and Kaba’ (slit and blouse), the traditional outfit for women, were mostly bought on credit from hawkers (58.3%). Accessories, undergarments and cosmetics were also credited by 33.8%, 16.9% and 7.3% respectively. Credit buying increased the number of clothing items of 73.3% of the respondents. There was a significant relationship between credit buying and gender but not between credit buying and age, religion, ethnicity, educational level, household size or marital status. The researchers suggest that a comprehensive study be carried out using representative samples from the 10 regions of Ghana to give an overall picture of the credit system of buying clothing among teachers in Ghana. A study of why Ghanaian consumers buy goods on credit could be carried out to determine whether the reasons for buying goods other than clothing are the same or are different.     

The Impact of Retirement on Household Leisure Expenditures

Household leisure expenditures for retired and near‐retired households were examined in order to better understand the dynamics associated with the move to retirement status. Data from the 1995 Consumer Expenditure Survey indicated that retirement, total expenditures, and education had positive impacts on leisure expenditures. For retired households, greater total expenditures and education increased expenditures, while age and the presence of earned income decreased expenditures. For near‐retired households, greater total expenditures, education, and the presence of asset income significantly increased leisure expenditures.     

Engel curves and the unitary theory of the household

Previously unutilized household budget data are used to fit Engel curves to test Gary Becker's unitary theory of the household. If resources are fungible and are allocated to maximize a household utility function, the pattern of outlay should be invariant to control over and sources of income. The earnings of wives and Engel curves for food, rent, clothing, light and fuel, insurance and sundries are estimated using the two‐step method of Murphy and Topel. Although working wives contributed an average of 20% of household income, the coefficient of their earnings is not significant in every Engel curve estimated. It appears that Becker's altruist head of the household is the housewife/financial manager, at least in New York City in the early twentieth century.