Expenditure patterns of older and younger consumers

The major purpose of this study was to find if significant differences exist in patterns of consumption expenditures between elderly and younger consumers in the United States. Cluster analysis was used to identify consumption patterns, and then multiple logit analysis was used to test the relationship between consumption patterns and socio-economic factors. The data were taken from the 1986 Consumer Expenditure Survey. The sample consisted of 1,717 households. Households were grouped into clusters on the basis of the proportion of total annual expenditure allocated to each of 17 consumption categories.The study found four different consumption patterns, which were designated: Homebound pattern, Shelter-dominated pattern, Service-using pattern, and Private-transportation-dominated pattern. Being over 65 was positively and total expenditure was negatively related to membership in the Homebound cluster. The elderly affluent, young middle-income, and young affluent were less likely than the young poor to belong to the Homebound cluster. Younger households were more likely to belong to the Shelter-dominated cluster compared with elderly households.In the Service-using cluster, younger age groups, except for age 25 to 34, were less likely to belong to the cluster than the elderly. Middle-income and affluent households were more likely to belong to the Service-using cluster than Poor households. Younger households with reference person age under 25 and 45 to 64 were more likely to belong to the Private-transportation-dominated cluster compared with elderly households. Compared with poor households, middle-income and affluent households were more likely to have the Private-transportation-dominated pattern.The findings of this study suggest that welfare policies for the elderly should not necessarily be uniform for all households in this group, but should be diversified to accommodate the different consumption patterns of the elderly.U of I OnlyETDs are only available to UIUC Users without author permissio