Abstract
Distinct characteristics of households play an important role in the decisions made regarding expenditures. This study identifies what specific characteristics of households drive the decisions to make specific purchases such as entertainment and apparel using the Consumer Expenditure Survey Data from the Bureau of Labor Statistics (BLS, 2018) for the years 2016-17. First, we follow the log-lin regression model methodology to identify if there are clear disparities in purchasing decisions based upon the gender of the head of household (HH) and then present sub-models to identify the determinants of expenditures on apparel and entertainment for a household based upon characteristics such as income of the household, age of the head of the household, family size, number of children below age five in the household, number of earners in the household, education of the head of the household, and race and ethnicity of the head of the household as our primary independent variables. Primary model results show that there are clear differences in the determinants of total expenditures based on the sex of the head of the household. Our sub-models show that male-headed households spend more on entertainment, whereas female-headed households spend more on apparel than their counterparts.
Highlights
There is a variety of identifiable factors from consumer feedback based on past purchasers that contribute to future sales within new and existing consumers of a certain product
We follow the log-lin regression model methodology to identify if there are clear disparities in purchasing decisions based upon the gender of the head of household (HH) and present sub-models to identify the determinants of expenditures on apparel and entertainment for a household based upon characteristics such as income of the household, age of the head of the household, family size, number of children below age five in the household, number of earners in the household, education of the head of the household, and race and ethnicity of the head of the household as our primary independent variables
Before we discuss the results of the models that we estimated using STATA 15.0, it would be interesting to study the fundamental differences between male-headed and female-headed households in terms of their total income levels and total expenditure levels, with special focus on entertainment and apparel expenditures
Summary
There is a variety of identifiable factors from consumer feedback based on past purchasers that contribute to future sales within new and existing consumers of a certain product. Thereafter, we create a general model of consumer behavior based on individual characteristics and demographics and include the entertainment and apparel expenditures of a household as separate factors from all other expenditures with a view to identifying what household characteristics contribute toward these purchases. The primary hypothesis for this paper is to identify whether factors such as consumer household/personal income, monthly household expenditures of the consumer, and other exogenous demographic and socio-economic factors impact purchasing decisions regarding consumption of specific products within households
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