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The value of household life cycle variables in consumer expenditure research: An empirical examination
Author(s) -
Putler Daniel S.,
Li Tieshan,
Liu Yong
Publication year - 2007
Publication title -
canadian journal of administrative sciences / revue canadienne des sciences de l'administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.347
H-Index - 48
eISSN - 1936-4490
pISSN - 0825-0383
DOI - 10.1002/cjas.36
Subject(s) - socioeconomic status , value (mathematics) , econometrics , set (abstract data type) , empirical research , economics , variables , life cycle hypothesis , statistics , demography , mathematics , computer science , sociology , population , macroeconomics , programming language
Abstract We examine why studies reach contradictory conclusions concerning the value of the household life cycle model as a predictive tool in consumer expenditure research. Using a database of roughly 14,000 Canadian households, we find that household life cycle variables do not generally enhance prediction over a more parsimonious model containing a basic set of socioeconomic and demographic variables, even when comparing less aggregated to more aggregated expenditure categories. However, they do enhance prediction for categories that are defined such that the typical users of the category fall into a fairly narrow age range. The theoretical and applied significance of our findings are discussed and directions for future research are offered. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.