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Series A (General), Vol. 138, No. 4 (1975), pp. 504-530 Published by: Wiley for the Royal Statistical Society Stable URL: http://www.jstor.org/stable/2345213 . Accessed: 24/05/2013 09:05
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J. R. Statist. Soc. A,
(1975), 138, Part 4, p. 504
Determinants of Expenditure on Consumer Durables
By J. F. PICKERINGtand B. C. ISHERWOOD
SUMMARY fromsurveys of a sample of 386 households Information was used to investigate theextent to which information on theattitudes, expectations and socio-economic statusof thosehouseholds could be used to predict their on consumer of means, expenditures durables. Tests using difference discriminant and multiple wereused. The discriminant analysis regression achieved and it was arguedthatit analysis highclassificatory performance to predict a household whether willdecideto make maybe moreimportant to predict ofa consumer thanto attempt a purchase durable at all rather the once a purchase has been decidedupon. A actual level of expenditure of variables werefoundto have predictive acrossthe number significance of analysis carried out. Manyof thesewereconcerned different types with thatattention consumer attitudes and expectations and it was suggested to obtaining indications of expected shouldbe paid particularly household to devote financial to thepurchase and thewillingness resources of liquidity consumer durables.
Keywords: ATTITUDE SURVEYS; FORECASTING; DEMAND;
CONSUMER CONFIDENCE; CONSUMER DURABLES; DISCRIMINANT ANALYSIS; MULTIPLE REGRESSION ANALYSIS; PRINCIPAL COMPONENTS ANALYSIS AND SCORES 1. INTRODUCTION
and otherhousehold IT has been argued that householdpurchasesof motor-cars
durablessuch as electrical consumer and appliancesare influenced by the attitudes of consumers as wellas by morereadily identifiable economic influences expectations it has been claimedthat such as incomes, prices,etc. (Katona, 1960). Furthermore, and expectations are measurable and thatrelevant in suchattitudes informachanges consumer tion can be collectedby means of regular surveys.In an earlierpaper we of thecontributions in thisarea and made suggestions some of thefeatures discussed to thetechniques and refinements used forthe construction forextensions normally confidence et al., 1973). of an indexof consumer (Pickering which indicatesthat measures of consumer There is an extensiveliterature do have predictive confidence powerin timeseriesforecasting equationsbutattempts that such information has a contribution to make in explaining to demonstrate variationsin consumerdurable purchasingbehaviour on a cross-sectional basis have been less successful,:althougha recentAmericanstudyis more encouraging in thisrespect (Dunkelberg, 1972).
address:Department of Management Sciences, UMIST, Sackville St, P.O. Box 88, t Present Manchester. information ofexpectational suchas buying intentions or purchase types probabilities t Other are normally held to have significant cross-sectional and explanatory power (see Pickering Isherwood, 1974).
This content downloaded from 188.8.131.52 on Fri, 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions
bothin combifromthe measuresof willingness nationwithand distinct to purchase. As was to be expected.a responserate of 73 per cent. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions . It is possible that theremay have been a systematic but were not difference betweenthe 50 who completedthe postal questionnaire and the 56 who.t a muchhigher levelofexpenditure on durables and a smaller Thisrevealed proportion of respondents reported thattheyhad not made any purchases. The actual distrilevels butionsof expenditure are set out in Table 1. on subsequent therelation between a particular setofvariables it does not behaviour. The data on whichthisanalysisis based are derived from of a sampleof surveys 386 households.and 14-month respondents stages but the otherrespondents different on each occasion. 14-month buyer behaviour maybe a function of differences we have not foundanyevidence thatthisis substantially thecase and in thisanalysis shall assume that observeddifferences in the influences on buyingbehaviourarise fromthe effect of the different timeperiods over whichthe analysisis conducted. taperecorder. dishwasher. fridge/deep freeze. usedcar. havingbeen personally personally re-interviewed re-interviewed. provides followedup on each occasion Although the numberof respondents successfully was more or less identical. thatis his ability to makedurablepurchases.1975] . caravan.the membership of the two groups of re-interview respondents varied by just under 25 per cent. 1972. spindryer. are failedto complete thepostalfollow-up. colour television. floorpolisher.therespondents personallyre-interviewed and 282 interviews were completed. cooker. new car. This content downloaded from 117.deep freeze.211. However.and then any difference in thesamples. The information on expenditure thedependent variablesin thisanalysis. t The goods were: black and whitetelevision. Information was providedby 226 were at both the 4.centralheating. Clearlyif some dynamicanalysiswere to be attempted it would be necessary to ensurethatinformation relatedto the same periodof time in thispaperis essentially in thatit analyses forall respondents. The sample was initially interviewed in two batches in on ability February and May 1971 and it is information and willingness to purchase derived from thesesurveys thatconstitutes theindependent variables forthisanalysis.Expenditure PICKERING AND ISHERWOOD on Consumer Durables 505 of testsfrom In thispaper we shallreport theresults interviews and re-interviews of a sample of Britishhouseholds. thatis in Juneand September 1971. As theanalysis static. refrigerator.88.vacuum cleaner. We shall also consider thecontribution of information regarding thesocio-economic statusoftherespondent.drawnfrom50 different areas of Britainwiththe higherincome groups over-represented. on attitudes [Thismeansthatourinformation and behaviour is related to twoslightly different periods of time. record player. number of purchases of durable onlya limited goods had been made withinthe 4 monthsallowed and in order to increasethe of respondents a purchase it was decidedalso to conducta postal proportion making thatis in Apriland July were after 14 months. seeminadmissible to add the two groupsof respondents together. A totalof 276 replies follow-up which asked respondents receivedto the postal questionnaire to check a list of and to durablegoods and indicatewhichtheyhad purchasedand in whichmonths say whatthelevelof their totalexpenditures had been on thedurablegoods listed.whichindicatethat psychological measuresof consumer attitudes and expectations do help to explainvariations in the recorded of those households over a 14-month expenditures period. Following American practice weshalldescribe these as measures ofthewillingness tomakedurable purchases. washing machine.66 on Fri.If thisis thecase and iftheir differences so strong of the226 respondents thatwerecommon thattheyoutweigh theinfluence to both surveys in the patternof resultsobtainedfor 4. furniture.]Some 4 months after were theinitialinterviews.
300.and 14-month analysis.2.In our laterresearch we have outlays netoftrade-in allowances bothfigures collected expenditure figures though havetheir advantages and drawbacks. For the14-month period.88. 120 purchases werereported The distribution of the actual outlaysfor both periodsis set out in Table 1. sincetheinfluence of attitudes on expenditure has been shownin time seriesequationsto producea best fitwhena lag of one or two quarters is allowed between themeasurement of theattitude and its reflection in thelevelof expenditure (Mueller.t respondents 1. 1965) we would not necessarily expecttherole of consumer attitudes in explaining behaviour to be thesameforboththe4.500 501. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions .1963. They are mostly discrete. Adams. In thecase ofnewcarpurchases in manycases sincea trade-in allowanceis often received. mean expenditure per purchaser?437. t Thesecolumns Variables 1. of respondents 14 months No. In all.200 201.506 .400 401.501+ No.100 101.theequivalent figures penditure per product ?242. This content downloaded from 117. 75 per cent.750 751-1. TABLE 1 data on expenditure Summary levels Frequencies 4 months Expenditure (?) 0 1.1.500 1. In particular. mean for all ?327 and median?137. For the 4-monthdata the mean the highestrecordedexpenditure was ?195 and themeanexpenditure expenditure perproduct perrespondent (of those of all respondents was ?83 and buying anydurable)was ?259. The Dependent at least one purchase In the4-month period 32 per centof respondents reported from thelistof 18 durablegoods and overthe 14-month periodtheproportion was in 4 months and 373 in 14 months. consisting are recorded this overstates actualconsumer t Outlays gross.192for14 months was ?23.66 on Fri.211. The and ?90. of respondents 68 53 46 19 15 16 16 17 18 8 276 % of respondentst 25 19 17 7 5 6 6 6 7 3 % of respondentst 68 17 4 1 2 1 1 2 2 0 192 49 12 4 7 3 4 5 6 0 Total 282 do not sumto 100 due to rounding off.348for4 months and totalcost of thepurchases was ?3.300 301. The meanexpenditure were:meanexthemedianwas zero.001-1. The Independent Variables A wide rangeof socio-economic and psychological information collectedduring constitutes the independent variablesfor the the initialpersonalinterview surveys of scoreson 7 point purposesof thisanalysis.000 1.Expenditureon Consumer Durables AND ISHERWOOD PICKERING [Part 4.
tThese are described in Table 2 together withmeanvaluesforbuyers and non-buyers on all variables. III and V are moreconcerned considerations withdurablepurchasing and possibleconstraints on thisand components VI. First.The 0: 1 splitform differences and non-buyers buyers ofthedependent between variabledistinguishing and buyers is considered non-buyers in a multivariate analysisusingdiscriminant analysis. Components I and IV tend to emphasizegeneralquestionsof economicconfidence. Whilethecodingof mostvariablesis fairly obviousand in keeping withthatcommonly used in otherinvestigations.where information on thelikely size ofthecoeffithere is no prior with indication oftheplausibility cients and thesignon theestimated is a critical parameters oftheresults. Statistical Techniques Threeforms of statistical analysisare used in thepaper.211.We concentrated as theywereshownto meetthoseparticular first criteria. forthecase of two groups. especially analysis thissortofdata. 1973) that principalcomponents (Pickering a useful an meansof summarizing thedata in orderto construct analysiscould form index of consumerconfidence the multivariate and multidimensional that reflected of interpretability fieldof consumerbehaviourand that criteria and psychological meansof assessing whether a particular reproducibility wererelevant was component in our earlierpaper upon the attention usefulin thisconnection.Expenditureon Consumer Durables PICKERING AND ISHERWOOD 507 in Pickering semantic differential attitudinal scales (described et al. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions . We now use 24 attitude t In theearlier paperresults using23 attitude scales. This technique.AS 22 was theone notincluded in theearlier paper.a univariate testof of meansbetween is reported.is formally an ordinary least squares regression equivalentto applying procedureto an equation whichhas a dichotomousdependent variablebut offers werereported scales. components II. 1973).3. The variables OPT 1-8 are therefore individual scorescalculated on each ofthefirst respondent eight principal components.In interpreting ofregression theresults.88..Of course. This content downloaded from 117.the of the principalcomponent questionof the reproducibility structure does not arise so for the purposesof this cross-sectional our demandsneed not be investigation in a timeseriesappraisal.The reasonforitsprevious exclusion wasthatthewording wasfor experimental purposes overthefour slightly changed surveys reported there.. two principal components the combinationof variablesin principal It is also usefulto investigate whether form ofcomponent components and thecalculation scoresforindividual respondents has any cross-sectional explanatory power. VII and VIII have rathermore of a generalfinancial orientation. The first verysimilar the basis of the indexconstruction in the earlierpaper.principal of thesevariablesand coded answers component to otherexpectations combinations and questionsregarding the social and financial and his positionof the respondent household. it is necessary ofthecodingoftheanswers to bearin mindthedirection to thevariousquestions. itseemed theinformation in either Although itwas collected wouldbe similar. when all respondents are combinedin one analysis.66 on Fri. The keyvariablesand theirloadingson each of thesecomponents (whichbetween themaccountfor 65 per cent of the variancein the attitude scales) are set out in to thosewhichformed two components are clearly AppendixI. Further consideration leads us to concludethatit is and important justifiable to includeit in thisanalysisdespitethe slightdifference in wording between thesurveys. formulation of the matter judged wiserto excludeit. as would be required quite as strict 1.1975] . thecodingon thesemantic differential a favourable to an unfavourable scales does not go in all cases from pole of thescales was variedin orderto attempt or vice versasincethedirection to avoid bias. response We have argued previously et al.
4 4-4 40 4-1 39 3-1 3.66 on Fri.211. PICKERING AND ISHERWOOD on Consumer TABLE 2 usedin theanalysis with coding usedandmean Listing ofindependent variables together and non-buyers values for buyers Mean values 14 month Description Variable 4 month NonNonBuyersbuyers Buyersbuyers and expectational variables (a) Attitudinal we as a family are better offthanwe 3-4 AS 1 Financially werea yearago/ thanwe we as a family arelesswelloff Financially werea yearago off 3-1 we as a family AS 2 Financially expectto be better nextyearthanwe are now/ Financially we as a family expectto be worseoff nextyearthanwe are now look good forthe 2-5 AS 3 My employment opportunities nextyear/ do not look good My employment opportunities forthenextyear Over the next3-5 yearsmy employment AS 4 oppor. sharesand unittrusts AS 11 Thereis a majordurable good I wouldliketo buy 3.2-7 tunities look good/ Over the next 3-5 yearsmy employment opportunities do notlook good There are now good prospectsof continuous 4-7 AS 5 in thiscountry/ economic progress are not good at Prospects foreconomicprogress time thepresent The development of the economyis likelyto be 4-5 AS 6 favourable overthenextyear/ to us as a family oftheeconomy is notlikely to be The development overthenextyear favourable to us as a family of the economyis likelyto be 4-2 AS7 The development favourable over thenext3-5 to us as a family years/ oftheeconomy is notlikely to be The development favourable to us as a family over thenext3-5 years This is now a good timeto makemajorpurchases 3-5 AS 8 of durable goods/ This is not a good timeto makemajorpurchases of durable goods to buildup savings/ 3-2 AS 9 Thisis nowa good timeto try Thisis nota good time to try to buildup savings AS 10 This is now a good timeto buystocks.4 4.2 30 3-6 3-8 2-7 3-2 3-3 2-2 2-8 35 2-3 30 4*9 4.2 3-6 4-6 3-6 4-2 4-2 39 4-1 This content downloaded from 117.9 3. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions .5 in thenext12 months/ There are no additionalmajor durablegoods I wouldliketo buyin thenext12 months AS 12 Thereis a majordurablegood thatI already own 3 9 thatI expect to replacein thenext12 months/ I do notexpect I own to replace anyofthedurables in thenexttwelve months AS 13 of durablegoods wouldbe affected 4-2 My purchases increase by a temporary in income/ 4. sharesand 4 0 unittrusts/ This is not a good timeto buystocks.88.7 3-2 4-2 3-5 40 3d1 4-1 3.Expenditure Durables [Part4.508 .7 4-6 4-6 4.
66 on Fri.3 40 3-6 4-2 39 3-0 3-2 35 2-7 3-4 50 4-7 .20 of AS 1-24 component Actualrespondent scoreson thesecondprincipal 07 .03 *08 This content downloaded from 117.87 4-8 09 Actual respondent scores on the first 95 principal.Expenditureon Consumer Durables PICKERING AND ISHERWOOD 509 TABLE 2 (cont.) Mean values 14 month Description Variable 4 month NonNonBuyersbuyers Buyersbuyers AS 14 AS 15 AS 16 AS 17 AS 18 AS 19 AS 20 AS 21 AS 22 AS 23 AS 24 OPT 1 OPT 2 OPT 3 OPT 4 OPT 5 OPT 6 My purchasesof durable goods would not be affected by a temporary increase in income My purchases of durablegoods wouldbe affected 3 9 by a temporary decrease in income/ My purchasesof durable goods would not be affected by a temporary decrease in income Pricesalwaysrisefaster thanwages/ 3-5 Pricesalwaysrisemoreslowly thanwages Pricesof mostgoods are rising/ 2-8 Pricesseemto be pretty stableat thepresent time I wantto buy 3-7 Becauseprices ofthemajordurables I oughtto buyquickly/ are rising There is no needto rush intopurchases justbecause pricesare rising offoodstuffs I have 3-4 Becauseprices and other things I am less to buyand spendmoney on are rising able to buythedurablegoodsI wouldlike/ The priceof foodstuffs and otherthings I have to buy have no effect on my abilityto buy the I wouldlike durables If I saw a majordurablethatI wantoffered at a 3f7 reduced specially priceI wouldbuyit now/ Pricereductions wouldnotencourage me to buya durable time good at thepresent I expect to buymoredurablegoods in thenext12 3f6 months thanI have done in thelastyear/ I do not expectto buy as manydurablegoods in thenext12 months as in thelast year We are currently savingup to buy a particular 3-4 majordurable/ We are not savingup to buyany particular good at thepresent time I couldafford I wanted 3 0 to payforanydurable item from mysavings/ I couldnotafford to payforanydurable purchases from mysavings I expectmyfinancial to increase in 3-1 commitments thenextyearor two/ I expect in the myfinancial commitments to decline nextyearor two As a country we are doingwellat themoment/ 4 5 so wellat themoment As a country wearenotdoing 4-4 3-6 441 3-7 2-8 3-6 3d1 2-3 3-4 341 2-4 441 3-2 341 3-4 4f3 3-6 39 4f3 3f7 4.88. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions .1975] .25 of AS 1-24 component Actual respondent scores on the thirdprincipal *16 *14 of AS 1-24 component Actualrespondent scoreson the fourth *26 principal-*12 of AS 1-24 component Actual respondent scores on the fifth principal.211.05 -*29 of AS 1-24 component Actual respondent scores on the sixthprincipal 04 -*02 of AS 1-24 component *37 -17 .25 -*16 *11 00 *24 -13 .
C1 2.7 3-1 1.88.9 2-8 3. No 2 1-8 3-0 3-6 3-1 1.cash sumsrising Is thisamount (in A VS) moreor less than youhad 1-9 at thesametime availableto spend lastyear? Less 1.) Mean values 14 month Description OPT 7 OPT 8 AVS ASC ES ESC HPAT Variable 4 month NonNonBuyersbuyers Buyersbuyers 03 07 -*18 .7 1. 25-34 2 35-44 3. same.cash sumsrising Is this orlessthan amount (inES) more youexpected 1 8 at thesametime lastyear? to spend Less 1. same.9 3.5 2-9 1.don'tknow2.04 1. more3 How muchdo you expectto spend(on consumer 4-6 in thenext12 months? durables) from 1-12 Coded.9 50 1.66 on Fri.510 . No.211.9 3. 45-64 4 Number NP ofpeoplein thehousehold actualnumbers BEDS Number in house ofbedrooms actualnumber Areyoulikely to move in thenext12 months? MOVE Yes 1.9 2-9 *02 *02 3-3 2-0 3.3 2-1 3d1 3.9 1-2 5*0 1*2 4. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions . Rent2. C2 3.Expenditure PICKERING AND ISHERWOOD on Consumer Durables [Part 4. TABLE 2 (cont.749 1 2 750.9 3*3 5-6 17 2-4 1*7 30 1*7 status variables (b) Socio-economic OG Occupational grouping ofHoH AB 1.don'tknow2.999 2-1 3-2 2-9 2-9 1. Other3 Totalhousehold INC income. Don't know2 How longhaveyoulivedin this NY ? house/flat less than1 year 1 2 1-2 years 3-5 years 3 6-10 years 4 11-20years 5 over20 years 6 Do youownthishouse/flat or areyourenting it? OWN Own 1. pre tax ? 0.5 This content downloaded from 117.9 2-1 2-1 2-0 2-6 *01 *03 4-5 1.9 2*0 2-9 Actualrespondent scoreson theseventh principal component of AS 1-24 scoreson the eighth Actualrespondent principal of AS 1-24 component SIMP SGET do youexpectto haveavailableto spend 3-8 How much in thenext12 months? (on consumer durables) from 1-12 Coded.9 3.4 1P2 4-8 1-2 3. more3 isyour tousing What attitude hirepurchase yourself? 2-8 wouldnotuse on principle1 2 never neededto use haveused butdon'tneed 3 4 useful and don'tmind splendid thing forme 5 Wouldyou indicate how important regular saving 1V9 is toyou scale of importance 0-10 Do youhavea savings target year? 1 6 forthecoming Yes 1. DE 4 A Age ofHoH 16-24 1.
No 2 *82 Does thehousehold possessa car Not owned0. owned1 car *16 Does thehousehold possessa second Not owned0.000-7. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions . differential of the semantic For a detaileddescription (1973).88.500-9. No 2 1V8 University? Didyou (HoH) attend Yes 1.1975] . scales see Pickering et al."agreeslightly". to thesecondstatement over ?30. byyourwife overtime or extrahard? byworking Yes 1. No 2 80 are yourtotalsavings? howmuch Approximately ? Nil 1-24 25-49 50. 505) in thehousehold (from maximum possiblewas 17 actualnumber. e.g.999 3.) TABLE Mean values 14 month Description ? Variable 4 month NonNonBuyersbuyers Buyersbuyers INCY UNIV CHILD PE CAR 1 CAR 2 CTV TOTG HP STOT and temporarily be readily 15 income Can your family or goingoutto work increased."agreestrongly". No 2 of your 1V4 for theprivateeducation Are you paying at themoment? children Yes 1.000-4."agreeslightly". It was suggested they as itemscosting weredescribed Major durables machines as well as major washing would includenew and used cars.999 10.500-1.refrigerators. Yes 1 durable items 7-4 Measureoftotalnumber ofconsumer listin footnote on p.74 75-99 100-149 150-249 250-499 500-999 1 2 3 4 5 6 7 8 9 1. ineachpairto 7 forstrong agreement to thefirst statement 1 forstrong agreement from in each pair.000 or more 3 4 5 6 7 8 9 10 1V5 1-6 1-6 1V8 1P4 1P2 *65 *14 1-8 1V2 1-5 79 *23 *14 1V8 1V3 1-5 *74 *11 07 6-7 1-4 8-1 07 70 1P4 7-8 7-4 1P5 79 1.Expenditureon Consumer Durables AND ISHERWOOD PICKERING 511 2 (cont. owned1 ? television havea colour *10 Does thehousehold No 0.000-1.999 2.999 5.66 on Fri. equally".000and over 10 boxes answer scaleswith differential weresetout as 7 pointsemantic Notes: The AS variables or both "agreewithneither as "agreestrongly". 1P5 outstanding? Do youhaveanyhire purchase Yes 1.500-2. The codingin each case ranged "agree".499 1. described "agree".000-2. No 2 ? 1V2 Do youhaveanychildren Yes 1..499 2.499 7. This content downloaded from 117. houseimprovements.211.
4 months behaviour and thatrelating buyer first in the14-month thisis considered was observed of expenditures period range detail. The relative an indication Thatis.1. correlations where 16 per centof thevariance in thatone variable explained it wouldonlyindicate of ofgroups intoa fairly small number It willbe observed break down another.66 on Fri.512 PICKERING AND ISHERWOOD - Durables [Part4. analysis ofdiscriminant to theapplication distriarenotnormally that theerrors variable ensures ofthedependent thenature is meansthatthere rather thanregression analysis a discriminant buted. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions . they it is of exists with eachother. is little thatonevariable and there maybe danger notseemto be a majorproblem itis highly correlated with another.211. fordiscrete correlations to report itis notcorrect t Strictly speaking pairs between association in thequestion there is meaningful whether hereis merely Our interest guidance on that to giveinaccurate foundare unlikely and thelevelsof correlation of variables question. as it wouldbe in OLS regression.Where that are correlated multicollinearity variables itdoes is unimportant onevariable to conclude that justbecause course notlegitimate is that setifitis highly correlated with another variable notappear in theregression does situation In thepresent in themultivariate multicollinearity selected analysis. becomes between twovariables at which level correlation It is noteasyto be sure of alternative also to depend uponthenumber thisis likely and indeed important. because overlooked to between information in therestof thepaperis divided relating The analysis As a greater to 14 month purchasing. their relative sizesprovide to explain procedures usesstandard leastsquares multiple regression third analysis recorded in theactualexpenditure levels byrespondents. overall residual the in ourcaseas a means ofappraising which is useful procedure built-in allocative successfully collected topredict hasbeen information ofthevariables on which ability of durable goodsin the werebuyers or non-buyers whether individual respondents from this analysis obtained coefficients Thediscriminant under consideration. variations ofmultivariate theresults we needto have analysis Whenwe cometo interpret inthedata. between and Non-buyers 2. regression to Beta coefficients as similar maybe interpreted of their importance.This socio-economic status and information abouttherespondent's information dataprovides ofattitudinal that thecollection confirms theview certainly of position influenced bythesocio-economic that uponor largely is notdependent therespondent. ANALYSIS OF 14-MONTH EXPENDITURES to distinguish to use all thevariables in theanalysis was to attempt A first stage that had purchased and those had made that those anydurable between respondents or dichotomous variables. theamount ofvariance andhence within eachvariable available categories response II setsoutinstances ofanother.Further. of at least*4havebeenrecorded. Expenditure on Consumer is nota bar lack ofhomoscedasticity in thatthemodel's overthelatter advantages Also. andin slightly greater 2. however. Discrimination Buyers This content downloaded from 117. and using on thebasisoftheir coefficients "significance" to particular to accord no temptation basedon thereduction inthe is appropriate is theF test only test which tvalues-the has a analysis technique thediscriminant sumof squares. period in a multiple analysis.t In general thelevel of ofmulticollinearity someclear ideaofthedegree that there is noticeable is lowanditis particularly between thevariables correlation or expectational dataon theonehand between attitudinal correlation no substantial on theother. in terms Appendix has to explain that onevariable Evenat thislevel.88.
t The discriminant This content downloaded from 117. at least wherethe savingis not forthe purchaseof a specific durable. Buyers reported higher and expected to spendlargersums. AS 19. AS3. and they confidence in thecountry's economic levelsof moneyavailableto spendon durables performance. OPT 7. CAR 1. theresults of which are givenin Table 4 parts(a) and (b) wherethe patterns of hitsand missesare set outtogether with thescaleddiscriminant coefficients forthemostsignificant variables.t coefficients arescaledbythesquarerootofthevariance-covariance matrix. TOTG at 10per centlevelbutnotat 5 per cent Significant AS 21. Theyweremorelikely to own a car and to possessalreadya larger number of durables. SIMP.211. In Table 3 are listedthosevariablesforwhichthe differences at the5 or 10 percentlevelas are significant squaresbetween and non-buyers buyers discriminant thisconstitutes a basis forour subsequent analysis. AS4. AS22. use their to thesocio-economic Turning characteristics ofbuyers and non-buyers. we found thatbuyerscame fromhighsocial class groups. OG. Comparedwithnonabout theirfinancial buyers.66 on Fri.Expenditure Durables on Consumer PICKERING AND ISHERWOOD 513 can be obtainedfroma univariate no durablepurchase. AS 23. ofthedifference ofmeansand thedifference on each variable and non-buyers In Table 2 fulldetailsof themeanvaluesforbuyers of mean are set out.largerhouses as indicated of bedrooms and a larger bythenumber number ofpeople in thehousehold. AS20. INC. AVS. The technique used in thisprocedure is a discriminant analysis. BEDS The pattern of observations is consistent and meaningful. ES. The broad picture analysis ofmeansquaresbetween thetwogroups. TABLE 3 with meansquaredifferences Listing of variables significant 14-month between and non-buyers. however. NP. AS 12. Buyers up thecurrent weremorelikely to be able to payfordurable fromtheirsavingsand weremorelikely purchases to be savingup to buy durables. Buyershad a higher level of generaleconomicconfidence as indicated by their scoreson thefirst and from theseventh principal component principal component the pattern of mean scoressuggests thatbuyers weremorelikelyto be preparedto funds to buydurablesthannon-buyers.1975] . to regard Theytended.had higher incomes. OPT 1. This analysis is highly in thatit fits encouraging our priornotionsthatpurchasers are morelikelyto be thosethatare both better able and also psychologically more to makedurablepurchases. AS 24. buyersare more confident positionand financial and employment havegreater expectations.Our nextstepis to investigate willing theextent to which thevariables can be usedin combination with each other to classify correctly individual as either or non-buyers respondents buyers on thebasisoftheir scoreson eachvariable. AS2. regular savingas ofless importance thannon-buyers whichsuggest thatregularsavingand durablebuyingmay be competitive.but theyweremorelikelyto expecttheir future financial commitments to increaseand thismay have acted as an incentive to speed rateofpurchase. data buyers at 5 per centlevel Significant AS 1.88. Buyershad greater ofreplacing durablesthatthey expectations alreadyownedand expected to buymore thanin thepast yearand weremorelikely durables to respond to pricereductions on durables. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions .
This content downloaded from 117.66 on Fri.2 S.514 .F.S. P.F.1 D.R.F.R.F.Expenditure on Consumer Durables [Part4. =02%) = 33 = 812 = 676 S.1 D2 = 1P72 Mahalanobis = 242 = *75 BEDS *22 CAR 2 *32 CTV 30 TOTG -*32 OG NP UNIV *27 *26 -*24 D.2 = 2-25 (prob. P. =05%) = 49 D.211. TABLE 4 Discriminant and non-buyers analysisclassification of buyers over14 months (a) Incorporating attitude scales Forecast Actual Buyers Non-buyers Buyers 199 32 Non-buyers 9 36 AS 3 AS 4 Variables with scaleddiscriminant > 2 coefficients *52 .R.R.88. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions . = 226 = *851 = 671 Wilks A = *69 AS 16 -*25 AS17 -35 AS 22 30 AVS -*21 SIMP *38 SGET *29 individual scores onprincipal (b) Incorporating respondent components oftheattitude scales Forecast Actual Buyers Non-buyers Buyers 195 39 Non-buyers 13 29 Variables with scaleddiscriminant coefficients >2 OPT 1 *22 OPT 4 *28 OPT 7 -24 AVS ASC ES SIMP -*22 -*23 -*32 *34 Wilks A F D. AND ISHERWOOD PICKERING theindividual attitude scales and the Two tabulations are required to accommodate in the same principalcomponent scores as theyclearlycould not be used together analysis.33 -*20 *20 AS 13 -*22 AS 15 AS 10 OG BEDS CTV TOTG *31 *21 *31 -*36 CAR 2 *32 MahalanobisD2 =2-15 F = 1P95 (prob.S.
Whilewe do not have enoughdata to makean independent whichhavebeenfound. comparethe85 percentsuccessrateshownin Table 4(a) withan implicit itto a "corrected" criterion lead us to compare theabove considerations (proportional successrate-P..forthisgroupofpeople.1975] . thepeople thathave experienced circumstances. causinga predicted buyerto abandon a plannedpurchaseor makingit possiblefor have been made? Unfortusomeoneto make a purchasethatwould not otherwise re-interview information we do nothave. That is.The first two of these are general economic confidencecomponentsratherthan components whilethelast one is primarily with concerned reflecting durablebuying expectations. attention could usefully While the classificatory be paid Are they. It has been shown thisprocedure leads to some upwardbias on the successrate statistic thatfollowing test (Franket al. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions . component IV and VII have the closestrelationwiththe discriminant function. As such. effects might The right-hand columnsindicatethosevariableswiththe highest scaled discrimiof willingness thatbothmeasures and ability nantcoefficients and it willbe observed contribution.thenecessary nately. ratherthan 50 percent.in factit is better to allow some confidence in the results. procedure Thus.for to the reasons why particularindividualshave been misclassified. which is theproper functions ofthediscriminatory procedure.R. especiallywhen the exaggerating whichhas been derivedfromthe data is also then used to function discriminant ofgroupmembership createtheforecasts (Franket al. house have themain discriminating we findthatcomponents Whentheprincipal scoresare introduced I.88.Of thesocio-economic thatmake a majorcontribution of durablesand thesize of therespondent's variables.This can be particularly important whenthe groupsare of unequal size as theyare here.211.. the use of financialresources. given the relativesizes of the two groups and the identification adopted. successis encouraging. Both partsof thetable indicatequite a highdegreeof classificatory identified as either buyers correctly in theTable) withover80 percentofrespondents on thebasis of thediscriminant functions or non-buyers function.Expenditureon Consumer Durables PICKERINGAND ISHERWOOD 515 success(S. to purchasemake an important expectadiscriminatory Employment of purchasingstocks and shares.we shouldexpecttheoverallsuccessrateto be 67 percent.S.attitudes of achieving a savings of savingand thelikelihood are all attitudinal variables target to thediscriminant function. 1965). expectations regarding towardsthe importance the sum of moneyavailable to spend on durables.a marginsufficient and resultsalso apply to the success rates for individual Similar considerations groups.attitudesto prices. can bestbe judged by comparison of thepowerof thedistribution theinterpretation thatthetotalnumber withthesuccessratethatwouldhave beenproducedsupposing of individualsplaced in one group or anotherwere known.R. unexpected changesin their example.66 on Fri.ownership role. and othersurprise to allow us to answerthis questionbut the impactof windfalls wellrepayinvestigation. There is a danger of distinguished the importanceof the classification achieved. occupational group. thanthisat 85 per cent. attitudesto the opportunities income changes on durable buying. none of these are particularly strongly concerned withspecific intentions and thisis also trueoftheindividual durablebuying This content downloaded from 117. expectations temporary from theability to finance durablepurchases regarding savings.) proposedby Morrison(1969) whichhas thevalue 67 per cent.Bothdiscriminant at the 1 percentleveland thevalues of thestatistics are significant givenin theTable significance the two groupscan be indicatethatat an acceptablelevel of statistical on the basis of theirmultiplecharacteristics. 1965). effects of tions.
there is a relatively concentration Finally. therefore we rana series ofregression a stepwise For that purpose equations using leastsquares with a measure ofthereported ofexpenditure ordinary procedure.66 on Fri. held thatthe lag between attitude changeand its influence on change in buyer of1-2quarters. or willingness that variables. noted. It is possible of with those zeroexpenditures. Also.211. ability tobuy. high ofrespondents on durable withzero expenditures thatthedeterminants goods. is low. is little there as to theplausible size of the to an economic continuum. attitudes to saving.88.2. to purchase. The other variables that areclosely associated with particular nant function tend to be similar inparts (a) and(b) ofTable4: measures ofthelevel offunds available to be spent on durables. couldalso be usedto explain in actualexpenditure samevariables variations levels.Expenditure on Consumer Durables [Part 4. knowledge a priori doesprovide a basisfor whether theresults with reasoning judging obtained theregression A third ininterpreting from arereasonable. guidance oftheresults ofother coefficients.sincemostof thedata are in codedform.516 PICKERING AND ISHERWOOD . First. including might prove tobedifferent those that influence inexpenditure from thevariation levels ifonly those whoactually are included. Intuitively. these regressions relate to assume thatanyparticular there is no reason doesin Strictly speaking. in this areatogether studies However. excluding 2. byeachrespondent theresults somecomments arerequired that Before on certain factors describing in mind theperiodoftime needto be borne in interpreting them. would prevail longer ofattitudinal. commented that itis normally Indeed. ofrigorously to theformulation mathematically rigorous and so doesnotlenditself thatare likely to be encountered on therelationships between testable hypotheses often notrelated thecoefficients. thesocio-economic oftherespondent andhisexisting durable areall relevant. thisstudy themodelon which of buying behaviour is basedis not Secondly. status ownership position Discriminant analysis is an effective meansof distinguishing between different and in our case we haveshown thistechnique. Determinants ofExpenditure Levels This content downloaded from 117. to which of14months from is a period thetime ofthe initial interviews. expenditure overall.Whilethismay influence theselection of a fewattitude scalesand therejection of others thatare as wehavealready thegeneral levelofintercorrelation highly intercorrelated. to thatit is possible. However. we might expect that the influence ofsocio-economic andhence than status. for durables is oftheorder oftime behaviour Other periods maybe andin thenext section theperformance ofthevariables in explaining more relevant willbe considered. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions . caveat theresults analysis theexistence of multicollinearity concerns between thevariables. and nothing shouldbe inferred from theseequations static alone aboutthelikely ofeffect ofparticular length factors. variable for this oftime orthat itimmediately fact becomes relevant havean influence length wehavealready oncetheattitude is expressed. as Table1indicated. level as thedependent variable. This suggests attitude scalesselected thatthelonger term (14-month) distinction between buyerand non-buyer is moredependent upon considerations of general economic confidence and confidence abouttheability to bearthefinancial costsofdurable purchasing rather thandurable buying intentions this discrimias such. 4-month theanalysis is essentially expenditures Consequently.Consequently made an outlay two setsof regression are equations oneusing theexpenditure levels ofall respondents andthesecond reported. groups using the from itis helpful to investigate whether distinguish buyers non-buyers. however. in part(a) of Table 4.
the of expenditure variablewas taken in all equations to be the logarithm dependent ratherthan the expenditure itself. variablesAVS.theresults of explanatory power found in othercross-sectional investigations and the likely intervening influence of unexpected events. scoreson thefirst Equation 6: usingonlyrespondent eight principal components of the attitude scales. Table 6 is concerned onlythoserespondents expenditures. The equationsare reported differential attitude scalesas theregressors. Equation 4: adding in to the socio-economicand expectationalvariables in on the stock of durable goods equation 3 objectiveinformation alreadyowned(CAR 1. Table 1 also shows that the dependent thatit cannotbe thought to have been generated not normally distributed. This content downloaded from 117. scoresand socio-economic. ESC.t The resultsof the regression equations are set out in Tables 5 and 6. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions . based on the normaldistribution.Whilethe overallexplanatory and important powerof theequationsis not in thisrespect in viewof theusual degrees are not undulysurprising high. Equation 5: using attitude scales. Attitudes. CTV. ASC. and savings. features. TOTG). AVS and ES-are also attitudinal characterand it is surprising that variables dealing specifically with the socioeconomicstatusof therespondent little appear to have relatively explanatory power. It is interesting that severalof the other or expectational in significant variables-SIMP.thoughthe same equationsappear as follows: in bothtables. implying so callingintodoubttheuse of theusual teststatistics distributed by normally error. The results in Tables 5 and 6 can probably be largely left to speakforthemselves.66 on Fri. Equation 7: usingprincipal component expectational and stockvariables(equations4 and 6 combined).therebyreducingthe disproportionate weight values.expectationaland stock variables(equations 1 and 4 combined). it maybe helpful to comment on whatseemto us to be themostinteresting However.211. were more confident about theirfinancialand employment prospectsfor the following year. comparedwith otherrespondents. both in theirscale formand as principal are significant and do make a contribution expressed components. CAR 2. To overcomethis problemto some extent. Table 5 reportsregressions using expenditure levels of all respondents as the dependent with with non-zero variable. t The regressions expenditures These do not alterthecorrespondence withtheresults obtainedfrom the discriminant analysis and ingeneral tend they nottofit thedata quiteas wellas theequations using a log transformation. to Equation 3: adding in further expectational the socio-economic variablesin equation2.88.Expenditure AND ISHERWOOD on Consumer PICKERING Durables 517 variableis those not reporting any outlay.P.1975] . The signson all thevariablesare entirely plausibleand we concludefrom Table 5 that higherexpenditure levels are more likelyto be associated with people who. The problemof the presenceof be givento extreme that would otherwise variablewas overcomeby adding ?1 to all recorded zero itemsin the dependent so thatthelog value of expenditure expenditures by thosewho had not recorded any expenditure on consumer durableswas O. Equation 1: usingthesetof semantic variablesas theregressors with Equation 2: usingbasic socio-economic together on attitudes information to theuse of H. when othertypesof variableare also included. socio-economic. ES.were saving up to buy a consumer durableand thought could afford to finance thepurchase of a durablefrom they their werealso runusingactualrecorded as thedependent variable. Each table containsseveralseparateequations.
II~ .66 on Fri.518 Durables on Consumer AND ISHERWOOD -Expenditure PICKERING 4.88. [Part cq .. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions ..t ^ * ~m W F This content downloaded from 117.XE~~~e 0 l r n co t.211.I c m o cl 0 ^ 0~~~ su ~~~ c) t > Il I I t"s>gR~~~IC11 H~ itZ ~~~~~~~0 tn co I > i.
88. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions . Io I I b 0 t W I_Is s~ I 0~~ I I 6 1 ~~ ~o~~j I I ~~Pe I0 ~~~~~~~~~~~~~Vq I . I I - t-X-m - en enV tC~t - t0 0e This content downloaded from 117. |o 0~~~~~~~~0 .t.o >~ r I I I 0O00 I ???'?9I oO I P~ o? ~~~~~~~~o r~~~~~ e S tI I i ii I ? UtI | | E~~~ ~~~~II?o .1975] .Expenditureon Consumer Durables PICKERING AND ISHERWOOD N 519 00 O~ - O0 'o ~~00~OO ~0 0 ~~~~~~~~~~~~~~~~~~C.) 0 _ WI S o .211.tN 0E.66 on Fri.
influence the slope of regression linesfitted some associationbetween OG and INC on the one hand and t Thereis.211. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions .t durablesrather thanto spendtheir to buyconsumer So thenumber of durablesownedbecomesa measureofwillingness of materialism. someexpenditure in Table 6 foronlythoserespondents who did report The results on consumer appearto durablesoverthe 14 months are similar. In otherwords. not unnaturally. The importanceof different noticeableand it seems theymay be explainingdurable purchasesis particularly of as contributing to a measureof the respondent's liquid assets available thought of the ability forthispurpose.Higherexpenditures be associated with greaterconfidence about the respondent'sown employment a feeling thatitwas nota good prospects. fewer of had actuallymade a purchaseand indeedthereis a preponderance respondents levels(see Table 1). it is likelythatthisalso reflects ratherthan respondent to devote his resourcesto this formof economic activity clothing or foodstuffs or another-e. buildingup savingsfora rainyday. of the same itemswhentheexisting purchases are associated The signson the OPT variablesindicatethathigher expenditures withhigher levels of confidence. PICKERING ANDISHERWOOD on Consumer expected to have savingsthoughtheyattachedlowerimportance to regularsavings. lesser importance attached to regular saving. who had indicated durable purchaseswere more likelyto be made by consumers abilityand willingness greater economicconfidence and who had a greater financial financialvariablesin to financedurable purchases. available and to spend largersums of moneyon consumerdurables.g.66 on Fri. car and a greater likelihood of the variable measuringthe numberof The general predictive significance The positivesign on the consumerdurablesalreadyowned. Whilethismay be viewedprimarily as an indication to finance the willingness of the durablepurchases. coefficients indicatesthat the more durablesthat are alreadyowned the higheris on consumer likelyto be further expenditure durables. ownership ones becomewornout or obsolete.88. of alreadyhavingsomehirepurchasecredit outstanding. Thissuggests that proportion in thenumber in terms of thesocio-economic of thevariance of durables ownedis notexplicable and his household. thatis those withzero expenditure of buyersand non-buyers are stillsufficiently the numbers largeforanalysisto be of observations at the zero purchaselevelmay the concentration possiblealthough to the data.TOTG.It is interesting thatOPT 1 and OPT 4 expressed whichare themostrobustof thesevariablesin Tables 6 and 5 respectively are both of generaleconomicconfidence. is interesting. of spending amountson consumer timeto buildup savings larger and an expectation a second ofconsumer durables a higher levelof ownership already including durables. statusof therespondent This content downloaded from 117. Whyshoulddurableownerin thisway? It is possiblethatthenumber of durables shipbegetdurablepurchases choiceby somehouseholds alreadyownedis partially a measureof thepsychological to acquire consumer fundsin some otherway. Nevertheless. a large TOTG butinbothcasesthelevelofcorrelation is lessthan*4. non-buyers.Expenditure Durables [Part4. thedate oftheinitialsurvey as thedependent Withthereduction in the timeperiod overwhichexpenditures werereported. buying stocksand shares. ANALYSIS OF 4-MONTH EXPENDITURES on expenditure The analysisreported above was repeatedusingthe information behaviour over4 months from variable.520 . interpreted as indicators 3.had larger of consumer families and alreadyowneda largernumber durables. ofconsumer durables involves replacement. thatthe durablesand hencealmostan indexof a form It is also likely a commitment to makefurther.
buyerswere rathermore likelyto anticipatefuture in their commitments. confidence are those who and. and non-buyers are set out in Table 7. Finally. INC. Theywerealso morelikely weremorelikely to have larger amounts of money to be savingup to purchasea durableand expected available to spend on durablesand theyexpectedactuallyto spendmorethannonprice to buy quicklybecause of fearsof further buyers. The respondent scores on four of the principalcomponentsof the consumer as a OPT 1 has alreadybeen described data are also highly significant.66 on Fri.88. comparedwith indicated that made purchases non-buyers. CTV. OPT 2. AS 8. however. AS 4. TOTG and positionand prospects confidence regarding theirfinancial Buyershave greater thatat thetimeofthesurvey their employment prospects. younger The results power of of usinga multivariate analysisto assess the classificatory the variablesin combination with each otherare shown in Table 8. SIMP. Interestingly. Discrimination between of on a univariate difference meanstest. AS 12.211. as before. AS 2.Theyweremoreconfident it was a good timeto make purchasesof consumerdurablesand.R. CAR 2 at 10per centlevelbutnotat 5 per cent Significant AS 14. AS 23.1975] .distinguish The variableswhich.) are statistically significant would produce. they groupare generally presenteditselfand beforethe situation they should buy while the opportunity becamemoredifficult. A. AS 3. A large numberof the variableshave some associationwiththe in theanalysis. OPT 3.S. number tendto be of consumer durablesalreadyowned. AS 21. at 5 per centlevel Significant AS 1. OG. pattern emerges. AS 17. withshortrunbehaviour in statusas reflected highersocio-economic Buyerstendedto have a generally in whichthey their social class grouping. 3 and 5 are all concerned considerations aremoreclosely and itwouldappearthatdurable associated purchasing thanwithlongerterm behaviour.1. livedand the thetypeof residence incomes. that whilebuyersas a werealso rather that proneto act on theprinciple confident.Expenditure on Consumer Durables AND ISHERWOOD PICKERING 521 and Non-buyers between Buyers 3. AS 20.The othersignificant withsome aspectof durablepurchasing intentions OPT 2.purchasers component generaleconomicconfidence components indicateda higher level of economicconfidence. ES. The overall 75 and 78 percentsuccessand theseresults variesbetween classificatory performance and better than a random(weighted) allocation(P. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions . OPT 1. theresponsesof thosewho subsequently in thefollowing to buymoredurables had considered themselves yearand likely they to replacea durablethey alreadyowned. CHILD. theyweremoreproneto reportthattheir increases financial iftheir wouldbe affected incomefelland considered regular saving durablepurchases This rathersuggests to be less important than non-buyers. Again a consistent buyers TABLE 7 with meansquaredifferences of variables significant Listing 4-month data between buyers and non-buyers. Theyweremoreconcerned rises. we find thatbuyers and morelikely to have children thannon-buyers. AVS. The mainsocio-economic function established discriminant optimum This content downloaded from 117. OPT 5.
R.1 = 55 = 226 D.522 .F.1 = 242 D. are the age of the head of the household. The attitudescales associated with the discriminant TABLE 8 and non-buyers Discriminant analysis classification ofbuyers over4 months attitude scales (a) Incorporating Forecast Actual Buyers Non-buyers Buyers 45 24 Non-buyers 39 174 AS 2 AS 4 AS 6 AS 8 AS 9 AS 12 AS 17 AS 23 ASC ES MOVE Variables with scaleddiscriminant > 2 coefficients -22 -*29 *21 -20 *33 -21 -35 -35 -28 *23 *28 A -49 NY *37 INCY *24 HP *20 CARl -*34 CAR 2 *26 TOTG *26 = *76 Wilks A Mahalanobis D2 = 1P45 = 1P38(prob.F.S.S.88.R. P.F. = 752 = 609 P.66 on Fri.777 S.Expenditureon Consumer Durables AND ISHERWOOD PICKERING [Part 4. = 1P08%) F D.R.R.2 S. =603 scores onprincipal individual (b) Incorporating respondent components oftheattitude scales Forecast Actual Buyers Non-buyers Buyers 39 25 Non-buyers 45 173 Variables with discriminant > 2 coefficients OPT 1 *48 OPT 2 -*41 OPT 5 -24 SIMP *28 MOVE -*22 A 49 NY -35 INCY -22 CAR 1 *41 TOTG -*41 = *80 Wilks A Mahalanobis D2 = 1P15 = 1-72 (prob.2 .211. This content downloaded from 117.the statusvariablesthat are important of had lived in his present home and his ownership lengthof timethe respondent cars and all durable goods. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions .F. = 601%) F = 39 D.
levelsofexpenditure as thedependent theactualrecorded less than of the variance explainedis again low. fit butas they are based in Table 10 forbuyers better The results onlygivea rather are on only 90 respondents may have even less generalapplicability. and aspects of consumerdurable purchasingexpectations emphasis on different attitudes. of feeling thatit was not a good timeto be buildingup savings. with most equations explaining in Table 9 indicate thatit forall respondents 10 per centof thevariance. 20 This content downloaded from 117. CONCLUSION It is not oftenpossible to have access to the resourcesneeded to conductan to tryto underextensive interview and re-interview of a groupof consumers survey stand aspects of theirpurchasebehaviour. 3 and 5 tend to place greater measure of general economic confidence. function werethosedealingwiththerespondent's a good timeto save and to buy whether it was considered economicexpectations. however. Althoughthe numberof respondents includedin the surveys reportedon here is smallerthan mightbe ideal for such withunderstanding are of interest to thoseconcerned analysisit is hoped theresults need features and predicting behaviour.Expenditures owns his own home.1975] PICKERING AND ISHERWOOD - Durables on Consumer Expenditure 523 employment and general financial. 184.108.40.206 on Fri. The performance and whereasOPT 1 is a components is encouraging thescoreson themainprincipal OPT 2. although thereis may reflect and the results over-represented deliberately littleevidencethat householdincome was verycloselyassociated with any of the assumedthat consumer confidence and durablepurchasing are positively f It is normally correlated. Determinants regression equationswiththe log of When the variablesare used in explanatory theamount we find variable. First. has largerfunds most likelyto be greaterif the respondent attitude towardsthe availableto spendon consumer durablesand a morefavourable use ofhirepurchase.t The attitude attachedto regular and lesserimportance beat inflation in equation 1 but not significant when othervariableswere whichwere significant wereassociatedwithgreater added in equation 5 indicatedthathigherexpenditures and a stronger financial commitments of increasing expectation financial confidence. It is.In thisrespect therefore a willingness to purchase is not necessarily indicative of a highlevelof consumer confidence.When durablesand theimpactof durablepriceson thetiming areusedwe find thatcomponents scoreson themainprincipal components respondent V function and thatcomponent associatedwiththediscriminant I and II are strongly consideradurablebuying thatexplicit This again suggests is also not unimportant. of durablepurchases.a stronger scales saving.Larger expenditures a higherlevel of fundsavailable to spend on about future employment prospects.Two important consumer durablepurchasing to be borne in mind in assessingthe generalapplicability of these results. The results of and robustpredictors variablesthatare significant and expectational is attitudinal tend to be associated with greaterconfidence expenditures. thanthe 14-month overthe 4-month tionsare moreimportant Levels of Expenditure 3.2. feeling thatdurablesshould be purchasedquicklyto consumer durables. in the samplethe higher groupswere althoughall incomegroupswererepresented thisbias. horizon. arguablethata preference forbuying durables rather thansavingand a feeling thatpurchases shouldbe madequickly is an indication of a willingness to beat inflation to makepurchases of durables butat thesame timeis a reflection of a lack ofconfidence at least in theability ofgovernments to maintain thevalueof savings. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions .
524 PICKERING AND ISHERWOOD Durables [Part4.66 on Fri.211.o~~~~~~~~~~~~~~~~~e fi 'I * e~~~~~~~~~c *n ON cq Q.0 tn c tmW This content downloaded from 117. on Consumer -Expenditure 01 In I0 1 I 'll 00 N e SS 4 X Sr C m I 6 ON.88.1~q I I I I* ~~~~~~~t?n o . 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions .. c Nv>?n~~~~~~~~c O 1~~~~~~~C i* o XS y I 0 ?00X.
66 on Fri. NI .1975] PICKERING AND ISHERWOOD - Durables on Consumer Expenditure 525 e -I N I'l 1 ON . I (n. enI In ON I B I Xb~~~~~~~~T Oq i b2t Il T N T.q>.~~~ I 000 I 00 I I I en I I I I > a)Ct~~~~~~~~O N S S N I o ?c t I I 00 I'Ol I' en t' ~ Ie nt 4r- 0C 46. T" c. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions .I^ V O O I I0 I I DIT .46 nr 4Cb46 CZ This content downloaded from 117.~~1.0 I'l I e. r.88.211.
ES). coefficient (b) discriminant takesa value > -2. is less commitment to theimportance of regular 3. OPT 6.526 . the social class statusof the householdas indicatedby the occupationof the HoH is higher (OG). thereis greater confidence about future financial and employment prospects (AS 2. (c) thevariable appearsin morethanone regression equation in a set of equations. 3. 4. 4). high as significant between thevariablesselected at thedifferent degreeof similarity stages the 4-month the 14-month within analysisof buyerbehaviourand within analysis.Secondly.Expenditure AND ISHERWOOD on Consumer PICKERING Durables [Part4. Discriminant analysisand testsof the difference of means betweenthose who boughta consumerdurable and concentrate upon differences moreinvestigation thosewho did not. Multipleregression of analysisallows rather attitudes and characteristics in therecorded ofconsumer theinfluence upon variations to contrast Whileit wouldbe incorrect levelsofexpenditure. These are AS 5. of meansare significant Notesto Table 11: * where:(a) differences at 10 percentlevel. a period wheninflation expectations was in people's minds. Contentanalysisover such a wide significant However range of tests must inevitablybe subject to personal interpretation.211. but also some pointsof difference There are some pointsof similarity betweenthe variablesfor the two timeperiods.66 on Fri.It maybe thattherelationships between alreadystrongly different behaviour are a specific reflection ofattitude and durablebuying oftheparticular types of thattimeand may not be generally economiccircumstances applicablein other sortsof economicclimate. ** where:(a) differences of meansare significant at 5 percentlevel. theexplanatory directly and themultiple powerof thediscriminant regression analysesit does seemvalid to of thediscriminant thattheoverallpredictive comment performance analysis appears thatthereis a generally to be superior. and buyerbehaviourin 1971 and 1972. to the overall The different typesof analysisused make separatecontributions picturethatis builtup. PE and STOT.88. of consumer number durablesare ownedalready(TOTG). a larger 5. Ninevariables havebeenomitted from this tableas they arenotsignificant at any stage of the analysis. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions . It may well be therefore higher degreeof and thatit is moreimportant to attempt to homogeneity amongdurablepurchasers thanto attempt willmakea durablepurchase at all rather a consumer whether predict value of theoutlayonce a purchasehas been decided theactual monetary to predict upon. (c) the variableappearsin morethan one regression equation in a setof equations. ESC. there saving(SIMP). theresults herewe would concludethatforboththe 14-and 4-month from reported on consumerdurables are incurredby households periods greaterexpenditures where: 1. aspectsofpurchase behaviour discussed here. AS 18. 2. the level of fundsavailable to be spentor expectedto be spenton consumer durablesis higher (AVS. formthevariablesand theparticular Table 11 setsout in summary stagesin the Thereis in generalan encouragingly analysisin whichtheyprovedsignificant. theresults relateto attitudes. AS 11. This content downloaded from 117. (b) discriminant coefficient takesa value > .3. OPT 8.
88. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions .1975] . ence Discrimi-regression. all rebuyers of nant all rebuyers nant of Variable means analysis spondents only means analysis spondents only AS1 AS2 ** AS4 AS6 AS7 AS8 AS9 AS3 ** ** ** ** ** * ** ** ** ** ** ** ** * * * * ** * * ** * * * * ** * * * ** ** * * * ASlO AS 12 AS 13 AS 14 AS 15 AS 16 AS 17 AS 19 AS2O AS21 AS 22 AS 23 AS24 OPT1 **I OPT 2 OPT3 ** ** * * ** ** ** ** ** * ** * * * ** * ** ** * ** * * * * * ** ** OPT4 OPT5 OPT7 AVS ASC ES HPAT ** ** * ** * ** ** ** * * ** * * * ** ** ** * ** * * * * ** ** ** * * ** ** * * ** ** ** ** * * * * * ** ** * * ** ** ** A SIMP SGET OG ** * ** NP BEDS NY OWN MOVE INC INCY UNIV CHILD CAR1 CAR2 TOTG HP CTV ** * ** * ** ** * * ** * ** ** ** * ** ** ** ** ** * ** * * This content downloaded from 117.211. ence Discrimi-regression.66 on Fri. regression.Expenditure Durables on Consumer AND ISHERWOOD PICKERING 527 TABLE 11 of variables foundto be significant at different stagesof theanalysis listing Summary analysis 14-month analysis 4-month Multiple Multiple Multiple Multiple DifferDifferregression.
higher 14-month expenditures are also associatedwith: fromsavings 6. 9. R. methodology 43-63. 9). a greater durablesand/or conviction thatit was a good timeto buy consumer not a good timeto save (AS 8.66 on Fri.N. Zahn eds). F. Prediction with consumer attitudes: thetimeseries-cross section paradox. G. PICKERING.. E. (1965). W. 367-378. AND ISHERWOOD PICKERING In addition. Amsterdam: discriminant FRANK. OPT 7 which relatesto in the 14-month resourcesis significant analysis.58. 156-163. Amer. 7. New York: McGraw-Hill. J. C. Besides to make purchases do have independent expectationstraditionally collected for indicatorsof financialand employment ought in futureto be paid to forecasting purposesit seems that close attention to use fundsto buy and willingness collecting an indicationof householdliquidity consumer durablesrather than to put the moneyto otheruses. E.C.. ThePowerful of discriminant MORRISON. On theinterpretation analysis. Morganand E. 250-258. Higher4-month expenditures are also associatedwith: 8.2.J. G. Consumer. 203-226. Bias in multiple analysis. BEDS).. their MUELLER. (1973).. MASSY. (1965). C. such as to save it. MarketRes. Affairs. Soc. D. ofconsumer on behavior: a cross-section W. J. commitments of the householdwill 10. a stronger feeling that because of risingdurablepricespurchasesshould be made quickly(AS 17). HARRISSON. D. ADAMS. 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions .211. PICKERING.not yetestablished.F.Econ. B. Statist. Stats. purchasing intentions. G.But there to be some case forbelieving thattheycould be. 6. an expectation thatthe future financial increase(AS 23). J. This content downloaded from 117. Elsevier. KATONA. (1969). larger householdand/or home sizes (NP. G. Ass. F. (1963). and ISHERWOOD. D. J.. In Human Behaviour inEconomic EssaysinHonorofGeorge J. Katona(B. or whether Whether thesecross-sectional results are replicable theycould serveas a does seem guideto time-series prediction is.A.528 .47. Marketing Res. (1974). (1960). and COHEN. and MORRISON. buying DUNKELBERG.Expenditure on Consumer Durables [Part4. The impact attitudes study. Statist. Ten yearsof consumer attitude surveys: forecasting record.. 16. Strumple. first component (OPT 1) whichis a generalindicator predictive contribution to make for both time periods. 136. A. 899-917. Purchaseprobabilities and consumer durable behaviour. a greater confidence that durablepurchasescould be financed (AS 22).J.88. R.F. (1972). Soc.J. attitudes to the use of financial OPT 2 and 5. which carrylargerloadings on variables concernedwith durable in the4-month analysis. Marketing Res. thatthe The principal oftheattitude scalevariables indicate component combinations has a of economicconfidence. Identification and measurement of and some preliminary consumer confidence: results. REFERENCES Rev. are significant ofconsumer confidence On thebasis oftheseresults we wouldarguethatmeasures or thewillingness predictive value.. of course. J...
*377 .Expenditureon Consumer Durables AND ISHERWOOD PICKERING 529 APPENDIXI Components Scales on FirstEightPrincipal Main Loadingsof Attitude I AS 1 2 II III IV *252 V .254 4-2 *277 .*208 *238 23 % ofvariance 20 5 explained *204 .285 *209 .245 .*211 *211 -*242 *259 -*224 *236 .2 5.239 *260 *346 -*298 -*209 -*215 *314 -*261 .1975] .217 -*446 39 11-2 7-6 7.88.7 50 This content downloaded from 117.298 *385 *280 .66 on Fri.304 -*348 -*204 .325 -*239 . 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions .*260 -*298 *216 303 *278 .*223 -*239 *220 *351 *377 *314 19 20 21 22 24 18 *222 .*275 *402 *369 .259 .*322 .211.612 .336 10 *268 *295 14 15 16 17 11 12 13 *230 .207 VI VII VIII *434 *283 *290 *301 *236 *266 250 *278 3 4 5 6 7 8 9 *272 *278 *224 253 .*246 .340 .245 -*212 -*219 401 *343 245 403 .256 -*214 -*320 .
PICKERINGAND ISHERWOOD APPENDIXII Cases where between Individual Variables> 4 Correlations AS[I *47 50 AS2 *52 ASS 1 *62 78 AS6 L*42 x46 *82 *49 053 AS4 ASI2 ASI6 AS3 ASH ASIS AS7 ASI3 CAR I *43 51 ASI4 TOTG AS20 AVS *46 INC INCY .211. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. *66 AS21 ES OG CAR2 *52 ESC *42 ASC *44 52- SGET fNP 41 PE -48 58 CHILD *49 NY This content downloaded from 117.66 on Fri.4J -@40 152 .48 MOVE A -*54 _.88.Expenditure on Consumer Durables [Part 4.530 . 24 May 2013 09:05:18 AM All use subject to JSTOR Terms and Conditions .
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