All Title Author
Keywords Abstract


The Relative Importance of Household Budget Categories: A Best-Worst Analysis

DOI: 10.4236/aasoci.2018.85023, PP. 378-396

Keywords: Household Budgeting, Consumer Preferences, Household Resource Allocation

Full-Text   Cite this paper   Add to My Lib

Abstract:

Headlines regularly report on the changing or unmet needs of households and are often focused on costs of healthcare swamping household resources or childcare costs, forcing families to make tradeoffs that negatively influence children or society. Development of impactful educational programming and public policy necessitates an understanding of various households’ allocations of resources, specially the poor, food insecure households. In order to explore households’ relative prioritization of expenditures, a survey was conducted in this manuscript with a sample of Midwest residents (n = 1263), with the objective of evaluating the relationship between household demographics and budgeting prioritization of six expenditure categories. Individual respondent’s relative prioritization for budgeting categories was estimated using a best-worst experiment for six expenditure categories. Housing was the most important expenditure category identified for the sample. Housing also received the largest share of relative importance for two of four latent classes identified. For both low and the very low food secure households a significant and positive relationship was found between their food security status and the relative importance placed on childcare and transportation. Identification of segments of respondents with specific priorities (e.g., childcare expenditures) may aid in the development of impactful policies, particularly for at-risk populations (e.g., food insecure households).

References

[1]  Brown, S., Hole, A. R., & Kilic, D. (2014). Out-of-Pocket Health Care Expenditure in Turkey: Analysis of the 2003-2008 Household Budget Surveys. Economic Modeling, 41, 211-218.
https://doi.org/10.1016/j.econmod.2014.05.012
[2]  Brandrup, J. D., & Mance, P. L. (2011). How Do Pregnancy and Newborns Affect the Household Budget? Family Matters, No. 88, 31-41.
[3]  Coleman-Jensen, A., Rabbitt, M. P., Gregory, C., & Singh, A. (2015). Household Food Security in the United States in 2014. ERR-194, U.S. Department of Agriculture Economic Research Service.
[4]  Economic Policy Institute (2015). Family Budget Calculator.
http://www.epi.org/resources/budget/
[5]  Ferdous, N., Abdul, R. P., Chandra, R. B., & Ram, M. P. (2010). A Comprehensive Analysis of Household Transportation Expenditures Relative to Other Goods and Services: An Application to United Sates Consumer Expenditure Data. Berlin: Springer Science and Business Media.
[6]  Kalwij, A., & Salverda, W. (2007). The Effects of Changes in Household Demographics and Employment on Consumer Demand Patterns. Applied Economics, 39, 1447-1460.
https://doi.org/10.1080/00036840500474256
[7]  Louviere, J. J., Flynn T. N., & Marley, A. A. (2015). Best-Worst Scaling: Theory, Methods and Application. Cambridge: Cambridge University Press.
https://doi.org/10.1017/CBO9781107337855
[8]  Lusk, J. L., & Briggeman, B. C. (2009). Food Values. American Journal of Agricultural Economics, 91, 184-196.
https://doi.org/10.1111/j.1467-8276.2008.01175.x
[9]  McGarth, M. (2016). 63% of Americans Don’t Have Enough Savings to Cover a $500 Emergency. Forbes.
https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/maggiemcgrath
/2016/01/06/63-of-americans-dont-have-enough-savings-to-cover-a-500-emergency/
&refURL=&referrer=#5e50e9c34e0d
[10]  Mutikani, L. (2016). Rising Rents, Healthcare Costs Support U.S. Underlying Inflation. London: Reuters, Business News.
http://www.reuters.com/article/us-usa-economy-idUSKCN0Z21IT
[11]  Morgan, C. J., Dominick, S. R., Widmar, N. J. O., Yeager, E. A., & Croney, C. C. (2016). Perceptions of Corporate Social Responsibility of Prominent Fast Food Establishments by University Students. Journal of Food Distribution Research, 47, 3.
[12]  Econometric Software, Inc. (2012). Nlogit 5.
[13]  PEW Charitable Trusts (2015). The Role of Emergency Savings in Family Financial Security How Do Families Cope with Financial Shocks? The PEW Charitable Trusts: Briefs.
http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2015/10/the-role-of-emergency-savings-in-family-financial-security-how-do-families
[14]  Pollack, E. C., Griffin, B. A., & Lynch, J. (2013). Housing Affordability and Health among Homeowners and Renters. American Journal of Preventive Medicine, 39, 515-521.
https://doi.org/10.1016/j.amepre.2010.08.002
[15]  Siegel, C. (2013). Why Didn’t They Teach Me This in School? 99 Personal Money Management Principles to Live By. Simple Strategic Solutions LLC. CreateSpace Independent Publishing Platform. South Carolina.
[16]  Train, K. (2002). Discrete Choice Methods with Simulation. Cambridge: Cambridge University Press.
[17]  U.S. Bureau of Labor Statistics USBLS (2016). Consumer Expenditure Survey.
http://www.bls.gov/cex/
[18]  U.S. Bureau of Labor Statistics USBLS (2016). Consumer Expenditure Survey. Table Composition of Consumer Unit 1502.
https://www.bls.gov/cex/tables.htm
[19]  U.S. Census Bureau (USCB) (2015). Geography Geographic Terms and Concepts—Census Divisions and Census Regions 2015.
https://www.census.gov/geo/reference/gtc/gtc_census_divreg.html
[20]  U.S. Census Bureau (2014). American Community Survey, American Community Survey 1-Year Estimates, Table S1901.
http://factfinder2.census.gov
[21]  USDA ERS (2012). U.S. Household Food Security Survey Module: Three-Stage Design, with Screeners.
https://www.ers.usda.gov/topics/food-nutrition-assistance/food-security-in-the-us/survey-tools/#household
[22]  Varian, H. R. (2003). Intermediate Microeconomics: A Modern Approach (6th ed.). New York, NY: Norton.
[23]  Widmar, N. J. O., Byrd, E. S., Wolf, C. A., & Acharya, L. (2016). Health Consciousness and Consumer Preferences for Holiday Turkey Attributes. Journal of Food Distribution Research, 44, 83-97.
[24]  Wolf, C., & Tonsor, G. T. (2013). Dairy Farmer Preferences for 2012 Farm Bill. Journal of Agricultural and Resource Economics, 38, 220-234.

Full-Text

comments powered by Disqus