Consumption Patterns of the Millenial Generational Cohort

Rebecca Abraham; Charles Harrington

doi:10.4236/me.2015.61005

Home > Journals > Business & Economics > ME

Modern Economy > Vol.6 No.1, January 2015

Consumption Patterns of the Millenial Generational Cohort ()

Rebecca Abraham, Charles Harrington

Huizenga School of Business, Nova Southeastern University, Fort Lauderdale, FL, USA.

DOI: 10.4236/me.2015.61005 PDF HTML XML 4,774 Downloads 5,882 Views Citations

Abstract

This study constructs a consumption profile for the Generation Y age cohort using responses to the Consumer Expenditure Survey furnished by the Bureau of Labor Statistics from the financial crisis period. This generation was theorized to employ both economic reasons, i.e. preferences for inexpensive products, and the desire to comply with the values and normative beliefs of social referent groups. For the rent or buy a home decision, the variability of income, risk of foreclosure and loss of mobility governed the consumption choice. For the purchase a new car or a used car decision, economic considerations dominated with variability of income being the sole explanatory variable for the choice. Family size and the need to conform to group norms explained the choice of bringing food from home to the workplace. Socialization opportunities and group identification explained the decision to eat lunch away from the workplace. Family size and desire for group conformity explained vacation expenditure as they did for bringing food from home. For both furniture and large appliances and small appliances, the need to conform to group norms was significant suggesting that they may be the subject of social interactions. Given that investment in a private education is often considered a luxury, the proportion of the family budget allocated to this expense was significant along with the expected need for conformity with group values.

Keywords

Generation Y, Consumption Patterns, Millennial Generation, Utilitarian, Social Referent

Share and Cite:

Abraham, R. and Harrington, C. (2015) Consumption Patterns of the Millenial Generational Cohort. Modern Economy, 6, 51-64. doi: 10.4236/me.2015.61005.

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1]	Pendergast, D. (2010) Getting to Know the Y Generation. In: Benckendorff, P., Moscardo, G., Pendergast, D., Eds., Tourism and Generation Y, CAB International, Cambridge, 85-97.
[2]	Lowrey, A. (2013) Do Millenials Stand a Chance in the Real World? New York Times, 1-11.
[3]	Friedman, M. (1957) A Theory of the Consumption Function. Princeton University Press, Princeton University, Princeton.
[4]	National Delinquency Survey (2007) Delinquencies Increase in Latest MBA National Delinquency Survey. Mortgage Bankers’ Association Press Release NDS.
[5]	Malley, J. and Moutos, T. (1996) Unemployment and Consumption. Oxford Economic Papers, 48, 584-600. http://dx.doi.org/10.1093/oxfordjournals.oep.a028586
[6]	Mincer, J. (1960) Employment and Consumption. The Review of Economics and Statistics, 42, 20-26. http://dx.doi.org/10.2307/1926091
[7]	Romer, C.D. (1990) The Great Crash and the Onset of the Great Depression. Quarterly Journal of Economics, 105, 597-624. http://dx.doi.org/10.2307/2937892
[8]	Park, M., Jang, H., Lee, S. and Brayley, R. (2010) Tourism and the N Generation in a Dynamically Changing Society: The Case of South Korea. In: Benckendorff, P., Moscardo, G. and Pendergast, D., Eds., Tourism and Generation Y, CAB International, Cambridge, 85-97.
[9]	Greenberg, K. (2009) Ford Uses Social Media to Target Younger Buyers. Marketing Daily, 1-10.
[10]	Jennings, G., Cater, C., Lee, Y.-S., Ollenburg, C., Ayling A. and Luny, B. (2010) Generation Y: Perspectives of Quality in Youth Travel Experiences in an Australian Backpacker Context. In: Benckendorff, P., Moscardo, G. and Pendergast, D., Eds., Tourism and Generation Y, CAB International, Cambridge, 58-72.
[11]	Ngai, J. and Cho, E. (2012) The Young Luxury Consumers in China. Young Consumers, 13, 255-266. http://dx.doi.org/10.1108/17473611211261656
[12]	Sheth, J.N., Newman, B.I. and Gross, B.L. (1991) Consumption Values and Market Choices: Theory and Applications. South Western, Cincinnati.
[13]	Standard and Poor’s (2011) Case Shiller Index. Standard and Poor’s, New York. http://us.spindices.com/indices/real-estate/sp.case-hiller-us
[14]	Morgenson, G. (2007) Inside the Countrywide Lending Spree. New York Times. www.nytimes.com/2007/-8/26/business/yourmoney26country.html?pagewanted=all
[15]	Goolsbee, A. (2007) Irresponsible Mortgages Have Opened Doors to Many of the Excluded. New York Times. www.nytimes.com/2007/03/29.../29scene.html
[16]	Hahm, J. and Stiegerwald, D.G. (1999) Consumption Adjustment and Time-Varying Income Uncertainty. The Review of Economics and Statistics, 81, 32-40. http://dx.doi.org/10.1162/003465399767923791
[17]	Weber, M., Guenther, R. and Wittich, C. (1978) Economy and Society: An Outlook of Interpretive Sociology. University of California Press, Berkeley.
[18]	Ritchie, C. (2009) Young Adult Interaction with Wine in the UK. International Journal of Contemporary Hospitality Management, 23, 99-114. http://dx.doi.org/10.1108/09596111111101698
[19]	Solnick, S.J. and Hemenway, D. (1998) Is More Always Better? A Survey on Positional Concerns. Journal of Economic Behavior and Organization, 37, 373-383. http://dx.doi.org/10.1016/S0167-2681(98)00089-4
[20]	Alpizar, F., Carlsson, F. and Johansson-Stenman, O. (2005) How Much Do We Care about Absolute versus Relative Income and Consumption? Journal of Economic Behavior and Organization, 56, 405-421. http://dx.doi.org/10.1016/j.jebo.2002.10.007
[21]	Harbaugh, W.T. (1998) A Signaling Explanation for Charity. American Economic Review, 88, 277-282.
[22]	DeGroot, M. (1970) Optimal Statistical Decisions. Wiley, New York.
[23]	Bell, D.J. and Valentine, G. (1997) Consuming Geographies: We Are Where We Eat. Routeledge, London.
[24]	Jones, M. (2007) Feast: Why Humans Share Food. Oxford University Press, Oxford.
[25]	Gunter, B., Hansen, A. and Touri, M. (2008) The Representation and Reception of Meaning in Alcohol Advertising and Young People’s Drinking. Department of Media and Communications, University of Leicester, Leicester.
[26]	Coyne, S.M. and Ahmed, T. (2009). Fancy a Pint? Alcohol Use and Smoking in Soap Operas. Addiction Research and Theory, 17, 345-359. http://dx.doi.org/10.1080/16066350801902459
[27]	Wong, N.Y. and Ahuvia, A.C. (1998) Personal Taste and Family Face: Luxury Consumption in Confucian and Western Societies. Psychology and Marketing, 15, 423-441. http://dx.doi.org/10.1002/(SICI)1520-6793(199808)15:5<423::AID-MAR2>3.0.CO;2-9
[28]	Hung, K., Chen, A.H., Peng, N., Hackley, C. and Rungpaka, A.T. (2011) Antecedents of Luxury Brand Purchase Intention. Journal of Product & Brand Management, 20, 457-467. http://dx.doi.org/10.1108/10610421111166603
[29]	Kim, E.Y. and Kim, Y.K. (2005) The Effects of Ethnicity and Gender on Teens’ Mall Shopping Motivations. Clothing and Textiles Research Journal, 23, 65-77. http://dx.doi.org/10.1177/0887302X0502300201
[30]	Hirschmann, E.C. (1983) Predictors of Self-Projection, Fantasy Fulfillment, and Escapism. Journal of Social Psychology, 120, 63-76. http://dx.doi.org/10.1080/00224545.1983.9712011
[31]	Nusair, K., Bilgihan, A., Okumus, F. and Cobanoglu, C. (2013) Generation Y Travelers’ Commitment to Online Social Network Websites. Tourism Management, 35, 13-22. http://dx.doi.org/10.1016/j.tourman.2012.05.005
[32]	Morton, L.P. (2002) Targeting Generation Y. Public Relations Quarterly, 47, 16-26.
[33]	Chapin, S. (1928) A Quantitative Scale for Rating the Home and Social Environment of Middle Class Families in an Urban Community. Journal of Educational Psychology, 19, 99-111. http://dx.doi.org/10.1037/h0074500
[34]	Chapin, F.S. (1932) Socioeconomic Status: Some Preliminary Results of Measurement. American Journal of Sociology, 37, 581-587. http://dx.doi.org/10.1086/215796
[35]	McCormick, M.J. (1930) A Scale for Measuring Social Adequacy. Social Science Monographs, National Catholic School of Social Service, Washington DC.
[36]	Sewell, W.H. (1943) A Short Form of the Farm Family Socioeconomic Status Scale. Rural Sociology, 8, 161-170.
[37]	Cooper, C. (1974) The House Is a Symbol of the Self. In: Lang, J., Burnette, C., Moleski, W. and Vachon, D., Eds., Designing for Human Behavior, Dowden, Hutchinson and Ross, Stroudsburg, 130-146.
[38]	Vershure, B., Magel, S. and Sadalla, E.K. (1977) House Form and Social Identity. In: Suedfeld, P., Russel, J., Wad, L.M., Szigeti, F. and Davis, G., Eds., The Behavioral Basis of Design, Book 2, Dowden, Hutchinson and Ross, Stroudsburg, 273-278.
[39]	National Center for Policy Analysis (2013) Private School Choice: Options for Texas Children. Policy Report 345.
[40]	Lin, T.C. (2005) The Determinants of Parental Choice of Education: The Case of Pennsylvania. Journal of Economics, 31, 45-59.
[41]	Caroleo, F.E. and Pastore, F. (2012) Talking about the Pigou Paradox. International Journal of Manpower, 33, 27-50. http://dx.doi.org/10.1108/01437721211212510