Talking About Budgets: Time and Uncertainty in Household Decision Making (original) (raw)
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Sociological Research Online, 2001
This paper uses interview data from retired households to inform a discussion about economic models of consumption. It is divided into two parts. In the first part, the economic models are described. The paper then discusses several different types of reasons for finding them unhelpful in explaining consumption. The second part of the paper considers the role of 'middle range' theories in developing plausible models of household behaviour. Phenomena which the interviews suggest are important in explaining consumption, such as time allocation, the labour supply decision, the ubiquitous durability of goods and the structure of the household, are not typically supported by middle range theory in current models. Without the constraints of such theory, it is very hard to distinguish models providing genuine explanation from those that merely fit the data. The latter part of the paper also discusses aspects of a new middle range theory of consumption suggested by the interviews.
Household budget: Impacts of incomes on consumption
Journal of Economic Development, Environment and People, 2018
This research purpose is to explain the relation between several types of income and total personal consumption. Based on research method used, which is descriptive and regression analyses, the high influence of incomes on consumption is proven. Through various statistical results, it is shown in which extent the correlation is relevant and how it is concluded that the chosen variables are sufficient to explain the variation of the level of consumption through time. The main goal of this research is to discover what lies behind consumption and to understand the households as main consumption units on the market. Gained results are based on data analysis, in which the independent variables are "Income from pension insurance," "Income from property", "Income from small business" and "Wages and salaries," while the dependent variable is "Personal consumption". After testing all assumptions of linear regression and conducting the entire analysis, it is concluded that every independent variable is good in explaining the value of the dependent variable "Personal consumption". The statistical unit on which the analysis is based is a household, so statistics shown in this research are useful for understanding the essence of a budget in household economies.
Budget Concept: The Reality Of Human Behavior In Budgeting Processes
2018
The purpose of this article is to provide an understanding of human behavior that effect the budgeting processes. This is a qualitative study and analysis start from awareness of budgetary concept and performer agent of budgeting process. In Agency theory conflict of budgeting processes make inconsistency and inequality around the principal and the agent. Mind is one that can block the human understanding of the true reality in the budgeting. Humans live in this world as an expression of any opinion issued from the mind. Ego is a form of internal conflict in the budget preparation process. “Adhiluhung” concept is one of the solution for minimizing the effect of human behavior in budgeting process.
Household behavior in practicing mental budgeting based on the theory of planned behavior
Financial Innovation, 2018
Ajzen's theory of planned behavior (TPB) suggests that planned behavior is determined by behavioral intention. Despite extensive literature based on TPB, household mental budgeting behavior explained by TPB is underexplored. The current study empirically tested TPB factors in light of mental budgeting behavior. The hypothesized model was tested using partial least squares structural equation modeling (PLS-SEM). PLS-SEM was employed using a Likert-scaled questionnaire administered to 275 households. The results indicate that mental budgeting attitude and mental budgeting past behavior strongly predict mental budgeting intention, and mental budgeting intention predicts mental budgeting behavior. Further, mental budgeting intention partially mediates the relationship between mental budgeting attitude and mental budgeting behavior, and mental budgeting past behavior and mental budgeting behavior. This study contributes to the academic interest in theoretical progress in household behavior.
Understanding how people think about their daily spending
2018
ISER commissioned Kantar Public to conduct 20 in-depth face-to-face qualitative interviews to explore how people think about their personal finances, with a view to understand how to design a mobile app to minimise the burden on participants recalling their daily spending, as part of the using a mobile app of Understanding Society: the UK Household Longitudinal Study. The research asked participants to recall recent spending both spontaneously and using three pre-defined models. As well as contributing to the understanding of how people conceptualise spending, the qualitative research also provides recommendations for improving the way that this information can be elicited from participants using an app.
Where Did All That Money Go? Understanding How Consumers Allocate Their Consumption Budget
Journal of Marketing, 2008
All types of consumer expenditures ultimately vie for the same pool of limited resources-the consumer's discretionary income. Consequently, consumers' spending in a particular industry can be better understood in relation to their expenditures in others. Although marketers may believe that they are operating in distinct and unrelated industries, it is important to understand how consumers, with a given budget, make trade-offs between meeting different consumption needs. For example, how much would escalating gas prices affect consumer spending on food and apparel? Which industries would gain most in terms of extra consumer spending as a result of a tax rebate? Answers to these questions are also important from a public policy standpoint because they provide insights into how consumer welfare would be affected as consumers reallocate their consumption budget in response to environmental changes. This study proposes a structural demand model to approximate the household budget allocation decision, in which consumers are assumed to allocate a given budget across a full spectrum of consumption categories to maximize an underlying utility function. The authors illustrate the model using Consumer Expenditure Survey data from the United States, covering 31 consumption categories over 22 years. The calibrated model makes it possible to draw direct inferences about the trade-offs individual households make when they face budget constraints and how their relative preferences for different consumption categories vary across life stages and income levels. The study also demonstrates how the proposed model can be used in policy simulations to quantify the potential impacts on consumption patterns due to shifts in prices or discretionary income.
CONSUMPTION SAVING BUDGETING MODEL
2021
In the following theoretical article, I propose a microeconomic consumption-saving model in attempt to integrate classical and behavioral economic approaches in order to obtain optimal solution for a consumer choice problem. Here I make a connection to the mental accounting and transaction utility, yet have kept the formal classical approach. This is due to a significant amount of empirical evidences, supporting existed economic theories. Additionally, I propose a demand function, derived from the consequences of the consumption-saving model and introduce a multi-period mode. This model can be a sufficient platform for a unified fundamental microeconomic theory of a consumer choice.
Spend More Today: Using Behavioural Economics to Improve Retirement Expenditure Decisions
SSRN Electronic Journal, 2000
This paper examines how behavioural economics can be used to improve the expenditure decisions of retirees. It identifies how accumulated assets can be used optimally throughout retirement to produce life-long income when required, to make provision for contingenciessuch as unanticipated spikes in expenditure -and to optimize the size and timing of bequests.