Household Life Cycles and Lifestyles in the United States

Kamakura, Wagner A., Household Life Cycles and Lifestyles in The United States, Journal of Marketing Research, Vol. XLIII (February 2006), 121-132

13 Pages Posted: 12 Feb 2014

See all articles by Rex Yuxing Du

Rex Yuxing Du

University of Houston - C.T. Bauer College of Business

Wagner A. Kamakura

Rice University

Date Written: 2006

Abstract

Household life cycle has been widely used as a determinant of consumer behavior and a basis for market segmentation. However, there is considerable disagreement about how life stages should be defined and how households progress through these stages. Existing studies use a priori definitions, which are tested on a cross-sectional survey of households collected at a single point in time and thus cannot reveal the real dynamics of the household life cycle. The Panel Study of Income Dynamics provides longitudinal data on household composition in the United States for a period of 34 years; the authors use this to identify empirically the most typical stages and paths that U.S. households have followed since 1968. They develop a hidden Markov model in which the stages of the household life cycle are taken as latent, unobservable states that are uncovered from the manifest household demographic profiles over the 34 years, assuming that households evolve through these latent stages following a first-order Markov process. The authors apply their results to classify members of another panel (Consumer Expenditure Survey) into life stages, which enables them to study the impact of the household life cycle on households’ budgetary allocations, providing a comprehensive analysis of lifestyles (through expenditure patterns) over the household life cycle.

Suggested Citation

Du, Rex Yuxing and Kamakura, Wagner A., Household Life Cycles and Lifestyles in the United States (2006). Kamakura, Wagner A., Household Life Cycles and Lifestyles in The United States, Journal of Marketing Research, Vol. XLIII (February 2006), 121-132, Available at SSRN: https://ssrn.com/abstract=2394095

Rex Yuxing Du (Contact Author)

University of Houston - C.T. Bauer College of Business ( email )

Houston, TX 77204-6021
United States

Wagner A. Kamakura

Rice University ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States
(713) 348-6307 (Phone)

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