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Ni 5 e ee atte 1 e N es 17 50 Ag 1 6 7 80 5 1 A 1 770 17515 7777 . 5 Ane 2 7 A7 yi ers F W eee. e 27992/7177 rela : n 5 er e 1 eee Kata e 3 5 4 4435 W eee 8 11155 . joey GEE OG Bek wah INH cet tees enter 2 e hi nne aa La eee, F e 18 5 e ee aici e a esate neve F e 94 8 . 35470 + 627 2 7252 falas 7 tyne rset 1 4% 1 0 peer 17 55 ie 1 e eee, i TOP PNA FLD „% ae UNIVERSITY OF ILLINOIS LIBRARY AT URSANA-CHAMPAIGN BOOKSTACKS Digitized by the Internet Archive in 2011 with funding from University of Illinois Urbana-Champaign http://www.archive.org/details/familydecisionma35ferb Faculty Working Papers College of Commerce and Business Administration University of Illinois at Urbana-Champaign FACULTY WORKING PAPERS College of Commerce and Business Administration University of Illinois at Urbana-Champaign December 16, 1971 Family Decision-Making and Economic Behavior Robert Ferber University of Illinois aaqind Sader Vr Jütte : „„ | qaigavaeiniehs esontaue bas dere Iu saath a8 K gelebten fe eee ku de e . Wet t gang. nd avez 2 glich et baa Feb e . gf ee ‘ sonia? guar’ | 7 alontiit oe qietavinv . Family Decision-Making and Economic Behavior Robert Ferber University of Illinois Maximization of consumer utility, or consumer welfare, subject to constraints on available resources has been the avowed objective of economics ever since its inception. The original approach, still used in much mathematical model building, was to assume that the individual acted as an “economic man", maximizing his utility subject only to rela- tive prices and to the constraint of his income or financial resources. Although this approach is still very useful as a first approximation, particularly in mathematical model building, it has long since been ree- ognized that individuals do not act on the basis of economic considerations alone, and that regardless whether an individual's set of utilities can be considered as rational from an economic point of view, many different considerations intervene between the formation of these utilities and their realization in the market place. These considerations involve not only economic factors but aiso a hoet of additional factors that lead into subareas of many of the other social sciences, especially sociology, social psychology and psychology. Conceptually, this de- velopment has been recognized by the increasing use of the term, "con- sumer behavior", to denote the study of the actions that consumers take and of the determinants of these actions. From a more concrete point of view, however, relatively little attention has been given to bringing together these various dimensions of consumer behavior within the framework of the family to provide more Ar ea eee ee aie) rh is ie 1 a 9 n . ; : | 1 sid ems, atoohitT i e — — il es 1 . 04 gods ankle . 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This oversight constitutes a major gap in economic research, and is unfortunate for at least two reasons. One is that the economic actions of the family constitute a very large part of consumer hehavior, for these actions encompass what families do in earning, spending and saving, as well as the decisions and the factors affecting decisions behind these actions. These deci- sions are motivated not only by economic variables but by a host of additional factors, such as goals and expectations, demographic charac- teristics, social structure, and the norms and values of society. Hence, understanding these decisions involves the introduction of vari- ables from many different fields. The second reason is that in each of these different fields infor- mation has been accumulating on family economic behavior. These studies are frequently very narrow and restricted, and even more frequently do not receive any attention from economists, partly because they are not done by economists or appear in economics publications. As will be shown in this paper, an appreciable amount of this type of information exists and needs to be brought together within a more general framework in the study of family economic behavior. Another facet of this subject is the impact that family economic behavior itself may have on the political and social structure of our society. That such behavior does have an impact is unquestioned, but the awareness and the study of the nature of this impact-are as yet only in the formative stages. In line with the foregoing comments, it is the objective of this paper to review consumer financial behavior with particular reference 1 4 esustaane> due oa. 79 eoetsoa eee 5 oat aads = 00 i ö daw vous acataon esd zo! ee ‘romeo 20 rag : 2 18. anotstaeb nit ea bien es ee dan antbaace santero wk ob 7 el uad ererres oed pod betete aa ze gate exeaaat to teod ry 10 aud noida. ateroness x6 dle aoe eee 5 N i moe | a oniqnagomeb debe basses, bs dees as dows desde 40 Werse to badet dan una ene bas swore lebte ‘ 180 ; ov 20 notsaubes2nt aa. eoviovat ene oab asad ebase . Higa Ws pen) snus tb: eran eden eben snens¥itb aos de dass at aad ah aoonex becss- | nokbuds onertt: +sokvadad ohweneas- ¢htee 110 aba lieus avd 4 ond e begeben oom nove: ne beser bow vertan Vi vis ton M vpn u, e cke wor dete sse d vse : 3 od Lu BA ek scarf dy de been mb adde 10 — eaten to eae? ata Re sevens oldsioarar as edge add ab 3 re! N ren A a ac ele sdguoxd od 05 een boa 6. rb n ad bn,jE ina ma vive onen Wenn baits vocal ads ‘at sootdvo aids 10 soon? . O 1% erg tatoo bas detto 0 a era an, Naess | | sud -borobrame pair 11 Sag ria wad sob olvaciaddovn zr ‘eine zv ae Sta bes Add to: exude naa 10 wen, nda be ae é 9 ye r == to saving and spending within a broad decision-making framework. Hopefully, this framework will allow for many different types of variables to be taken into account and will also serve as a basis for reviewing and synthesizing what has been done on this general subject and of highlighting principal areas where additional research is needed. At the same time, this framework should also help to show how the other papers in this Conference relate to the general topic 5 well as to each other. Taken together, it is hoped that the material presented at this Conference will help to illustrate the full dimensions of the study of family economic behavior and of the type of studies and approaches that offer the most promise for con- tributing to our knowledge of this subject. L _A Decision Framework The general approach taken in this paper is to consider the different types of decisions that enter into family saving and spending behavior, the manner in which they relate to each other, and what is known about each of these decisions from different disciplines. The broad interrelations are tied together by means of a simple framework, which serves as the basis for synthesizing what is and is not known about each type of decision rather than what has been studied of this subject in each discipline separately. Reviews of the latter type have been undertaken periodically; they are very useful in themselves and also provide part of the material for this paper. This framework is not meant to substitute for the much more elaborate decision frame- work developed in other studies.* The purpose of this framework is *For example, see Howard, J.A. and J. Sheth, The Theory of Buyer _ Behavior. New York: McGraw-Hill Book Co., 1970. re N vu 5 F ** 9 ‘ag at i io ab „ene gntiar-note so berg * . W ‘nis 5 f d gages: vas nel vun v0 weite Aw stronsiant 0145 ‘ 1e 2 ataed & a8 svtes ‘ool Shiwibna voss oa, moss og n {stensy etda 60 eno’ 580 dan 22 atitxtendsaye bas ib yt ee, torsos Isadora tbe rod, ba Laren rg aastgsttaie 3 1. bes 20 n en orte gung Wen b * oaas ads 7 — 2 62 al ohe wns a axaqag: wikis ois. tad begod ak an aden b edge done 6 aa 118 ‘ena „e 65 4 I sondzsined * qh betnosere 1 ‘ets 20 bar z vaded oon ah te couse 245/16 615 5 ses 90 eno ers ee ee es cen Stn 5 een ands 20 c- a0 65 xa ad webleao> 03 at — atds al outa —— leeres er 0 anthassn bar aalvse Aas ont genen daa enotetoeh: to anges 3 21 date bus odge dos oo ir ato ale 1 woa aad a 1 5 ear 18e Seen mor? eaotetosb ono tte done suodn « ’ 2 date a 0 ananl¹ yd xedsagos bora 9 bees kennt 6 unn 30% a n at dane gatsbaodveya 104 ae, ad. 0. „ ,⁰̈ i a a ad te botheas nod anil dade. mori A1 Hr bekenne to boys 8 ° in oq ‘senza! ails 10 8 ogg sattqioatt fons a 30 deus 9 sev owned mt auen wre bas mes, 8 e e pees ; ; ee sid? agen n 101 Lakes oat 10 ag aeg ont 7 gmat? ee „ard „aan don ods 08 onuabsadua 8 ees fit ae ee -at 8 2267 2 W en be sents „ 0 0. b AN N * 7 see te sada ae . bas bee a onen e * = = 3 solely to provide some structure to this review of a particular class of economic decisions, and for this purpose a relatively simple frame- work seems sufficient. The basis for our framework is segmentation of family economic decisions into two types — financial and non-financial. Financial decisions for the present purposes involve four principal types of decisions, namely money management, saving decisiong, spending deci- sions, and asset management (Figure 1). Non-financial decisions are most easily defined as including all other types of economic decisions. Since the focus of this paper is on financial decisions, it seems un- necessary to provide any further classification of non-financial de- cisions other than to point out that they cover 2 wide variety of decisions, including whether to have children, choice between work and leisure, choice of an occupation, and the decision of where to live .* Both financial and non-financial decisions are affected directly by the available financial resources of the family, by the objectives or goals of the family and by the attitudes of the family members. Objectives and attitudes encompass many different facets. Thus, objectives encompass both the material and the non-material goals of the family in the long run as well as in the short run, though from the point of view of this paper the material short run goals are likely to be more influential than any other type. The concept of attitudes refers not only to the expectations and outlook of the different *Such decisions are not devoid of financial consequences either, and in this sense the distinction between financial and non-financial decisions is by no means as clear-cut as is implied by Figure 1. The distinction is pertinent more in the sense that the primary (and con- .scious) focus is on financial variables in decisions of the former type. 1 J i 15 N be: Tate W es n i 3 1 ae ry 6 st 3 j 1 * N a a ian 15 * re * eee 5 ; . mit oa tax 10 2 eh — . a e > Tetonamdt -Eekoasats ~o0d bn Antohnals = 8 ows oat 2 2 e gaibasqe saphena gotvar — bea a ee 5 ‘ote i tatontot}-aol At ee deen en aa ‘ ot eb legs 20 vod 10 115 piithd nat: al bontiob v ; Cea on at se kakesb elan 4 al W abst 0 avaek» be ~ob imtaaint-00d x6 Hobteott teawlo sadn ebe ob RH 0 N ‘Yo weak gute a beres wis ges e so 62 madd dae 8 . sae noa aatods neab Lü el 4 ee gokbofoak ‘al ote i whee f “oa eee Jo nokniaob oft bas spozinquase 3. to eee „ N N . ö 1 ba “glapegt bessedtn 10 ncokaboot | fat oasas-pon kid — aod bovitostdo ads xe et ine wi? 20 bene tatonantd elne > ry 4. 8 + 87 9 chore diess att E aobudtaze 1 70 nisl aaa ad3 50 Lg u eden e 155 bees ee dec sebuaiaae bas 351330 to Lo e outs bem tabseded ods 6504 ee dns ug ows mon ois at 0 Low 1 0 a at 71 al é 2 N re va 470: n one barrel 15 ee aaa de woke 0 a rs bun 15 dees ont oa rertro “oe and 8 e 06110 odd 20 iets hi eke, od 5 Wao oe eld S DnνννεανU,⏑˖m ee 10 en dork wt g 1 Taka ᷑ ino Das intzonott ae eee ad: | ae em adt „ stg it yd batigqnt at aa duoezasts eh. aten e e Ares eee Ve Yo gb ot rade, Tage We oa asin oda 10 aer ‘ak e 00 atk 45 . i 255 Family developments Economic and political events | f f f n re 8 0 en „ Objectives decisions decisions a 7 8 Ps Family Work vs. — W spending “Saving sset size leisure management behavior behavior management Figure 1. Interrelation of Saving.and Spending Decisions a 1 0 „ nn e 5 5 3 8 a i 1 a N 2 a masa. OF baa eerst bases ned itt ‘al a 10 1 e eis qt er wot at lauen 1010. vovet *. ik 0 goons uuνỹ¹dt Astoasatt * ene b kes beetaebtw pesroqer a won atop aatmpaed Bl Ley ety 30 v. aia ar ett 5 om waotsag ts do fabowamh? bop atone ee W * . per ma es tir ates penne ; CORED ue de gg Tah 1 Dee a n e We ‘aoa 2 me ne gau v 10 NE saat . nk Cases 94 ual an A N ‘ 2 BOS a fc In another study, Honey and Smith note that 58 percent of students in home economics courses at Pennsylvania State Univer- sity reported, again as part of a larger questionnaire, that that their parents had a financial 1 Again, they do not indicate the nature of these financial plans. Moreover, in view of the very special nature of this sample, there can be no basis for making any inferences regarding the extent of financial planning in the general population. In another study, the existence of financial planning was reported among both middle and lower class families in Michigan, with the observation that housewives seemed to have more influence on the plan in the case of the lower class families. The sample, however, was very small, only 50 families, and it is not clear what was meant by a financial . That financial planning can play an important role in family economic welfare is suggested by two other studies from home eco- nomics. In one case, Honey reports in connection with a study of financial management by 426 farm families in Pennsylvania that a major source of dissatisfaction was lack of a finaneial plan where one did not r In the other case, Freeman and Due 5 Honey, R. R. and W.M. Smith, Jr., Family Financial Management Experiences, as reported by 179 College Students. Pennsylvania State College, School of Home Economics, Research Publications 113, 19525 * * Bortel, D. G. van and I. H. Gross, Comparison of Home Manage. ment in Two Socio-economic Groups. East Lansing: Michigan State College Agriculture Experiment Station Bulletin 240, 1952. *Honey, R. R., Family Financial Management Expertentes2’ aPennec sylvania State University, College of Home Economics, Research Publication 141, 1957. 20 n ae gods. 160 bien bos een xh 1 jane 1 93078 Aras 15 woes esse 2 ud rwseniaktesep bess ra 20 a 50 alas ik Jod ob voce 44 "ama, aeg * dog 1 ae nd r οαν, eee dean Sanz to —— adi. ptesd an od aad a5 ‘onus lee anda do dan Latooge viv N 10 3007x0 as sotbrages eee eas — ee eee Leet n aa N N sy getmnalg Intonsat? to ‘sonsiebne f chess | agitate ak ela aunts owok hata Abd he died gnome . somufinh nds syed on bansee bauen suds asked ö e a —— ‘nests remo oda. to seas aft ah ra Jon 1 21 sini tte oe En else case N diesel a yd a NIE AT aloe sn neee e NAI nso guitaantg labern sa es eee ag? ehre aedta ows yd bedseggin el wanton c huts 4 1 onkdsenwed NB eos toot, ee 900 a a . tad? sineviyennoy mt eel * ena asa. vd snowaganam 1 ung Lat 1 Jo A991 1 W fos 37 f N aud best nn ne taza 12 ah. anke * * ag fe cant Cad 4 — hs 5 eee lde eee E CLE an d ane l W f 7 93032 aagidsiIM n ee eee e „Kei oss Waris — a e e eee ee eee f 3 e aso to bod et ahha show from a case study of two farm families over 23 years how the different goals of these families led to very different ex- penditure and saving patterns over the e 1. Family Roles in Financial Decisions In contrast to the role of financial planning, the role of different family members in making financial decisions has been investigated fairly extensively, principally by home economists and sociologists, in different ways and often with conflicting results. In one of the more interesting studies, Schomaker, following a scheme originally advanced by Herbert Simon, classifies the financial decision into five steps — problem recognition, obser- vation and acquisition of information, deliberation, choice and action.” Studying the role of 100 farmers and their wives at each of these stages, she finds that financial problems were recognized half the time as a result of necessity and most of the rest of the time as a result of a growing need, with the husband mainly responsible for giving voice to this recognition. Infor- mation as a basis for solving the problem wes sought from a variety of sources, but primarily from people outside of the family and from magazines. More than two-thirds of the families discussed the problem among themselves and approximately three- fourths considered two or more alternative solutions. Both 0 . Freeman, R. C. and J. M. Due, "Influences of Goals on Family Financial Management", Journal of Home Economics, Vol. 53, June 1961, pp. 448-452. * * Schomaker, P. K., Financial Decision-Making as Reported by One Hundred Farm Families in Michigan. Unpublished Ph.D. thesis, Michigan State University, 1961. ee aes 00 aan snoketoob belsan 8 ne ee ia tdb “edatmoness sient ed beben (tisvtedasxs ais ban “aaboittnes rae neste ban “oper sno sshd at eee! me 1 a autvaftex eee aeg —— e a 0 ‘va Sa ola: stete dene een ad ‘bedeavow vilanigtre — esd ks tagen eiten —— . * ov aotakasb' , . bos onen veibers ales “ notsttotat 20 oka abupian bes 32 a xheds bus 0 bol 10 efor 8 gntybuse 1 wha — aan. dads AEB wile eee ode 86 Pre Ro ‘330m bre ya nn to itusss » 1. eal) 8112 Yas wont badi at 112 tw „ boon arenen * 1 luce 0 us c ety 7 2 j Seht oe es ‘ehh ot Ken daen 102 ebener Bato. Diguon’ saw melddsg ois yr 10 ‘atest 2 ee de E 4500 “anole 0 eee one 16 on basghtanwe soul „Le, 400 e e a. 11 re -15- practices as well as information seeking were more frequent among younger and better educated families. As to who made the final decision, it was reported to be the husband nearly sixty percent of the time and jointly about one-third of the time, the latter percentage being higher for families with younger heads. Age of head and education, inci- dentally, were also prime determinants of a tendency of a family to follow the five-step decision-making process. In a further analysis, it was found that satisfactory as distinct from unsatisfactory financial decisions were more likely to be characterized by more frequent consultation of sources of information and of people outside the family, more discussion of the problem within the family, and consideration of a larger number of alternative solutions. On the other hand, the explicit use of decision-making was not found to be overly frequent in another study of farm families in New York State. In this study only one-third of the sample of farm families were found to use consciously the various deci- sion-making steps such as those outlined by schonaker. Like many other studies of this type, the sample was highly specialized, and was further 55 to couples where both the husband and wife were willing to cooperate, so that the results are best treated as hypotheses for future study. 1 P. K. and A.C. Thorpe, Financial Decision-Making as Reported by Farm Families in Michigan", Quarterly Bulletin, Michigan State University, Vol. 46, November 1963. * * Dix, L. C., Decision-Making in the Farm Family, unpublished Master's thesis, Cornell University, 1957. hee f ae ‘ aN 2 h Ww * 1 . 0 a a ‘ { 4 x pitas InSupes? eyom H 8 aohteero.ak = she | . Lhe), naib 4020 bap be bee e hou foe ena Gn aan ual aes Ga | uod Wann bas oats ata, to digoreq yale fase | | | = tadgitt gated aun 50 10 og n an Rot eg | peered bas bad 0 sgh esd N ins #20 vonsband a to Sagan teln asd, akg Gals paw 2 168 rr nat i note Rg e- og w 116 et eee Jad bol ane, ot ahevlagn er * S whew: wirobanoab ntact eee . neotuos to. eee e dns! S er: ; ‘Se ootaauoarh rm e ond, sbtasuo. aigeag 10 Bead ee wie ae }tariebtecos Pe „e ee ab @ . nA * anodaulos evisaciedia, 8 enn gutian-ntatoah % sew trollany oda, ebro ad alae a aatllan’ era) 10 ybate tedious mt Insupstt) e 0 n 0 batdy-ane dine bun ad at ee aer . n ö ‘ rob avaltay ody, 1 93 Dt: stay nen eee d beatisuo sad! 4 lend , VII ma sam „Lan HH „ een ards 30 ebase rede wae 2 ont; dros H eefqued od: bedortaays eden 6e bas 4 f tuns al va on ee ͥ⁰e as aa iow ere b * vy ee a saw? 102 dncadtoned neat ente gige been ceersaith Ba Ke yh on 72 yt eee ok, 1 120 Tm N —16— A very different view of decision making is provided in one of the Detroit area studies, from which the authors, Blood and Wolfe, generalized: "The economic function of the family is therefore primarily the husband's function. Even when the wife works, the reasons why she works and the relative permanence of her work reflects his career ... Her job uniquely is to bear the Shildcen...' This was one of the very few studies based on a broad probability-type sample, covering urban and suburban as well as farm families in the Detroit area. A similar view is encountered in a factor analysis of re- plies obtained from husbands and wives in a more general study of their roles and relation to each other. In this study, Thorp finds a factor that reflects the traditional division of influence, with the husband having the main responsibility for earning money and the wife for running the household and raising children. However, the questions used in the study were very general and little attention was given to individual types of financial de- cisions. Whether for this or other reasons, these views differ sub- stantially from the findings of other studies (and would also not exactly make the authors popular among women's lib groups). In- deed, about the only supporting evidence is the finding of various “Blood, R. and D.M. Wolfe, Husbands and Wives and America: Dynamics of Married Life. Glencoe, Illinois: Free Press, 1963, B * * Thorp, R. C., "Dimensions of Marriage Roles", Marriage and Family Living, Vol. 25, Nov. 1963, pp. 389-404. a 04 és we satus pie 90K 1 vi ene aad e 6 no bowad erbse wit er itt Ve ba 0 r ab outen, ban ad andes beide. sqeenetticadona | 4 sere! 210810 al 1 nes e aa ta ex 0 stoyfann hee 1 * batedendans “ak r elek. a deu tarsses ‘pion „ 0b ba: vine moa bemtiade Ww F gor 406536 ais 11 . eta fone 1 dotvasar baw le 2 anαν,, 10 fokeivi® Laras bas * ax thes anti 203088 ee | eno — ae vit tah eaoqass ar a greet bon Jeu ne W able aber beta biadeada on peters 402 1 ak: Side 1580 Nov sis! ebute add 4 teu eee ‘ait 5 yor ob farasent? 10 ote? dabei od 3 wav soba 1 > jon’ cate ' ue boa) ask bers hats 5 te duigen - a isos 1 „e e e dan gen ‘kerb wrote ails stun okie to ne a2 ie onastiye estan i a suo . 3 ‘bem, woh . mea som ‘ 14 i cael ae S aN Ns 2 KA Ree 1 A ok : W “aa ne orn aig home economists projects that the wife makes most of the household decisions, that is, decisions that pertain purely to household activities and to shopping. On the other side of the fence, Wilkening finds that joint. involvement in five types of farm and home financial decisions among 614 Wisconsin farmers and their wives characterized nearly 40 percent of those with farm incomes under $6,000 and over $9,000, and half of those with incomes in the middle prackees Wilkening- also found that the wife's involvement decreased as the farm was more commercialized and increased among families with more debt or where the wife was more socially active. Further evidence that joint decision-making is frequent among farm families was produced in a study by Honey, Britton and Hotchkiss who reported that their interviews with 252 rural Pennsylvania families indicated that wives and husbands generally followed the practice of talking over financial matters and making decisions 8 There is also some evidence that among younger families at least, wives have substantial influence in financial decisions. “as an example, see Davis, M.J., Decision-Making in Relation to the Performance of Household Activities in New York State Homes. Unpublished Ph.D. dissertation, Cornell University, 1957. Of these types of decisions, 85 percent were reported as made by the housewife alone. * *“wilkening, E. A., "Joint Decision-Making in Farm Families", American Sociological Review, Vol. 23, April 1958, pp. 187-192. — R. R., V. Britton and A. 8. Hotchkias, Decision-Making in the Use of Family Financial Resources. Pennsylvania State University, College of Home Economics, Research Publication 163, 1959. * biadsaved itt te 9 . ear 56 ee 8 voten anos@boab ftaroasard sod bas sve Py sean avid, ot 8 55 . ae ban eee eee f 000 eh novo baa 909, a abou eee wud . woot Ae. a > 5 bl bi . . eee otbbie oul nt eee date hats de abu a8 dz de bosng rosb dnss tn a i ots ands § 2b % b ent iden? anos besser bas ‘bomkiaton % Vietdese oxtel 8 an ui ads balk nagar vaso 70 woes 0 ak enen „ e 5 f tess ger adie eee 1180 gets bestoynt ae ess abrradaw ban eve init psdenthal „en n 115 ara Entonsntt 10 garded ha ieder nt 8 n * race ela kaeb 3 2 anki tas copa dene anda veel o cake oo „obekest Eatoanat? ah oom Tiat Intrenet avai 2 . mtd elktuectnc sect en, ern 225 are na wt mpeg NZOY wort wk neta hs anger Caer, ywiersvie! Lflogte) ne 3 et 22 N bam an . a Fade ts venotel 10 . . * aft 8 Oa to eer "darian ari nh „ sakot!t crane * 76467 qh 7 e uf * 0706 244 bus 293545 1 ey ee aon NR 00. -18- Thus, in one e undergraduate married couples were ob- served while they made the decision on how to spend a hypotheti- cal gift of $300, the most frequent occurrence (56 percent of the time) was for both husband and wife to have about equal de- grees of influence. Although this is somewhat of an artificial 08 (though the author attempts to demonstrate the real is tic nature of the experiment), it is especially interesting to note that, based on prior reports by the couples, the husbands generally had less Influence than had been anticipated by either member. As we shall see later, joint decision-making characterizes many different aspects of family financial behavior, though to ‘different extents varying with the nature of the problem. It is a phenomenon of interest not only in a financial sense but has been studied in its broader aspects by family sociologists in some detail. Among other things, these studies seem to show rather conclusively that joint decision-making is likely to be associated with satisfaction in marriage, especially when age * * and education of the couple are held constant. IV. Money Management 4! To modify a framework suggested by Kyrk five alternative procedures would seem to exist from the point of view of the * Kenkel, V. F., ‘Influence Differentiation in Family Decision- Making", Sociology and Social Research, Vol. 42, September- October 1957, pp. 18-25. * * A number of these studies is summarized in Farber, Bernard, Family Organization and Interaction. San Francisco: Chandler Publishing Co., 1964, pp. 299-300. fer, H., op.cit., Chapter 16. 1 i i a 820% oe bang benen nsaubergebi nee e see 1 eee a baaas, 1 wort 0, ‘notetoab ot abe vata ota Ro nnen 02) Seas sehen Tom, 0 „ct to, pt wab Laupe suods. e of hte bow beine yee 705 . tent an RO ere ink . dgueda ta eee a | | elles eee 92 pi gneiss add sats cg oF gab qiinkeges ac ot „Genes on ai age: 3 beds ni2 yeakquos ach yd a}zoqer 105g ao. baad 1 . 75 zeige ru betegtotoas ned bad, mat panegDiat alee x oS an) one ebe ende 3 785“ et hes pe a ean a 198 ane ele eden; tna? Yo te eee b „ ee e eee e —— du anon. vegas nk. a at ytab zen e re ze 1 5 wollte. tha ed ago . ads 15 155 5 ae 0 moss wal bug 8 eat de 0 %% deb od 84 jploater wt an biae-moralosb sito lat x N age asche elinigeges debe at pobiastengae. Bre wr “* vpe anos beg 5 elcbes fe l oot wean bade ov, Nees vé ebene nene “pd, 70 0 Ya e it ay ate 3 Aas} Shey | abet ‘sui’ ab Nee 80 700 15 1050 5 eee ‘ete Renton eli allocation of the money management function between husbands and wives.* a. The husband doles out the funds to the wife as needed, and he usually pays the bilis. b. The husband gives the wife a regular allowance which she ' uses for specific purposes and he uses the rest. e. The wife receives the entire income either directly or by the husband turning his pay over to her, she gives him an allowance and uses the rest. d. The wife receives the entire income, doles out funds to the husband as needed and she usually pays the bills. 85 The husband and wife decide jointly at the start (or end) of every pay period how the money should be spent and each then assumes a specific task. The first two alternatives represent a form of patriarchal system and the second two a form of matriarchal system. The available evidence indicates that, as might be expected, the patriarchal system has dominated in the past, especially among older people. In a study in England, for example, .Young found that wives generally did not know what their husbands earned.** Indeed, among people aged 65 and over in a working class in East London, Townsend found that not only did few wives (7 of 45) know what their *The entire focus on this subject in the literature seems to have been on husband-wife relationships. The cases where there may be only one such member with children or other relatives present does not seem to have been considered and would seem to be another area for future study. *kYoung, M., "Distribution of Income Within the Family," British Journal of Sociology, Vol. 3, December 1952, pp. 305-321. se ee ae ea ; | N 0 0 “ for ds beter PION, $F eee 0 9 t, : via * tao . ets od bag . N *. 1 ae 1 eee ele ee ie ods cede le v. 1 5 — ee i 10 ee eae 1260 aa ren ae ahd aims bade | inom 605 4 b a ce e 4141 ‘it 6% beet ae bes Ass ah e “Gas 10) asad 64 0 aaa os bane 0. „ e Masui in nae 5 eee. Nea eee to ee 4 wessen ee oe wee dea 1 . bases see N be (alms 204 san git at bose 2 * ee ; Wt, be abemdecett Woch acy went 10 “Bab, gehe avi od ued, e eds wh . ae aD | ae as wT) on _ stadt ee eee ont legkdenokieler ptiw-Baad a: : eee ee heyy. Ny nea Lhe ee rt 5 e ad 0 lanai ‘igen, ‘bare, e \ 12 251 lers, 1 edt 1 Ab „ e A Lot d een aeg =20= husbands earned, but "many did not think they had a right to knew". The usual procedure among those families was a clear division of labor along the lines of alternative (b), with the wife having a preset allowance (and with no excesses allowed!) and also having the responsibility of paying the bills. When the husband retired, however, and if he were overtaken by illness, Townsend notes that the wife then usually became the major financial influence and the procedure was modified so that each of them had their own allowance. For the United States, such evidence as is available suggests that decisions regarding money management are more likely to be made on a joint basis while the accounting and record-keeping is more likely to be looked after by the wife. Thus, in her study of 60 young rural couples in New York State, Wells found that responsibilities tended to be shared on a joint basis for fami- lies married fairly recently and that these responsibilities tended to be shifted to individual members as the number of years married inereeseds. Similarly, the frequency of account keeping and budgeting tended to decline as the number of years married increased. In another study of farm husbands and wives, this time in Wisconsin, Wilkening and Bharadwaj state that “while the division of labor between farm and household was expected, the division *Townsend, Peter, The Family Life of Old People. London: Routledge & Kegan, Paul, 1961, p. 68. K*. Wells, H. L., op.cit. 15 . a sia „ ba e in e W bie 0e 5 ee fe ebene ait Asti 50 i ry 1 U * ap a NN ; | ebe otdattars 5 en ren “oun 8 ees reat i Wt, ö i 0 a et wk 5 ase shu. bonoa pub anges bote at be dana BO ansage wat whiten, ntaad aniba 1 dne ven ak smut abe oe w sasha batool eg of ‘sabi hidbenogeas odd 75 bem wiese tiated ee ; i prin s Fy Aree 1 a arnt Yo! dcn il 6 eden debe na 8 ba 85 ~ . 1 anden abo te aero nad tet “shower oad ynbbeneth ost 5 . > sos bm oye of labor within the family area between husband wife suggests that responsibility for family tasks follows the interest and availability of the spouses rather than following traditional role expectations that the women ought to be responsible for all household tasks. * In particular, the investigators found that the wives tended to take a very active role in money management and generally looked after keeping track of money, paying bills and keeping farm records. An interesting relationship between account keeping and budgeting is suggested by Wells in her Pad She notes that among families that budgeted, more wives than husbands kept account records, while among families that did not prepare any budgets account records were kept more often either by both hus- band and wife or by the husband only. Although the sample was very small (60 families), there is some indication that joint participation in the financial planning process was more likely to lead to sharing of knowledge on the family finances and, as a result, to the wife taking charge of the financial records. At the same time, it shculd be noted that this sample was re- stricted to cooperative younger families where both husband and wife were willing to be interviewed. In a broader coverage study made about the same time, for example, Morse found that only 51 "Witkentap, E. A. and Bharadwaj, L., "Dimensions of Aspira- tions, Work Roles and Decision-Making of Farm Husbands and Wives in Wisconsin", Journal of Marriage and the Family, Vol. 29, November 1967, p. 711. * . Wells, H. L., op.cit. | 56516 91% ore dena era ran \ att eite od ben ee oils wwollo? Stat Ih Be i tanola thexd anitwoLtot un ale 50800 alts 20 9 ae : te 30} alddanoqoar od 29, Jag nom oad! daddy ano me Asia. Dude 0 16 hd 011 618 1014406 . stats bs “goaseganas nom Ak slox 1295 ve * sad oF babs it | allie. audyag cao ‘Yo Aenzz Zak 10 33 hadool ¢ i | e das recen T,,?z ene anden an 0s dene yada %% oda” . wass 251 at aten vd booniggua ak § Pred abaedeudt Ant e sro, basegbud sine sorts gl 7 e ede Sn a gl te se . en 70 ee vella ke iad 10 „n %% 100 bash 2550 . gaw sigmae aria b c aie baadeud oid td Fo ie i dart snes nod tworbat daes eh ad „nens 06h k. ite e d Basn0%q Sat Ang tatonaar 80 aK a b d. hee wooan’ Ua adi Be dgbsfword Ye anbau 155 1 engen Waal! wits te gets an; 1 wits 05 . 4 * ann ots whit. eels boson, od Hol * „ dass 5 5. bon bandaind dtod ehe 20 inen rogue avs eioqoos or ; Wee 1 2 4 e oi 1 222 percent of a sample of 527 rural families in Kansas were keeping account records, the wives keeping these records in two-thirds of the families and the husbands in the oe Of three studies that provided information on money manage- ment in urban areas, two were conducted at Michigan and these yielded roughly similar results. The questions related to keeping track of money and bilis, or of paying bills, and the findings on which member of the couple. has the main influence are as fallows; ** Study Husband Joint Wife Other Detroit Area Study, 1955 26% 34 40 —— (Sharp and Mott) Nationwide, 1954 272 28 40 5 (Wolgast) Peoria-Decatur, 1968 36% 29 34 1 (Ferber and Nicosia) In other words, the wife seemed to carry this responsibility most of the time but in a substantial number of families the res- ponsibility was either shared or looked after by the husband. Sharp and Mott also note that the husband is likely to carry this responsibility more often and the wife less often among higher income families. The Peoria-Decatur panel of young a Morse, R.L.D., “Family Financial Security: Survey of Kansas Rural Families", Journal of Home Economics, Vol. 54, October 1962, pp. 711-713. Tae first two were cited in previous footnotes. It should be noted that the Sharp and Mott question asked who had more of the influence rather than the Wolgast approach of asked for who made the decision. The third is from unpublished data of a panel of young married couples in Decatur and Peoria, Illinois, inter- viewed about every six months since the Fall of 1968 and relates to "who usually looks after paying bills?". oh “gatas or bog t e ar ene „ eie, ee N ben 0 bos ltr ate 30 80 unkind bo, ani 1 pod on us bus vad e 443 oat eee oe, 5 red a 1 - 60 NN muss *. cw agg N ‘ee pee vn e PY ate | Ae: E Bae, bessa a . n e aS i) i pe Io cot ee bau * Ae sacl. e ne jem abe oe „ i oa; ' bfwrode 7 . oke nt, bi Yo ec het ode Penne c Tau dae che 1% Backen 1 ere n. teneq n 1 woab heded e n- oer “ek ae mh tn T ,abvost bok cee ae e Un Das 8054 70 fiat edd: nt pitt n b ane 4 ate 2 married couples, however, suggests that husbands generally carried a larger share of this burden than wives. Whether this difference is due to the nature of the sample, location or different time period can not be ascertained. The extent to which other family members participate in these tasks is hardly noted in the literature. Indeed, the focus of virtually all these other studies was such as to exclude the possibility of obtaining such information. Of the studies cited-in this section, only Wolgast apparently left provision for other family members to have influence on various decisions, and she finds, in fact, that in 5 percent of the famiiies members other than the wife or the husband were responsible for keeping track of money and paying bills. An interesting corroboration of this percentage is provided by the study of Honey and Smith based on reports obtained from home economics students, where 5 percent of these students reported that they had kept expense * records while at home. V. Spending Decisions In accordance with the outline presented earlier for this section, attention will be given first to family roles in deci- sions relating to the purchase of products, primarily to husband- wife roles, and second to family roles in decisions related to product attributes, particularly to the brand. Tt should be stressed that this section makes no pretense at covering the ex- tensive literature, mainly from marketing and home economics, * Honey and Smith, op.cit. 4 10 et ; ip ma 4 1 ha tid N baitias aliens ndnd jad eme eee 3 f aeg 15 haa. vation “ote angi wird, ani, te 5 f dans 21% 11h 20 warste ee aud 0 andan oda alts | 9 nenden ‘a 500 6b 4 seta ks va vedas ttm 70h oka od snare at 1 ads ddr eue bs nt base trait ate ae 2 ‘shoes of aa bus nen wende, 0000 oad tts lane fe 450 bes ody 20 eee w ale rasde Yo adie . cake rend Star As naa: ren vos wottons 4143 3 g eee leb orte no eee en en ere dae ‘Lined 3 erodes een ott to e E ak 3505 ido? at aba af “anton 107 ek diacoqaes en bas daun wt 10 ea ody 2 pol saxoda7702 ynkzaetednt * 44440 „0b bus Dan 0 5 date ‘hoe woe Yo those aes w babivorg at — a ; we n W S wor? bontaade esroqes a ae: i — sae bad cant did bezogen 0 esd? Ye 30 0 an e ; en . R . E atdt tot 260 dennen Aae an Atte coat det, nt: dn Aue 0 and nai, od Le sottass as 380 5) wie) ie dd 7 Wan eee 10 ee 9 bai naa * 1 iw: ‘os 8576193 belege a sig? unn 05 dees 1 ier ote yi oi, aes a ‘od bios 21 bse ode oJ lana aang eee 99 bo: n 1 405 ‘aztrewes 30 e eg on ose tees olay . | be ata ih aig 1 emo bas satan sate ay ve sere 0 1 e hs 1 24 dealing with the determinants of buyer behavior and the means of forecasting such behavior. Besides being outside the scope of this paper, that literature has been reviewed in a number of * other sources. Variables from these more general reviews are brought in when they relate to family decision-making in regard to spending behavior. 1. Marital. Roles in Spending Behavior At least two general hypotheses have been advanced to explain the role of husband and wife in influencing spending in different families. Bott suggested that the extent to which families do things jointly, such as spending money, depends on the "connected- ness of their social network, that is, whether husband and wife we : have the same friends and move in the same circles. Connected ness is said to be more prevalent if the family has low mobility, lives in a fairly homogeneous neighborhood, and the husband is in the working (blue collar) class. Taking a somewhat different approach, Komarovsky advances the idea, based on examination of various empirical studies, that * See, for example, Britt, 8. H., ed., Consumer Behavior in Theory and Action. New York: John Wiley & Sons, 1970; Arndt, Johan, ed., Insights into Consumer Behavior. Boston: Allyn & Bacon, 1968; Engel, J. F., D. T. Kollat and R. D. Blackwell, gen- sumer Behavior. New York: Holt, Rinehart & Winston, 1968; Sheth, J.N., "A Review of Buyer Behavior", Management Science, Vol. 13, August 1967, pp. B718-B757; Burk, M.C., "Survey of Interpretations of Consumer Behavior by Social Scientists in the Postwar Period", Journal of Farm Economics, Vol. 49, February 1967, pp. 1-31; May, F.E., "Buyer Behavior: Some Research Findings", Journal of Business, Vol. 38, October 1965, pp. 379-396. ke Bott, E., “Urban Families: Conjugal Roles and Social Net- Works", Human Relations, Vol. 8, 1955, pp. 345-384. 5 sbeizasndos! dn ab’ wbinege 0d banged An ta Jeee~ore a4 der wee BE «tov „en de eee ad? ee ales aste 0e dee 9 to radia u nk, besen coed! ad ieaawinaht Soild . * 4 en been iereavg stom vane? wot ass tial Ws i 1 ben, an! aebina-ootedsib vite? oe u N aa. a a ate lax ot bebcevbs med a e000 Teng G a 6415 2 aufn 60h nt 10 bus beste 30 to a ob Ska dae od lege a Jute hoddaigguy 80 a 1 i a ay “oth bi e va anit (dro) ab Tabada thei 40 _speananey * * dotorks ‘ome off ak! vem bow’ abot sY dae pyshbedom wor sail VII % A1 Jed «tom ed’ od Shae’ at tina dawnt oda bus eee evoumngomed az ws ate Cruktes bel ae a sched wlevotadat none sores SERIE — 4 § 8 ebe faotitque auntisy, te oolzsaacee 0 babed | ? ; — ae r f N yD: PT. ‘ 1. 2 hee e 201 ** A erden eee N ve We r id eho big. S Nl saodeot Pate. Meth 238 ioe * N. 5 rn my ‘ban “ini Lod 12 5 div N 1 ag 760 89 ο,nua A tent (stow leet y „ “rotvedsl seul 16 10 e „ e eee RENE BANG e W _ ak atze Takao® * N Tee Bo 1 mito raden 15 en tetnos let ssen Hes ie Serbe swith ta 4 1 40% ry 225. "there is greater autonomy with regard to expenditures at the bottom and at the top of the socioeconomic hierarchy than among the middle elasses".” The studies that she examined tend to support the fact that the wife in the lower socioeconomic classes seems to have greater influence in decision-making with regard to expenditures. In addition, in all social classes she finds a higher rate of joint decision-making on spending among young couples. A roughly similar point of view is taken by Barton, who argues that, based on marketing research observations, housewives 45 years of age and over tend to have accumulate sufficient ex- perience so that they can act essentially as a professional pur- chasing agent for the family, even with regard to men's clothes and furnishings; and they know the needs of their family well enough so that consultation is much less likely to be „ The empirical studies of these questions have taken many different forms and, not surprisingly, yield results that are not always compatible. In one of the earlier studies of this subject, based In the replies of marketing students in seven universities about their parents' behavior, Converse and Crawford estimated the percent of purchases made by various family mem bers as well as the percent of purchases influenced by women, * Komarovsky, Mirra, Class Differences in Family Decision- Making in Expenditures", in N. N. Foote, ed., Household Decision- Making. New York: NYU Press, 1961, p. 260. * s Barton, S.G., "The Life Cycle and Buying Patterns", in L. H. Clark, ed., The Life Cycle and Consumer Behavior. New York: NYU Press, 1955, pp. 53-57. ; ts bo, oosuatbinges on bape iy yeombaue ace. b ab bx —B= m en bass bantmexs ode 3043 as dhe or gn cae sun eum ea ko os i n a . abu yadalinehobetoob nk eomouliat zg end 03 a bak oie se 10 fa tees 1 u .noka2bba Al” 6 gau rome sarbasqa % gatiemnotatosb bet 10 ae N 5 N f 1 o „0h in yd, nens en e wie- agen g soviwasuod . de Suan de dovasnex Batga dan mo bound , a | eee, eiten eus in des e le ag 30 | mig dae seg Bend B ab ls kagsese Jom dae Voda gat 0 a 2 eee anner ane ei e me, enn nee . . wen een en seatseaup sei de cines desk art ota ee eee bloty eee 0 —— — 6140 40 15025 retives edd to ano at enn — abe at exnebuya act sedan te eatiqen: ‘eft 80 heasd . ‘ bxotward bas surevnad.., xokveded dend atest dee, ae, 5 e len? svoliny yt bas somatomig Ro passed 4g f 1 eee ied e e 20 aue dan e. tow wa et „ tian a „ n N ~netetoed Miese ? e . Nan om mt . th seo walt Ae vo. 28 men and children, by product category. They find that men make most purchases of their own clothing and toilet articles, hard- ware, cars and gas and oil; women of their clothing and children's clothing and of home furnishings; while children are important only with regard to their own clothing purchases. They also find that joint purchases are in the majority only for furniture and that joint shopping and 43 79 influence tend to be lower among low-income families. Another study based on interviews with parents corroborates some of the Converse and Crawford findings in that furniture and household equipment purchases were planned on a joint basis approximately 75 percent of the time and that children usually participated with the parents only in buying their (children's) clothing. In her study, however, Wolgast noted that joint de- cisions on the purchase of household goods were reported only 54 percent of the time, while Sharp and Mott reported joint de- cisions on a major item such as the selection of a house or an apartment only 58 percent of the time. It will be recalled, however, that the data in the latter study were obtained from the wife in every case. On the basis of these various studies, one may infer that a tendency toward increased joint decision-making with regard to purchases is likely to characterize younger families, those € 5 Converse, P. D. and C. M. Crawford, "Family Buying: Who Does It? Who Influences It?, Current Economic Comment, Vol. 11, November 1949, pp. 38-50. van Syckle, Carla, Practices Followed by Consumers in Buying "Large Expenditure" Items of Clothing, Furniture and Equipment. East Lansing; Michigan State Agricultural Experi- ment Station Bulletin 222, 1951. | 0 ALL e eee, eee eee e he en uno trains edt ob a8, pe ; i D wet o bred decent et bas aakagods e f 1 te ‘eegarorioss09 dae a bees! 20 Soma wee g ba tO asia nk gather? rere bug ene ueg ot 3 * 9160 beret N ben ox dean age vt taua nenbb td aoa bas oats 405 49 rasend ec 8 enon 1b. unt * vine. eee 05 8 ‘th “ob: sakot ted: baton, BvL evg e adi a — Ine betzoqex atew ab biodoawod Aa. sanding nla a0, ; ob datot borgen Jat bes amas l e at io. he 10 nod & 10 angetan odo aA re ad votes ® ao. et Leer af: So bye 4a, soma 5 30 deen ue 425 out yee en i 2 families 10 have been married a very short time, middle-class families, and also those purchases where a substantial outlay relative to family income may be involved. In addition, Granbois hypothesizes that joint participation in the purchase decision process “will vary directly with the degree in which they (family members) directly engage in use of the product" and is more likely "the more nearly equal the contribution of resources such as income, education, and social participation by husbands and wives...". Perhaps the single purchase decision studied most often with regard to husband-wife roles is the auto purchase, and here too the findings are somewhat different. In her study, Wolgest reported that the timing of the car purchase was set by the husband in more than half the families, and jointly in another 28 percent of the cases. Sharp and Mott report that in the purchase of the family car the husband had the greater in- fluence 70 percent of the time and that the decision was made jointly 25 percent of the time, with the dominance of the hus- band becoming more frequent as income rose. On the other hand, Davis, in a study of 211 French-speaking Catholic families in and around Quebec City, found that the relative influence in seven different types of auto purchase de- eis ons (such as when, where, how much, make, etc.) varied sub- stantially within the family, with the main influence being *cranbois, D.H., "Decision Processes for Major Durable Goods", in Fisk, George, ed., New Essays on Marketing Theory. Boston: Allyn & Bacon, 1971, pp. 172-205. The quotations are from pages 196-197. 1 1 ne 1 » —— : “al, , aires subs oss ak ony 1 N e mn 4 vonn to noljudtasaos ol Lauge ü 10 ea bas abme dai dt sotaegtotizag 1 rae bas eee 1 . 1 . 3000 1 bete lee eue, sal 25 5 | 1 oννj ‘eau aay aE ter ot te-bandaost 99 toute ted 1 ee adhs. ann egarbri® rie jee ew sesdomg 189 da 10 znkats sad : Sais "poston Sang nh gisatot bun eee ots ated aud on 1 baus da at gna 37004 490K bas we eee oid n ‘adie 1235 ves ng oti bed bon deva e 705 etna odd 10 1 ny ebe une polaiosb alls snd bas — 5 Yo dee or Pee aon ats 10 boch ott ‘ihe 15 4 10 ee es 4 “anor ‘soon as re som pa re — HS Yo vue 1 AKE vd «band 110 “a * 1 EW as 8660 bels bene! eld d0deu9 hacen bas ok Santi 2 ee “sb eee baue 50 per deres Posie a. a ~28- exerted either by the husband or the husband and wife together.” A similar finding was reported by Jaffe and Senft. On the basis of a study of ten different products conducted by personal interviews with one or more members of 300 middle income house- holds in Hartford, Cleveland and Seattle, they find that husband- wife roles vary substantially depending partly on the product and partly on the stage in the consumption pecans a. | They also found, as had Converse and Crawford, that the husband was more important than originally thought in the selection and the pur- chase of many of these products. Two ether very different studies tend to support the hypo- thesis that husband and wife roles vary substantially with the particular type of decision, and that many different decisions may underly a particular purchase. In one such case, Cahalan re- ports on a study conducted by interviewing husbands and wives initially together to obtain facts on purchases, and later inter- viewing them separately for their opinions. While the wife was more influential in deciding whether to consider buying major appliances and in thinking about spending money, the husband * ; ; 5 Davis, H. L., "Determinants of Marital Roles in Consumer Purchase Decisions", unpublished working paper, Graduate School of Business, University of Chicago, October 1970. 1 L. J. and H. Senft, The Roles of Husbands and Wives in Purchas ing Decisions", in Adler, Lee and Irvin Crespi, eds ., Attitude Research at Sea. Chicago: American Marketing Associa- tion, 1966, pp. 95-110. The stages in the consumption process used were information gathering, latent (initiator) stage, pur- chase, use, consolidation. e i * rege ola bun handowd 3 10 had ads 20 dense be 15 : “ett, 0 2408 ban ottet ed. bagttoga'x an ankbedd, baue 4 Lange reg xd betovdaos stavberq are dr aus 20 une 6 to at Sead eat aibbia Oot ta: Seen wed 26 ge sty: Tas deud ang bald on? 00 bas baslovalo Wen nt a N ee Wing, 8700 (ital gende dun v Fs 1 on “oats godt) e020 aoksgnoenoo ans ut agate ang g 1 hm sw ban deu od? “ands «browns? dna Sage bad * 8 ba * aug oll baw e arty ad biti Wann nad ee saad? to) on et odd ages of babs ele anaxolPtb. Bos nde ada date viistiassadve yrav soles „nge bas bac dau sad e age b La teria bas okatoeb to sae. | “eae alen : doug en pt spend sofuatimed ». ory hae ab cg deu goiweteresar xd bog ee A 00 enn 5026 bus eden im avoet ntasde. 03 eee. N a othw ada c ,acolntqg xtedy x03, cosesagon, ands g vol aku eee od vz gathioeb at amelie f vi bondaud de een e uod Aa * ban Koad’, Siunbard age erk pw e en del 25 e ate 76 ain b bead’ ee mare” 1088 8 i 2 27 e eee ee bas aod ab „notte e eee 5 20 ⁰ — ann, e e ak ne r e % 676 . ee Bar N Hs i ö * her 5 mein} a eee ann Roan Lee 2 NN. ie i 1 oh 1 N W dd “yy dee 1 e a 1 9 W e 29 seemed to be more influential in the purchase decision and in whether to consider buying a new car. He also finds that hus- bands in high status families tend to be more frequently dominant than husbands in low status families. In the other study, which relates to 12 different aspects of car and furniture purchase decisions of 100 families in Chicago suburbs, Harry Davis finds that the decision roles in the purchase of a car are not related to decision roles in the purchase of 1 Moreover, for the same family, Davis advances the rather surprising hypothesis that the relative influence in "product selection" (model, make, color) was unrelated to the relative influence of that member in "allocation" or "scheduling" (how much or when to buy). This result may not be too surprising in view of the growing literature in the consumer marketing area to the effect that people who are opinion leaders in one sense are not necessarily opinion leaders in another 3 This Is true even though It also seems to be true that opinion leaders in accepting Innova- tions relating to household goods are more likely to be younger people, well-educated, married with children, and with higher * Cahalan, Don, "Comments", in N. N. Foote, ed., Household Decision-Making. New York: NYU Press, 1961, pp. 225-228. aK Davis, H.L., "Dimensions of Marital Roles in Consumer Decision-Making", Journal of Marketing Research, Vol. 7, May 1970, pp. 168-177. Wag C. V. and J. L. Summers, "Overlap of Opinion Leadership across Consumer Product Categories", Journal of Marketing Research, Vol. 7, February 1970, pp. 43-50. ive tees a i j . l er rey anne. y 5 1 { ous 1 15 * ; ng . 1 4 1 va g ray 1h) i } *. o den onan dat el be westen ody e. sate ad . .de ak kiste bor Bs anvtabset 1 masken 5 Ss e ont at au lox’ Bobath wits Jan abet eld cn. to een ada mr tates aokakoab 09 Wan jon ar arts saveavbe Av ae 1184 . ods 2 eve ven . 14 mt nana eiae en adi, 1d: atoadsoqed gabatequile % n 93 beth funny naw “Grol fon" n tobom) —— ‘aut 05 * elbe 705 "aaaiog 4 —— ‘sale to soap lias ove ee | 0d 03 se 10 Aone’ anke ant Yo Vet nt ak atrczus oo 0 0 ena 06 eat.” Lags 00110 . oo" ‘nee atzen 3am ea09 ts ax 9 12 al * wirste Jon 818 coc sito at sbs! monittgo 1 . E 21 gv wove sus?) et er N „eee nt erabeol' ; ~evonnt 010 % nt vrsbsot 40 10100 anda ‘ered anf. et vance | tegavoy od: o NIN #100 ‘wis en blanéavod 0 needs 0 sag 4 ban for l, 41 bekrus xbezsocberitoy J zh. * kagge ibe veut . t „ . een as er, ene n er en ranbenod tk estan tna tM Yo vo Lananta” ‘ Li eee ingame a kak No f 1 hy 2 qiderebasl aotatgo 10 tre ‘ictal SVE, 5 2.0 “a 14 e 1 ear =e vnde 2 * =50= incomes.” The fact remains that people who tend to take the initiative and tend to be innovative with regard to one aspect of purchase behavior may not be equally aggressive on other aspects. 2. The Effect of Impulse Purchases To the extent that products are bought without any prior plan, or on “impulse", family decision-making is likely to be at a minimum. Hence, although this subject is on the periphery of the present paper it is nevertheless relevant and deserves some consideration here. A study of these types of purchases can be considered in two respects, first with regard to the frequency with which purchases are made that are "unplanned", and second with regard to those goods made on impulse“. In the former case, the pur- chase possibility may have been discussed within the family and may have been considered by the purchaser but not in any overt sense; in the latter case, the purchase was presumably not con- sidered and was only consummated as the result of a special occa- sion or opportunity leading to the recognition.of a need or the arousal of a latent desire. Two earlier studies of this question found that impulse purchases were quite frequent even for major items. Thus, Katona and Mueller in analyzing data from a random sample of x Mueller, Eva, "Desire for Innovations in Household Goods", in L.H. Clark, ed., Consumer Behavior: Research on Consumer Reactions. New York: Harper & Brothers, 1958, pp. 13-38. — — Vol LL pene Bitar Ie af Laoag i. apie ved . ssoobory wists ee „en etedtt af Bek iss-daberesb Lima bee, ce il yred¢tsay ‘ed? ne ak! Toe hdwe! ‘ebay ud. ee en ‘be siraveLon covtotzreven a 91 n ta . 4 ‘barobbando' 86 rns e sages Seats tox eee ak yonsupos® 117. 0 Sang ite tent ri ; bac ésiw hnoo ban Ibshaa TG * at be la 8 Aug if er somtoi edz al! ."eietagha" 58 bes aboog 9% . sed e tg ak boesuounh gd seit cas vH g Ln ak sow gad cuts aad 1 berabtaneo-e “hod 260 brueste may bee ont teens onset aie — erase ate 71092 sit an bedeuted Vin as lial o Pe oft 70 Beans % abi} tmgous 4 52 eee e ‘ 1. i nano iet ania bah! consump wi aa ee. 5 8 ah —3i- 1,000 U.S. families found that about one-quarter of the purchases of four major household durables were made with almost a complete lack of i The primary reasons for these purchases were urgent need or a special deal. In the case of men's sport shirts, impulse buying seems to have been even more frequent. In another study about the same time, based on panel data from 150 families in Decatur, Illinois, Ferber found that about one-fifth of the durable goods and clothing purchases made by the panel families were on impulse — unplanned and r Both studies found that purchase planning, and highly deliberate decision-making, were most common among the better educated, the middle-income groups, younger families, and professional and mana- gerial families. That many purchases of dürable goods were made without any particular plan and on the basis of need had also been demonstrated in a study of the Consumers Union membership by N Indeed, until the advent of subjective probabilities in the use of ascer- taining purchase plans, the largest proportion of purchases of durable goods were accounted for by people who had not reported 1110 any plan. This does not mean that families were necessarily x Katona, George and Eva Mueller, "A study of Purchase Deci- sions", in L. H. Clark, ed., Consumer Behavior: The Dynamics of Consumer Reaction, pp. 30-87. ae. Ferber, Robert, Factors Influencing Durable Goods Purchases. Urbana: University of Illinois Bureau of Economic and Business Research, 1955. Inks F. T., Anticipations and Purchases. Princeton: Princeton University Press, 1964. rr Ke g | 1 j ae id 1 9 bean und of 1% le vue 7043 ‘baer nok itast 20 4 1088 l dacuti” bbw bnd wtew int teas resse so Use 1908 enadn⁰¹ 0 76% endend Tann or iM Nah setaslab * droge . Ned Yo 680 arid nl inst tatooge 0°30) S8 3 . -siesupetl aer neve goad orp . eaves an v ‘eeivom. 29 pian: Mat 575 ned ne ban an same e eee beds 3 i. 3605 pasts Bak 1s Tr t , heed nt aod Chad? 0 | 8 ed shen veeedorg gatdiols ban aboog 510 28 ela to f e füge eg bre bonne — eee 10 10 lber f. art loß van bers gatane tg s eee ‘sede banot 8% . tl bs abu 35990 oo? geome nonο zen orew , pmb — bits Lene rss 00 —— . eequoxrs wan 200 shan nee sec „deal to bad Vs 3 deter ierenab nesd ost Had Swett to Sad Seis a0 Ban akg a4 0 Beebo! Wiesent dd Uke ns dus 10 Lal be eh and dg 10 Xt e To 800 at? nt adtytttdesdera evissstdsa to jasvbe os" 40 8b 1g to solixoqezyg sasyaet edd,” s I suatoiug | Lats ghey Jat bait o TD vd tot 886 ory boo aasee an „ agtites.s tads as fom’ asd what ts. Kas agen 10 Wosz at delle wil e gt tea A5 Hed 4 -32~ making these purchases without any discussions but rather that the survey techniques were not obtaining the most relevant infor- mation plus the possibility that many purchases were made on the basis of immediate urgenecy, in which case family discussion might be minimal. Granbois suggests the interesting hypothesis that, “households are more apt to form purchase plans for goods that they do not already have than for goods they own but intend to replace whenever necessary”. In other words, the replacement of goods already on hand is more likely to be left to need and urgency than to deliberate planning. Satisfaction with a product is likely to be another variable serving to reduce family discussion and planning. In a recent study Newman and Staelin find that the most important variable in distinguishing between decision times in the purchase of a dur- able good was satisfaction with the old produce. Satisfied users took appreciably less time to make the decision, which also 5 the amount of discussion within the family was less in those cases. The amount of the purchase is also likely to affect family planning, small purchases tending to be purchased with a much shorter time horizon, and very likely with less discussion. Thus, Pratt, in his study on the average length of the purchase planning period based on data from a General Electric panel, * Granbois, op. cit., p. 183. * * Newman, J. V. and R. Staelin, "Multivariate Analysis Diff erences in Buyer Decision Time", Journal of Marketing Research, Vol. 8, May 1971, pp. 192-198. 7862 sata ‘ud . v. 9510 n ; ~apdat vero tes 50 alte patanaa do gere sis We at? d Shun oxsw ern wien e eunesee pas oie 2 ande ig pend datdy 1 bee 1 / aaa eknadsogys gerseexsant - pteoagoe oder Lenk 0 . det aterog~ tat a l oeasonug on 93 ade enge ot 0 bagadt sud mao “ais aboog 30% nats ound vosexte 90 ; ee n , abxow redo al 2 eee — 50 bom bonn 92 er od of Masts a wt bond a0 roots daten ig aerate 3 oad’ x atdatxay aufs on dn vod ak bend te natizo%st3s argen @ Bt as le bas sotwerouth vllt engen 88 5 at dat av doc 10 ods, ‘gerd bak nt tone ban aeg ae a to wand at at shots worsioad GNU Dots pi Javborq blo 900 giv debs 2a1els om, naw cS 2 N od fatsie enten ads slam 03 ants 8081 K cidatoozeum ror Ve wil3 nun kv aokuausabh ho za ont jute mee, 1 ens olg ak rol. that? dd 49 yloakt 054 70 . sat 10 abe a sot, „tnt onal u etnias bd hog nortred e — dundenug r Vo n aevi arts na thud at 29 5 ,saneg Manan dende ® mor} 700 u oan dotat n dake begadotug ad or; nee a0 Ae t -33- found the average planning period to vary from one week for small radios to 16 weeks for clothes arters. In a similar study in- ves tigat ing the circumstances of the purchase of small electrical appliances, Jon Udell found that the planning period for these appliances ranged from 22 percent for one day to 83 percent which were bought within one come Studies of impulse purchases of nondurables have focused primarily on food products or items purchased in supermarkets. As one might expect, such impulse buying, in the sense of pur- chases not planned at the time of entry into the store, was found to be substantial. West, in a survey of about 5,000 Cana- dian shoppers found that 37 percent of their total purchases were not planned (not reported to the interviewer) when the shopper entered the eos The Dupont Company in a similar series of studies in the United States in 1945, 1949, 1954 and 1959 found that the frequency of impulse purchases in supermarkets to be rising over time, from 38 percent in 1945 to 51 percent in 1959. U At the same time, the percent of items planned SP i814 in advance declined from 48 percent in 1945 to 30 percent in 1959. 1 R. V., Jr., “Consumer Buying Intentions as an Aid in Formulating Marketing Strategy", in King, R.L., ed., Marketing and the New Science of Planning. Chicago: American Marketing Association, 1968 Fall Conference, pp. 296-302. oN J. G., Prepurchase Behavior of Buyers of Small Electrical Appliances", Journal of Marketing, Vol. 30, October 1966, pp. 50-52; reprinted in Britt, S.H., ed., Consumer Be- havior in Theory and in Action. New York: John Wiley 6. Sons, 1970, pp. 461-464. fest, C.J., "Results of a Two-Year Study of Impulse Buying", Journal of Marketing, Vol. 15, January 1951, pp. 362-363. E . Depont de Nemours 8 Company, Consumer Buying Habits Studies, 1945, 1949, 1954, 1959. 1555 103 4 ano e e vox i il an . N =a} un ate a eee bens ee ses ar a2 poke eatrants Laas 6. ste was 10 eee ent ot Sang a eee 100 borrcs lens ke tt aati bar ‘thous not is mide vasensg 8 05 tab aria ‘402 a0 * part — 3 N 1 we snd dcp a4 81 * 34 1 fis. ban sot ah eo iderbad +8 noenitsrig: rl 10 bee 5 5 * 8 8 eee * boote tome 10 aroubor dect ae ao pith] “mq te sone ‘pita nt PAE ue Aout ed Jig’ now ore otis int a0 20 aan odd 1 bannn Tü 0 ad nnd 000, : ande 10 vide Pur) een 14h dis od ot be ; 167 daenHDAανν 1000 ü 10 dene tt ted boas? srodqome fi e eda nod 4 ott 05 betxoger) 2000 2 30 esktes 1a lte 4 at vos qed) v ot 9.06 ota § Baud ee dan let eber esel at iet dee ee at od of ndiestramtsque ni saug aalugnt 10 sup oan’ i * eee a bee N 01 ce at daworsq BE wert em! revo Ib Bi 9 at deen tes ‘Sentalg email to „Mi eda oats an ag TE 62 2261 ak 278 r. mad dont fast pom 7 * i est! at ingot — 42 N 1 * 8122 J e, i — nt’ 51 n at bi u ef dee! gatqua 1. ne „bo „ .RBks. me UTA cA gitomA rogantds. «ge 106 9 85 5 ; 2 i eee 1 o% BRK 8 De tine? Yo en 10 v0 iel eaten Gn. Woe of g f tain ee e — 9 Bo „„. 8 . vs ae is . e ende 48 n, lot er n 48 5 1 n N 0 Pa i gated oe fight ie 60 Ae & . cle et et so 21 5 eal ane 34. These findings are in accord with the observed proliferation of items in supermarkets and the increase in efforts of marketing people to put items into racks or in a form where they are easily picked up on the spur of the moment. A more general interpretation of this phenomenon is provided by Sterm who argues that impulse buuing may be rational behavior, in giving the shopper a chance to adjust to deals and to merchandising opportunities found in the atore- He cites the factors affecting impulse buying are low price, marginal need for the item, mass distribution oppor- tunities, self-service, mass advertising, prominent store display, short product life of many goods, small size or light weight, and ease of storage. To the extent that impulse: buying is increasing, family deliberation is likely to be de- creasing. 3. Family Roles in Brand Choice Of the huge literature in the marketing field dealing with the determinants of brand chofce, very little has been concerned with the roles of different family members in this choice. To many marketing people, brand choice is a matter of habit forma~ tion which, once established, is Likely to continue almost in- definitely. Thus, in one very well known marketing study, Kuehn notes that buying decisions are a learning process with more search behavior taking place when there is more felt uncertainty about the product, and that the probability of buying the same * Stern, H., "The Significance of Impulse Buying Today", Journal of Marketing, Vol. 26, April 1962, pp. 59-62. Aly eae 15 Wie eh 1 if iy ie Ai n 0 tp ne 0 Nn ThA N rear) ie [ 5 0 y l iP ou N ue Setze vel 0g bevrwado 4 dake prion. 0. aot be Assi 0 ente at eres. ods ba . 02 altes ens dad esch, aro ak 40 ens eie amet e a0 bassin lend ono 4 eee ad 35 Ae oats Bo eee anda ente ode pee ed Bobtvarg. at a 8e ag sonata ee auld gatvig ni. wotyaded facctaoe 55 1 ok Sawai: tee ede gatetbasisxom 05 das 800 0 os 7 ona TNG satuqnt grtiootia 102282 0 nats on." | og sobswdixyo.b aan nea ols. 105 e lüge ve erate Aeg gokalzzevds w tokio ian 0 uh ate an e e shook and ta oAAL 9 om 10 eee ene at 8 ue be) ado) bre he II By ‘ake 1 batt bse oda ak oxuseras2s an oat bead 5 end eisai cay ec bass 10 of sokoila aida mh, cas dean tant ace ed a0 len e — ad 20 Sasson . af bal Bear algong ae J eS bK seca t n o 411 et sgi jana 10 ee :e, gave ed ie, biet o ab de, 9 Sen ar iil ee „ bis oh ahah eee ~35- brand on two consecutive purchases tends to increase as the in- terval between purchases decreases (at least for frozen orange juices Other models take an even more sanguine view of brand choice determination, such as the Bernoulli process model (con- stant probabilities of brand choice), but even the more sophis-~ ticated Markov process models or the probability diffusion models treat the family as an cere If anything, the focus in mar- keting has been on newly formed households and to induce them to try a product. Thus, . . . younger housewives are easier to educate to an awareness of product and brand; it is easier to get across to the younger housewives the reasons why they should try or buy it; and younger housewives are less fixed in their buying habits and brand loyalty, and will be more inclined to change their buying pattern in response to AES g oe (p. 65) The main focus on family decision-making with regard to brand choice has been on automobilies. In one relatively early study, it was concluded that the husband decides what make of car to buy in 61 percent of the families and the husband and wife together in 39 peccent.”* George Brown cites two other studies 8 A. A., Consumer Brand Choice -- A Learning Process“, in Frank, R. E., A.A. Kuehn and MV. F. Massy, eds., Quantitative Techniques in Marketing Analysis. Homewood, Illinois: Richard D. Irwin, Inc., 1962. ke For an excellent review of these models and for much that is known about the subject from empirical studies, see Massy, W.F., D. B. Montgomery and D. G. Morrison, Stochastic Models of Buying Behavior. Cambridge, Mass.: MIT Press, 1970. 111er, D. L., The Life Cycle and the Impact of Advertising", in Clark, L. H., ed., The Life Cycle and Consumer Behavior. New York: NYP Press, 1955. rancett Publications, Male versus Female Influence on the Purchase of Selected Products. New York, 1958. “ganz . wiv — a0 — N — base 10 wl acike cin een e ‘in ‘aban nits Ot 00) {abort weanosg tts 487 60 dain oh yuahotnab a kao D of? dv 250 een bacad 10 . 8 nolaatat ahtaaudorg 205 0 lebe eee dener wa 7 e eet asia ty: nergy +. 25 oka, ry ry wheat oF a weben d ‘baw’ shlotawued boukren en e coal ) e2s%ubs oF mates * nov ed rin "ab aner Jog 92 übten 81 21 bange bite och 20 de vod so n ds ven due ens nds api tubeedt mauer. 19 ; d ant vad shed? at baxtt oval ete nevtwoscad segaioy'6 | thet manera o3 er ssa ud re des e 8 ces. wo? * yabansrebe es oed, atk nene a on breges N gabinanaatstoat cba 0 eue lid ott I tze vleettaley ano of ben ti doaosuld a0 aves 6245 e 7 tao Yo Sm Jack eebkosh bB ett 154 bobu long now 1 a stiw bae Dasdabu ve bits eat ina? Aut 0 Wee 1. wt 7 ve salto an re een h . ene; er W . e . Aa 1 1 cara” 7 S ene e vee * W haw ee e We N ann, at 2 lie 1 0 A at sada dou 262 baa’ Pede Eye 96 pee 0 5 8 OTM «vena aoe eee eee 5 Zet 0 eit 2 -A. alepol eden, N ee: n Se 8 en 286871 To ore ; 1 „nee rbA Yo dre “sity Bas ego etna wot 2ohvade® eee dtm of o¢d Sted Sar 5. support ing his assertion that the husband is the primary deci- sion-maker in new car purchases, giving data from a Starch Study for True Magazine and from a J. Walter Thompson panel indicating that on the decision on the model the husband invariably either did so on his own or in conjunction with the wife. More recent studies suggest, however, that family Inter- actions may well influence brand choice. Thus, Coulson finds in a pilot study that wives' awareness of brand preferences of other family members varied greatly with the product laden Awareness was highest when the brand name was clearly visible in use, such as for beer or cigarettes, and was less when the eres wns altered just prior to use. In two other studies involving husband-wife interviews, Davis and Silk report that housewives frequently bought the brands that the husbands had ee In one survey over half the housewives reported doing so for convenience products, while in another survey "the percentage of wives who reported that their husbands‘ brand comments were very important to them "Brow, G.H., "The Automobile Buying Decision Within the Family", incN.»NicFoote, ed., Household Decision-Making. New York: NYU Press, 1961, pp. 193-199. It might be noted that True Magazine focuses entirely on a male audience, at least at the time the study was made. * * Coulson, J.S., Buying Decisions within the Family and the Consumer-Brand Relationship", in Newman, J. H., ed., On Knowing the Consumer. New York: John Wiley & Sons, 1966, pp. 59-66. "sate, H.L. and Alvin Silk, "Small Group Theory", in Ferber, Robert, ed., Handbook of Marketing Research. New York: McGraw- Hill Book Company, forthcoming. 0 rosb denkt 5 4 derben ots ant bertel. ein Fes danse a) nox adi antetg, eee “Yeo, wot ae ret — beet! tan ee eit nabe * 1 wen bina an 8 11 “a 456345 en bonded, ea debe 705 n — ods 60 9 1 ne oi 4 vobanuso02 ab, 30, “Wo aes mo « „ near erte 3045 „eee eee bus sn0a07 a ‘ bald 658 Lad Wet kalte bang bees tint L =e to sannersletg baated v0 agnus ere edt e 2 we bende 25000 edz dttw, vragen beser e's de0 en sigtety eixaots, say ang basgd as paste teadighit pew asse ie odd mode seal an 4 sozapragia 20 „ abt x02 un doue +8 1 N en ot xotag sagt, teseote aaw ou mene odtw-bareimd pakyiowal, alben ‘xed ows al ‘es au va ο oy t anda mogen Aus bas i 1 save ven, ann at eoasaunes bait eas dul 115 204 — 12s soubor, eonetnevtion a O gated bes wee av eu⁰d add: bezogen dan nowt, 40 o ag rend ods” arian vdo ok 9 wach od sansroga aay ore eee . ‘abaadawd xiadd 9 arts n abel ad Pen e pen rk 2 ied ‘wo “.gabdeMenolekogd blodeazol 4.00. err ee ** 258% boson. 9d ae e r eee e «feet 83 2 9 sapat a ale n 1 ao NA abs¹,ꝓZxñH N 1 6 abate ae 26 aad Uy N acid bow eh bice’ od? ad tu. ano fut gut" 8 15 a 69 aug gene £0 y. be MU „ee , oat — ee ne, Wee 2 e eal. 71 ae 4 10% % at „br en klage Aan, jb | udn 0 vol 7424 AAA re 2 23 in making brand decisions ranged from 26 percent for peanut butter to 98 percent for dog food. u. Also of interest is their finding that the husbands in their interviews consistently underestimated the importance of their comments on brands to the wives. 4. Influence of Children The studies of Converse and Crawford and of Van Syckle have already been cited to the effect that children seem to influence only the purchase of their own clothing. The relatively few other studies on the influence of children on family spending decisions yield similar results. Thus, Brown in his study on automobile buying decisions reported that parents claimed that their children, even on teenagers, had Little influence on the make of car pur- chased. Perhaps even more surprising is a study by Berey and Pollay in which they ascertained 1 brand preferences of 48 children in an elementary school and compared them with the cereals that their mothers had purchased and were in the house. A nega- tive correlation was found between the assertiveness of the child (based on teacher ratings) and the tendency of the mother to buy the preferred Spaced el The explanation advanced by the authors of this odd finding was that the mothers seemed to be more con- cerned with buying products that would contribute to the health of the child than with satisfying the child's whims. (The sample was from a middle to upper-middle income segment.) Ibid. a Berey, L.A. and R.W.Poilry, "The Influencing Role of the Child in Family Decision-Making", Journal of Marketing Research, Vol. 5, February 1968, pp. 70-71. „ cee siumsog 101 4 os * . aatatseb, 8 zu n 1g ak neh 10 ao. bee dab “ro besamLt aero bow edge sade e KVA eed, a e te edd od ed no — todd 10 2 281 2. to: sone 130 — ‘owed eee to rae Wrotwat) bias, nenne 10 erbse n e asthitdo A anne git Oy) bends ead 5 a0 Wan xlovetolus edt” Bano, aio Abe ko endend omy unodta tho gatbaedgn vita nto” evened Ya: eocsutiat sods 0 siidomodue ao burs etd mk Mead er dee tüte e bid 11 fi anil bankelo g 2440 bedeogien enek ud 48 20, oda 023 an admoultak 214i ben esse dns vonsg vd bers „n webe ne, ien aue gyusteed b 10 ae barer d tengas bealarasocs orks: da aby elastoo' ade sikw aod bean cee bua Tft emseinae bo un ak agb en A be; od? of axew baw bound zug bast eee ahd 3 ) bug ois) 10 edu ots; abe bnuo! eure i wd 09 0 dan 0 gooshis? aay. bn (agu a ¹,ẽE- no b * N r 1 aronsiza, ods 0 bab cai suaataes eT bene . 3 nde Sram: a O2 une 2 a aust way, gob) 4 * 4 1 . n as toad 143 of ‘etudkasans dh Seah. een, gawd eigen, wat) eee a! nde get et *. ande sta Nag 48 On the other hand, an advertising research study by Munn, based on mail questionnaires to parents with small children, stated that nine of ten parents reported they were influenced by their children in the choice of specific branded products. In addi- tion, substantial proportions reported products being used in the home of the type advertised in children's television pro- grams to which their children had apparently been exposed (based on the choice of the sampling frame). However, the nature of the study, a mail questionnaire, the lack of any control group, and the low rate of response, 44 percent, casts doubt on the significance of these findings. Some attention has also been given to decision-making by children, especially by teenagers. In one such study, Gibbs showed that teenager purchases of grooming, clothing and recrea- tion items in a Georgia high school were mostly planned, al- though many girls' grooming items were still purchased on the basis of n It does not seem necessary to delve into this literature ene Especially pertinent, however, are the Nunn, Mark, “The Effect on Parental Buying Habits of Children Exposed to Children's Television Programs", Journal of Broadcasting, Vol. 2, Summer 1968, pp. 253-258; reprinted in Holloway, R.J., R.A. Mittelstaedt, M. Vankatesan, eds., Consumer Behavior, Contemporary Research in Action. Boston: Houghton Mifflin Company, 1971, pp. 267-271. * * Gibbs, M., "Decision-Making Procedures by Young Consumers", Journal of Home Economics, Vol. 55, May 1963, pp. 359-360. from the point of view of spending and saving behavior, the study by R.R. Cateora is especially pertinent, namely, An Analysis of the Teenage Market. Austin: University of Texas Bureau of Business Reserach, 1961. ast, ga — wae ian e joa * i be at eee sabia neee ‘te \aSkoda ants : * iad mt bony gated ese rg ace e eden neee be ee 8 ard ay a erte at derte, . id tg. | it — tal beeogee 4580 cles gde ‘bait 0 b Ab 0 2 Ra een ons: avs bee vlg eds to worods .guond Lorine.) en 10 font 05 bebaut tien eu) esa 19 d sides eee iseiipaaart 10 „ wok ae wii nn sgn bids” n to sont: ! 11 10 60 — 05 e ‘aioe vol. asi net n. — 1 ate tun dave ond Vat eee Yd eLiatasgne 0 10 1 ros! bits besos to 0 asc n04 a0 1005 f at n bootalg’ eee wow lest an eee & at jets . i ‘aids to ven 11745 paper trot 42 1 ee ier | don wetad 0 rowadoan sed 3% 0 a , bite 18 15 97 i vowed casted wine Wel naudanettt * wi 0 \ 32 a 25 ie 130 dan 1 yes eset: 9 386 l ‘wer 4 24 J 30 ek e An l t a Aab ng 67 12826 N 15 u Dadateqes 18er-tes d „de a oe OV | 10 «abs eee eee, * 5 een e ee ; ee e ape i es 2 J e — ale ths „sees N aa bet 155 8. * ov ad 1 deren Waal San oA’ \ tomar yeah iteq x Yo wee bi ull ay ho vig el -39— findings of one study that spending and saving habits of adoles- cent siblings show only low correlations with each other as well as between those of the children and of the mothers. 5. Role of Information and Reference Groups Both the search for information and the use of reference groups are bound to influence substantialiy family decision- making. An attempt is made in this subsection, therefore, to indicate some of the more pertinent studies in this area. Unlike other topics treated in this paper, extensive material is avail- able on this subject and is summarized from different points of view in the general references listed at the beginning of this 5 For this purpose, It seems desirable to segment these studies {nto those dealing primarily with reference groups and those dealing primarily with the role of information. Reference Groups. The role of reference groups in influ- encing consumer spending and saving behavior was brought out over 20 years ago in two well known and very different studies. by Katz and Lazarsfeld in e and by Duesenberry in econo- ## mics. Katz and Lazarsfeld placed the main emphasis on the * . N l Phelan, C. K. and J.D. Sehvaneveldt, "Spending and Saving Patterns of Adolescent Siblings", Journal of Home Economics, Vol. 61, February 1969, pp. 104-109. * * See the references in the footnote on Page 24. Katz, Elihu and P. F. Lazarsfeld, Personal Influence. Glen- coe, Illinois: The Free Press, 1955. ia ore ee James, Income Savings and the Theory of Con- sumer Demand. Cambridge: Harvard University Press, 1949. A very similar exposition though from a more macro point of view appeared about the same time by Franco Modigliani, "Fluctuations in the Saving-Income Ratio: A Problem in Economic Forecasting", National Bureau of Economic Research Studies in Income and Wealth, Vol. 11, 1949, pp. 371-443. N wth n 1 1 eh Oy agin ast 85 0 ii ee ur i, N 1 * exetzon + a te ben eee e e 0 ost I L sia 1% engen Xo inet oily da onitneeroRat 50a vanes 500 wee i) ~aotedeotl rien ‘ai taisaasedee poranl iad oF vue . mS I th ea eagtexedd dae gend bas 1 es A onen 0 clk * 9 a enn ehd2 irk anktart Jasakiteg „ ⁹e ona * 5 wave pam are at kekse einde ae ahs ar besen wotged 1 1 10 ate 20% wei bos rama oes ‘pas saad eras „ aids to gotantgod ais “36 baie en: age inne oft * * * asad one on elena gb W 1k asia obs? 200 ae i bos abet ae eden aa tees Sad auras bay’ we ; ; ,nohanaaotal 10 alow wait dad Fü saatzg bes 2 ak A „erg nene 10 alex aT e- eee J seve: vd aden au r gut von been gathaaga v0 An = 4 en aN We Mein nwaed e ee as ei 21 A a 47 nonose ak \ertedaonsud 4 a \ gatotsoe nt. nend bite § 558 2 0. 1 1 anit no e nian 6015 beni bfadicassht ban’ 22. 1 e 3 . ban „ biste %%. n tx) e ieee en arte arm seelobh: to d 4 Volden e een 1 ‘a a i OS meet 10 gon oot 50 . ene, ofa oa” * ik cay . 1 9 ead e io 4 Bhs wrth ta wie | mua, sti sesh bial mis we N ala a “8 * A oe 1 — 4 e Maher 40 Ante n on n er anoksevsoutt „e te ene ed 1 75 e eee eee at een A | e eta aren? a daldie deus 40. influence of friends and relatives on purchasing behavior while Duesenberry focused more on saving behavior, In the latter con- nection, virtually no other studies seem to have been made of the influence of reference groups on family saving behavior. One exception is that in her study, Schomaker reported that wide use was made of consultative sources in the financial decisions made by her sample families. In particular, people outside of the family were consulted 88 percent of the time, relatives 38 per- cent of the time, and "specialists" 22 percent of the time; all these proportions tended to be higher for younger families and for better educated families.” Indeed, she reports that the main influence on the decisions seem to have been the information obtained from these reference groups. On the spending side, the well known study by William Whyte seems to be confirmed in a number of other products and ways. In his study, it will be recalled, the ownership of window air condi- tioners was highly clustered in Philadelphia in manner to suggest that it was influenced by ownership of the same product by neigh- bors. A very similar finding was obtained by Kurt Lewin in an experiment with changing the diets of housewives. He found that the housewives tended to be much more cooperative when diet * Schomaker, P.K., Financial Decision-Making as Reported by 100 Farm Families in Michigan, op. cit. ke Whyte, W.H., Jr., "The Web of Word of Mouth", Fortune, November 1954; reprinted in Clark, L.H., ed., The Life Cycle and Consumer Behavior. New York: NYU Press, 1955, pp. 113-122. 0 0 | ve one wn y 1 1 1 N 1. ip ao pet 1 ty 0 N 8 5 ai a UNG we 1 f a) - g — i 9 1 600 0 1 ey ‘ (any i 6 ee i 5 * ti 77 bal 9 ‘ ‘ali abe mee 6% dew dale b 411 d ( 5 1 N ie 1 N en e ö Le 446 wt al 5 erde a n KN 0 n ae Hy ve Pik ‘tet 10 — to ban reed ‘pind 3, e, dee e 0 ednet ene e 50 0 been sonotor Wor 00 aw gurls: boaogne ‘soso ee 100 at 5440 cab 10 ee eee este ent ‘at 2008 „ae ico . ie tt to obe ess ale pag, 11 eee akquen . 86 asvisolox 15 00 Yo dees Be bes ade or 5 0 ite coms as 10 wens a tees, bra , ante a ben gotta vendor td? ant ad of obra) er tas x 10 ö os 105 ge oda ebe ie Sedsaebe as Bots N 1 0 werbe att , 1 03 waa volles n fo a, een ec 8111 wth o irt x ute 2 Lew ods abe a0 buen ued asouborg ng to aue 6 ah beat rtaed of os. ~ al | age bara. = peta’ ** babe 10 alder. 2 % bettet od tity, at 4 ; Abet at posntmots edad son 8 ae ee OF, wenn al. wa 4 * 5 8 nwo. 21 15 beakrago 60 abel 4a N + ; a 512 0 eee, . eee Stet cow 93 Ae * debberd ‘ban n a _ tars bowel of -eaviwonta 10 10 mth staged hw in 3 l woth nde $208 down od ban 2 hed — W Tae cart 9 Mil yt pore? esate 3 iow 10 00 ee £ * ices ues 7 6 ihe & 1 ht * r „ ee e oy 75 oe changes were suggested in e groups than when the same changes were suggested in either lectures or in personal conver- Sa ens In a somewhat later study, reference group influence was found to be high in housewives’ brand selection when the product was socially conspicuous, such as beer or cigarettes, but such _ influence was found to ae low when the product was not 5 Udell also reported in his study of small appliance purchases that the sample members reported discussion with friends, relatives and neighbors as most influential in their decision to pur- 5 Still another study in a very different field showed that in their choice of a physician and of medical services, newcomers to an area seemed to rely very heavily on friends, neighbors or recent acquaintances in the same socioeconomic class, especially Hit if the newcomers were younger families with children. * Lewin, Kurt, Group Decision and Social Change", in Newcomb, Hartley, et al, eds., Readings in Social Psychology. New York: Henry Holt & Company, 1947, pp. 330-344. ha Bourne, F.S., “Group Influence in Marketing and Public Relations", in Likert, Rensis and S.P. Hayes, eds., Some Appli- cations of Behavioral Research, Paris, France: UNESCO, 1957, dell, J. G., op. cit. rel dnan; 8. P. and M. C. Spencer, "The Effect of Personal Influence in the Selection of Consumer Services", in Holloway, Mittelstaedt, Vankatesan, eds., op. cit., pp. 247-257. ; ne ane d ae U g — nk batMoygue 4 ) bo Lane at 10 dense rade ts int bie pita dow Boasultal querg Bode bee gen ce ee 0 0 Bolz 0d Las dau een ak ane 00 3 1 and aah een 10 960 ne tobe eben edge 6 5 . . den a soubor” ute wee wat ad ‘On, bawod new 4 sail? eee a0 ah to Ubinas A 52 beraoge ¢ ee bun da absurd bebvoden eee § ang al oie tanh: An wh Aas A N on co we ' and bade bel an7a¥ Ath dur „4e bees ae dene a b TOW ML een See 2p, bas anlokeyig = to ebe de 0 wxodighivn bea a0: ¢livaed ven Glen 66 baases vitatoagen - „neo ase kg anna: 93 al eoomerabaupos 3 3 Mon, ao dw l ROMENOE bn A ee ok y" “ogra? lost bas ot end oak A walt eee ao „el erde e SSCL, ee & 3 iche bere ahead cai at ined tict ques ee et 2 1 „be ll e , av hig N n ee e ene n . is een | 1 ho 182752 eft" UM: ban GB ig eee at e si e W 8108 a - En an 17 0 N 1 nne 15 8 inh on n Fae Ke a 5 ale t abl bani yt 2 Perhaps one of the more striking instances of the use of a reference group is in a study by Bell who found in interviews with buyers of new Chevrolets that many of them tended to use “purchase pals" in making their Pen, In other vords, many of these people, especially those that had neither very low self confidence or very high seif-confidence with regard to car; buying would bring along a friend, neighbor or relative to assist in making the car purchase decisicn. Role of Information. The extent to which information is sought and its role in influencing purchasing behavior has been studied extensively in the marketing literature, so much so 25 entire books have been devoted to the ces oe Based on studies at Harvard, Cox suggests that "the nature and amount of risk will define consumer information needs" (Page 613). In terms of economics, Farley advances the interesting hypothesis that the amount of search for information is a function of the expected gain relative to the cost of obtaining the e e Hence, he infers that purchasers of large quantities of a parti- cular product will search for more information to obtain lower prices and that a more expensive item is itself likely to occa- sion more search for information, other things equal. *pell, G. D., "Self-Confidence, Persuasibility and Cognitive Dissonance among Automobile Buyers", in Cox, D.F., Risk-Takin and Information Handling in Consumer Behavior. Boston: Gradu- ate School of Business, Harvard University, 1967. * * ; As an example, see, Cox, D. F., ed., Risk-Taking and Infor- mation Handling in Consumer Behavior. Boston: Graduate School of Business, Harvard University, 1967. Ware J. U., Brand Loyalty and the Economics of Infor- mation", Journal of Business, Vol. 27, October 1964, pp. 370-381. „ 1% smu ‘oils a0 eden Senate e a 36" 00 5 eres ab bien bie led es e, 2 ‘a at woe gai 03 bab: 100 2514 to yaaa ‘gas esetorvoitd ‘wan 0 wee nan shrew 1540 ar’ eee 11040 vas ab „bel & Al wot V redoien bad 3250 boon tels ter ee odd * aS =. ieee ae 9 bat ‘ita poviai han ten abe iy x0 2 pre G3 50141 or x0 4 0 bel s tt 22210 anke onen e ab ene 10 8d gan a at not . teddy r 3a93Ko et itd nae re to ales * nosd wal 2 ndnd e 15155 Seeker ei Lor wat bs ag 6 +. hi o Ho 08 . bene ots 155 da tus bal wo bond si be oa 67 bes- toad ovat wlood 1 ‘ 40 shwome bis nion 94” 20 ee x 103 10 0 oy (Ce 200 "ebsen Bolt dannn anlieh 41 4 ie phastvoqua zarsen odd euounvbs deri eee to am ed: Yo. 6 ‘pal deseo! 70% o +0 Jaisemm ana 4 ’ weg arne Bak ads aulas d 20 A0 n 09, tafel nag boa Frog a 25 4 1 tcp AA Yo eie 0 2141 ot 8 yawol “akade oF notsastoias aie 397 leise ‘tae — . oe 090 60 West Wegs! 11 dt nebo en * “gaa ban 8. 214 en Ad TWO noisiiexgRat 9 dee pir — Yh 1 te ovtsingod bas e e 4 9 ob Lee e 9 ALA n Ä mod ot anand ideen seme - band ; nod Bod 5 enn N01 We e e A bt. 4 44144 46 yaks a 60 28 ok Lal 2 {aodo? nb ragseod” Nr eh 3 881 ee 5 ere oe att ‘Io saimonord ‘oats bas 1 e ae „ 18864 ee „ 1 f N 1 Kes A principal source of e on information is with regard to the acceptance of new products, and it is here that information can be shown to interact with the role of reference groups in family decision-making. Perhaps the best manifestation of this relationship is the two-step flow hypothesis on acceptance of new products, namely, the initial flow of information from impersonal sources to opinion leaders, and the derived effect of opinion leaders influencing their friends, neighbors and acquaint- ances by means of word-of-mouth. This hypothesis was originally formulated in a voter study, and was substantiated in a later study by Johan Arndt in an experiment on acceptance of a new food product by married SEude Various other studies have indicated that information plays a key role in the adoption of new oe In particular, these studies find that the use of the mass media seems to be especially high at the awareness stage, with personal influence being of very great importance in influencing the purchase de- cision. As might be expected, those who are most likely to seek * Lazersfeld, P. F., B. Berelson and H. Gaudet, The People's Choice. New York: Columbia University Press, 1948. . Johan, A Test of the Two-Step Flow in Diffusion of a New Product", Journalism Quarterly, Vol. 45, Autumn 1968, pp. 457-465; reprinted in Holloway, Mittelstaedt, and Venkatesan, op. cit., pp. 235-246. or example, see Beal, G. M. and E. M. Rogers, "Information Sources in the Adoption Process of New Fabrics", Journal of Home Economics, Vol. 49, 1957, pp. 630-634; Mason, R.G., "The Use of Information Sources in the Process of Adoption", Rural Sociology, Vol. 29, March 1964, pp. 40-52. be d. at e 0 ee 0 ee Ath Nit aes sottnerto tat dads oxed 61 at, nae anne wa Yo nasa wess a nt aquote eee to ‘abt 05 fake, apantaat . ae * A! halk 8 oT uid Yo golsngehtcas ‘tend 13 eee, auh 1 A ; bi) * * a g * rap 15 beende, 0 ated soared 01 Gee. pat 0 gt ane nord 1 eee 10 wank Ants toe on cesta eden bond 20 dene bete arta es nebst cola kae on eee 5 samkaupon bis anodda ten ns shay’ aber ene eln anuioaetl abet eee be 10 ada 17 ee 10 & nt t I als hood wad d de gde 200 1 eee a8 th. shorts asitot + 0 ‘he ö 5 g * ** wocabern bert Na 3 . ass — at 19901 4 . ese kges reds en. best ert . 4400 arne por patina ratio worst 2 9 , taduplsiag ol ene wan 30 notagoba aga mt olor; ad od eas aL DO OS wal 10 ste ‘oats Js ban 401% oe ponent tat Lp fle R S,. begue, out ah Haid 171 0 vu? h and rd add berechen nl eee jabity Nen 20 4 lave oz whats dude "the: ody gn endete * ee, * oy — 2 Sst at cc, 6H bak pooled e Siete ur’ 8 abr seer Wee alen ‘ast whi 1 ute ak hake 68 eas) 20 gest Rn date ary gaubt | „Nel n e e e ien anne bun „e wee ah 8 a de e e tng at MA hoe . 0 tant mie poon We wo 30. 777050 fro oat at (ie aren 1 dr OLS 4% Nes ' 1 55 teres ee jo aagoetT , sont ee = 5 ' / se 1 ec * he ' faa) att eth 9 yet J a 6 8 ‘ * 0 N * 1 14 fj N . e ne * nt 4 — information and seek information to the greatest extent are younger people, the better educated and those with higher incomes.” Also, greater knowledge on one type of product seems to be asso- ciated with greater knowledge on another product, at least in the case of food and textiles, though mere information does notenec- essarily lead to greater satisfaction in 5 To what extent the same findings are valid for financial decisions re- mains to be investigated. Vi. Saving and Investment Decisions 1. Saving Goals A great deal has appeared in the economics and home econo- mics literature on saving goals and reasons for saving. Thus, reasons for saving were discussed by Keynes in his General Theory, ## and more recently by George Katona in some of his works. The literature is at least as extensive in home economics, though the focus there seems to be primarily on the financial and saving goals of rural families. Thus, for a number of years during the 1950's and the early 1960's a cooperative study was undertaken * See for example, Roberts, J.B., Sources of Information in Food Buying Decisions. Southern Cooperative Series, Kentucky Agricultural Experiment Station Bulletin 85, 1963. ** . Henell, Olaf, Marketing Aspects of Housewives' Knowledge of Goods. Gotenborg, Sweden: Institute for Marketing and Manage- ment Research, 1953. S A. E., and D. L. Gilmore, "Consumer Behavior in Car- pet Purchasing", Journal of Home Economics, vol. 61, February 1969, pp. 110-113. Hor example, see Katona, George, The Mass Consumption Saciety. New York: McGraw-Hill Book Company, 1964, pp. 176-177. fa N apie | oec. sh on enone . 0 Ce os a6 sabia e 5 ot a et 6 esau wee fo — sonny ashe b des ‘aves aehiamotal ‘oto syed ö 1 ber, 9 i sare er elbe nk eiserne A 4ů0⁰ Bas — | eee elke ters wt hig eu! + dg ines eee sail salmecios 6 at bono ms In se “gaat eee sod ensues, ban dich gatvis 0 4 ne a ak eve pf beesuoa2h row ganges 2 ras a), enten eld to 00 ut dean ee ef tienen e anotmoncas: ene! at iy temsaity - erat ra * of — 1 das Ta ksasn tz wild He, eee od 65 eos weg 0. ail aka N * 20 deus te x02. eet eben; b eaderusbas o was, ebe esel Mas ows ban a! " Hl 5 f be 10 ‘asrese ae sot 4 480 i avijassqqod. AN 0 det, 5 ee e 40 8 7 H 1 1 { g 1 i 1 1d th baie N egal “i f th rede * 1556 fy eee W U =452 among nine North Central states covering 2,000 rural families on the meaning and the nature of financial security, and on the fac- tors affecting their security.” Indicative of this type of studies undertaken is one by Phelan and Ruef, where they report that planning, protection and saving were the three key values pin- pointed as related to the investments of 93 rural Pennsylvania gouf Similarly, in a study of Indiana farmers, Oberly concludes that the number and kinds of financial decisions and of family goals are influenced by family characteristics and are much more common in a conscious sense among younger families, those better Se at families at both extremes of the income scale, and especially in families when the wife is in a professional or a managerial job. In still another study of this type, based on interviews with both husbands and wives in 65 families in New York State, approximately half urban and half rural, Crow finds that they were mainly concerned with financial security in the sense of reserves for emergencies, adequate level of living, future 5111418 Elizabeth, Family Financial Security. Iowa State Agricultural and Home Economics Experiment Station Special Report 36, North Central Regional Research Publication No. 131, Ames, Iowa, 1964. This publication contains a list of the other studies undertaken as part of this work. gt J.M. and R.R. Ruef, Values Expressed and Realized in Family Financial Plans. University Park, Pennsylvania: College of Home Economics Research Publication 176, Pennsylvania Agricultural Experiment Station Bulletin 685, 1961. fouerty, J.A., Major Financial Decisions and Changes in the Family Life Span. Unpublished Ph.D. thesis, Purdue University, 1967. elbe 0 a wae, 300 eee 15 haiti + ai onda zen 1905 esac en bs salads, rh 9 * 25 ang pouley 0 rtl ee ora aas ben, aoksneaerg « 7 eee bene, ee ap eopaar veal fa, ot bene len ee f A ‘yay Abe taupe uad eee e 50 wens 5 ab tete ede 0 bi anoketonb | derer 20 bet bas alt ron lou ag bas nataeingnanted ‘ehhh See ‘belies ie: 26250 Se ee dauere anon puted: eo ocnes „ ab e bos belege at vita! 16 ente anes . alte 26 0 — 5 * 20 agen 0g a ated sity. 00 h 7 N N s | ee a Hilaire 60 do gr 1 4 to ‘boss wen n f 11368 Na walt 41 llt! * at ne bik beau wok ada N 0 teres ‘ited bien — ta 60 a6 enn wats nt dite dera a bentenaes wks “wot A Seer 6 1505 nurse eee x 8 ewok. ee ng Joka rr n Tatiaqg? noling e ed, ke caer SEL soit, ie Sieg 2 en ee be base wild) a, ayn * Pra pk wok? bath ; ‘ e * hy 5 FF . nore «che 28 wap owned piu L. t te oth . N ee e bene a am: ca! miter ol oil 5 (ly A ited tot aoa 2 ats | i 33 + Mitt yer 4 ~46- security and increase in the level of living. Saving was under- taken mostly for security, for steady return and for the long. run rather than for substantial or quick gains.” Indications of a relationship were noted among goals, concepts of 9 security and financial management practices, such as the tendency for those concerned with job security to be more oriented toward financial security and very strongly disinclined to venture into debt. f These e e in throwing light on why people think they 3 or whether they should save at all, and re- flect in effect the end-product of the family's decision-making in this regard, They do not, Be e throw much light on how these decisions em made in the first place, or on the roles of the different family members in defining these objectives. In other words, the dynamics of the process is yet another area for further study. 2. Saving and Investment Management The extensive work in economics on the determinants of saving and of asset holding has not been paralleled by much comparable work on family roles in saving or investment behavior. Hence, as noted previously, it seems best to combine wae has been done under these two headings and this single subsection. * Crow, J.H., Financial Management in Relation to Family Values and Concepts of Financial Security. Unpublished Ph.D. thesis, Cornell University, 1961. * A summary of this work to 1962 will be found in Ferber, Robert, "Research on Household Behavior", American Economic Review, Vol. 52, March 1962, pp. 19-63. 5 , ano ein en ee, dae ina en enue en dee ottatba: unten den xo EatSeazodue ven mis estan ot Istomant? 20 erheanco ratnog gaoas baton otew tages e . Woasbase e113 36 stove .ssoktontg Joesegsanm Letoaentk bas yi brpwo2 besastza wros ee pape kh e esel emvtciev 03 da tand elasoxse eee bare „knee N a diet w. r iat sawn at Loto" rte ee, ~ox bas Is 30 evan bivods beds zedgede x0 bed yest 2 | gablew-noletsth . Ukrat adi de souborq~baa 8d sek at vod ds 26841 des wolte \xevewod 0e ob godt „er en of 00 6e esd geln adi at obua eee anozatash a 5 este seeds galaPheb at windene Vie 806 0 wis ll | —B rn oa ee 20 — pris — at stiow mesenmaxe. edt ' dium ve beleLiaxeg dsed 200 Aad “*sntbiod dss 26 ban gyn | roivaled, jeamieaval to yatvas ck os lo vital ao Aon ak an ane antdacs on gd esse 32 \plavalyerg ben es 205 sai +a * 1 erte olgate atts bag 8 ova 1 vob m G. N ire 8 1 8 0 es * “47 = To Save or to Spend. Decisions on the allocation of family income between saving and spending can be considered from two very different perspectives -~ the extent to which the family as a unit gives priority to saving and, with regard to family roles, which family members are involved in saving decisions. At least two different approaches have been taken to inves- tigate the priority of saving. One is what may be termed the “direct approach“, whereby the family has been asked how it allocates income between saving and spending and the priority given to saving relative to spending. This is exemplified in questions asked of the consumer decision panel of young married Perales operated in Decatur and Peoria, Illinois by Nicosia and Ferber. The results indicate, rather surprisingly, that fully half of the 312 couples were giving some priority to saving in allocating their funds by following a definite plan for saving part of their income in advance of spending. One of every five couples indicated that they would give top priority to saving under almost any circumstances. Undoubtedly pertinent is the fact that these couples had been married only three to six months at the time these questions were asked. The more indirect approach has been to impute saving pri- orities to the family on the basis of general information on the family's saving and spending habits, on its type of savings, and on its budgeting practices. From this type of information, in- ferences have been made about saving priorities. Thus, in his early work, Katona has stressed the distinction between cont rac- tual and discretionary saving, pointing out that certain types A? 1 a 9 VS ay ey hie Wid a el oak 2 ne 7 N mn ha i i i N Vii 105 i nor ge ö 1 7 N 3 . * 8 N 1 i f ie it He. i 5 635 15 * fy one N rhe Wey Te ; 1 Heid g . ty 1 N ' N , i ’ n : Ay my ah) Le at Aw 9 6 1 0 10 8 1 i th heals, 1000 ui 75 1 * 4 1 due 0 beetle, pep Haden Aeg 7 9 a a * * i : 2 3 1 i 5 deer n bozabiecoa ag ao ee. | . i 1 1 ni 90 2 ra! 1 4 bo a, ee N i e, odd aki 65 e ait) 3 yan N a; | 405 NA M. b ay 6 baus ed ayer aby bes ages of neee bebe aires at bevtoval om ‘viedo a 1 1 SS: re 1 1 Leet ee ated sve eoiiosoxg¢a ens ana 1 at brtss od esi and at % ee Yo el » N ak wor beds aad 10 Trine 910 me bete ‚ enen oils ber weed bnd ee Peace owoont at betitiqasxe 1 e an bade of ebe! une 0: ‘ 8 1 ty view fam che nae een bokrias, det to iene gozetoed En oat 10 bels be siwoatt xa a1 ee bon 000 at ene 98 Ute ans düsen rise zadges eme, e, sat fee? | N A bene. 03 yatrolag acon gatviy ome sotques bt ee ia gotvan ot 14 oxiatiet, a gatvoliol vd baz "had 0 eve to and bees. to sonst tit ant ted 10 3 oi te : / ‘ A gatves 90 eatronag 05 1. ee 6545 5005 betuatbat * oda at bees eLbeaduobatt ; eee w 3 a 5 «te ob eng; vile ene ‘ood bed 10e h jada 2 Te b f a been ane — nests wl ata 1 ane 2129 anives an 94 mes and 1 077104 ie | ont n bekamen ieee . ‘odd be . a das esatrae 20). enen n We ont e 15 on ee 1255 wid a t eerst galivie er Ne e 7 N 1 outa Fa eau ait 4 48 of saving by their very nature must receive top priority, because they have to be made every month (or every week), while other types of saving are more discretionary and hence are likely to have lower priority.” Katona. notes, for example, that a monthly payment on a mortgage or a regular deduction from a paycheck for purchasfing savings bonds must by definition have top priority because they are contractual in nature and are made as a matter of course. Part of this saving may be unconscious in the sense that the family looks on it as a form of expenditure and, in the case of mortgage payments, may not even be aware how much is being saved in the form of home equity. It is not unlikely that some families prefer to delude themselves that such payments are a form of expenditures, partly because they feel obligated to make the payments if they regard it as an expenditure, and partly because in this way they can look forward to being pleasantly surprised when say, the mortgage is fully paid and they realize they have undisputed equity in their own home. Some families are essentially saving-oriented and give pri- ority to saving regardless of their level of assets, as Katona has Hiden. Thus, people who save in the form of pension plans are also more likely to save in other forms, emphasizing the ae Katona, George, The Powerful Consumer. New York: McGraw- Hill, 1960, pp. 14-14, 92-93; also Katona, George, The Mass Consumption Society. New York: McGraw-Hill, 1964, Chapter 18. ** Ibid., Chapters 18-19. ot giert oe „eee a enen ‘oo ows 9 %. e en ote bon ties a leeres ee ors bee Nel ae or a | re aii dees de es . aut eee e at, awa kawnesati ad n gickywe 4 20 16%) gues ts a baw omustbangee im ma; * n 32 20 ‘etool w “gated or tous we vas ae. nave 30% . eter a 15 i = ands duet, doe ut a wee sear to ge att a | | 8 55 aner da sai keen leb oF zene, : pet 0³ eee 14 den vor sauaaed ue essed thse. file: sa! 1 wires bo omaiabangen 8 En es ak banges att * 1 : 8 52 Wbeesesee anked ot bane} 100 aan ws ve ana at e 1 hy bas sailor ads bos 440 len * egen ads „10 a i, 15 1 f aa sta ‘awe ‘suede ak wege besugatbou vad ies wks ves beben neun. brlrzas ese ode eke oe ‘wood un eee te oval aie 10 ene, 2 sa bee iner al K . fiers perc Gale l bt e abel r a0 0 -49- saving orientation of some families.” Family Roles. The roles of the different family members in making saving and investment decisions is largely a mystery. Some information on this question in a static sense is available from the “purchase influence" studies. Thus, in her study Wolgast found that “seeing that money gets saved“ was a joint responsi bility of husband and wife in 48 percent for sample families, of the wife in 27 percent and of the husband in 15 percent. In their study, Sharp and Mott reported that the purchase of life insurance was looked after primarily by the husband in 43 percent of the sample households, by both jointly in 42 percent, and by the wives primarily in 15 percent of the households, and that the frequency of dominance by the husband or by both jointly increased as income level rose. From their panel data on young married couples, Ferber and Nicosia find that saving decisions are reported as being made overwhelming on a joint basis. Four-fifths of the couples re- ported this practice; the husbands only in 14 percent of the cases and the wives in 6 percent. The very special nature of the sample — all being married six months or less -- undoubtedly influenced these responses (though it is hard to imagine a similarly high proportion of joint decisions in a corresponding sample, say, 40 years earlier). * Katona, George, Private Pensions and Individual Saving. Ann Arbor: Institute for Social Research, 1965. ‘at eee nee been hus Laut 0 : 0 sean, a . a Secs . 7 R nee @ el “oven, 560 wens x 302 . a 7 tes — rod Bassa Bs ab ae der baadaut 40 . Bint e el ob bande ads 10 bee ossreg 18 nt. 4 211 70 eee pa dary be besxoqer. gaol, bas gin | susose9 80 ab bosdead ‘ait, vd ebniaaiag atta badoot ane ed bao _sneor9g 25 at Wente ed xe, csbloitonued! a 0 n toda bars ab todanuos axis to ansage . ak eee e visatat 0 cd 50, basdand n xd eee, Re, 0 1. 10 ti a Oh | . 206 iel, e gated, wa beet, 9 | ewotetoab saree! tt bene n salquos hie 20 varias duet e . * a9 at x ad? 26 2480159 * sk 1405 banded ada eee . Ae ovina else dev aer been 2 ak erte oa ban e 1 vibe, — „ 10 edad ate > hee ai iis. 77 uP 58 7 Ay xriboogaanros a ne orate sate. 3 on 0 The fact remains, however, that these few studies and the general nature of the findings only serves to highlight the need for information on the dynamics of the family decision-making process with regard to saving and investment behavior. Role of Teenagers. Rather surprisingly, the one family member that seems to have received some attention in the litera- ture with regard to saving and investments is the teenagers. Hence, it would seem desirable to summarize briefly some of the findings for this group. In his study of teenagers cited earlier, Cateora reports that his sample of teenagers placed great emphasis on saving. He finds that the higher the social position of the family, the more concerned were teenagers with saving. This finding seems Gate borne out by other studies. Thus, in their study on the reports of college students about their parents, Honey and Smith noted that when these students were at home, over four-fifths reported saving some money. (Also, nearly two-thirds kept some form of expense records and nearly 40 per- cent contributed to their own support.) In another study of 610 "lower class" teenagers in six Southern Illinois counties, Fults and Zunich found that 22 per- cent saved on a regular Sab In still another study in the Same area, of 294 randomly selected 13-18 year-old teenagers * Fults, A.C. and M. Zunich, "Money Management Practices of Teenagers from Low-Income Families", Journal of Home Economics, Vol. 59, January 1967, pp. 45-47. 611 dos alba, wit sea eas e a a ay 1 is a fds base one ke of 7160 e 1 g neee tas? oda . slice ads 0 0 naa ae if i yy. ye 5 ener Snead nk baa salves | 65 auen d ma . ne 2 . ; 2 ear ete etna n ots „estar een ‘ tl “Sa mh ebene one erke ‘prs ee ee 9 a eee aid ob enen ‘fe enten ‘ot angen 2 To S0 eee eee oy aldaxineb mans bivow at 0 ‘abide Win Mi Hee, eee ie bee ets 308 P aztoqe7 ede eee beste edeen 50 e ade -anives no esd 058 st eite ‘ko ‘abel onl ien ada to eekaeed Lers08 oda weck nas na 5 2 rest dtiw ass 100 — eur sabi ref v two 00 0 0 enge tbat N Iota 5000. asmabuite Los 10 eden 4 ao xu36. ah ne oe 26 or esasbuse od ah, aaa bebe 40158 boa Aeneas A 2 efsass el . eden SOR gatvas ben roger d N 1 7100 ne en ‘goal ab ro beast 0 exe! amit agen ‘ ot bits 1 Le | (-syoqaue tho stad es bessa; | 110 a ebase ele sewer” ‘Ose 10 2 N aeg 88 0 beet me ite aa eee eeti bb ota u buse rads ann Iisa ot uaene: sien etegnawed 1 aer beneles deen Rs. * —51— in Southern Illinois high schools 65 percent were earning money in addition to getting an allowance and virtually all of them were trying to save some money, the principal saving objective being for education (64%), for the future (26%), or for a speci- Fe product or service (102). The principal forms of saving were saving and loan associations (44%), banks (38%), and govern- ment savings bonds (112%). It is also pertinent to mention in this section the study of the spending and saving patterns of adolescent siblings by Phelan and Schvanevaldt. They found very different attitudes toward saving on the part of the two siblings as well as between Beh of ele siblings and their mothers, even though the spending and saving habits of the siblings seemed to be influenced by social class of the parents, by age of the child and by amount of supervision received from Slee eee Appreciable differ- ences were also noted between siblings in their money-handl ing practices. These studies would seem to suggest that despite the re- puted spending tendencies of teenagers they are generally highly saving conscious and undoubtedly develop saving and investment attitudes during these years that influence their behavior for the rest of their lives. * Zunich, M. and A. C. Fults, Teenage Economic Behavior: Earning and Saving", Journal of Home Economics, Vol. 59, Nov. 1967, p. 739. iste 10 lle nene am: omer * um wal wvtavetdo: eee 1. dl nnd ott pe ante wees on 2 ne q ee 8 107 10 (ras) au ca 5 Gada 1 datvas te: ‘aura fagtoning en AOL) peer 20 15 sh od a ~iniveg bub 5 eee Gian) ee e ff AD, abnod’ = Use oka oke. 5 a d berbees og doontaxed oats 1 ye wgnkidte: suaduatads 19, ea53384 gave, ben Barbe nee ba 536 benen 5 Vie bauen yeti ug verde waa reset we 1tee an gs kale ons oa sda to ful a2 e 8 : "garbage 247 due ania tn it nt | xd bacweu Liat of 93 peewee agcilete, ada 39 aided @ - potboma 0 be bd “ods 20 *. 0 eien 05 to n erste deer . - anc va wart bavioows 0 eee 2165 ae elde. aoowaee bee 0 or ‘Qt od ieee suc babe n aga ee abe W. We tan ta cases ö weng rene, 0 nedsnvbpad waren snamteavat ein zavse dels duese, ber 1 205 en shod, coma yp + nang needs aces & 2 VII. A Modified Framework for Financial Decision-Making The studies summarized in the foregoing sections would seem to indicate clearly that financial decision-making within the family is influenced by a great many different factorg, and that the strength of these factors varies not only with the character- istics of the family but also with the nature of the decision that has to be made. In view of the disparate nature of these influences it seems hardly necessary or desirable to conclude this paper with a summary of how each of these influences effect family financial decision-making; in this respect the findings in each of the preceding sections speak for themselves. A 8878 useful menas of concluding this paper would seem to be to indicate how the framework presented at the beginning re- lating to the e of financial and nonfinancial deci- sions (Figure 1) might be modified on the basis of these findings to focus on the general factors that appear to enter into finan- cial decision-making within the family. This would seem all the more desirable because the theoretical representations of family behavior presented to date attempt to focus either on general family behavior,” on the relation between family behavior and wee other types of behavior, on the steps of the decision 1 * For example, see Edwards, K.P., A Theoretical Approach to Goal-Oriented Family Behavior", Journal of Home Economics, Vol. 62, November 1970, pp. 652-655. * 1 Burk, M. C., "An Integrated Approach to Consumer Behavior", Journal of Home Economics, Vol. 59, March 1967, pp. 155-162. 145 for example, described in the study by Schomaker cited earlier. 0 eee nn 1 n a piuay snotvo08, danse da en bmn abode e e a2 werde s eise et eh basis op sea: baw debe saensitth you they a td teoomel tak ani 1 engen per dade qian. 200, vobrav wien ane os sane aka eet. 20 Suan add) 4b eln 700 Nenn iat 10 s 30 baus onen lb at * waty N sbi od 1 uae but sue of, sidertpob x0 “grunnayae gina omen ot esc tonite eoomans de e 20 does wor, Xb. eee * a bw egnibalt 21 4 455 at jonkdommetatonb Kntonout® 9 i " -ooeteamods” 120 N Serge übung ada 10 “ot Ae | ons 15 dss d, W arid, we eden 9 deb tatoasadtnon farce Tatonnatt to nokislostegas ods 03 3 = agathnti sad to erand 983, 0 be lAlben od aig in (i n ast on zen a gg vn one Iexenny. ad? aot ass fle meee blu abr tte 0e ten 2 Ann 22 T eee Lee add, n oad olan # E Lazareg' no, Tori2ts 91) 50%) 90 ehe wai’, 9. eee 20 un beau aeg IIIa nd mo salen 40 10 * ponvaded . 0 denten e eat jo 1 * om. eee 3a 8 N er ni 1 a Le ** aa or dosongah atze * . 1 1 prem le ae tag Ar ee ee ters 8 Mun a otredes Jae u 04 1 8 e 25 (one -er e CORE ent e e a TT A ai 150 4 rokamoitae ed vonn ods at bn —53— or on the various factors that appear to influence buyer behavior and their interrelations.” These other frameworks are extremely useful in themselves. The present framework is meant as a supple- ment rather than as a substitute, with the specific objective of focusing on family financial decisions and on the dynamics of the decision-making process within the family. Such a modified framework is presented in Figure 2. The three rectangular boxes at the top of the diagram represent gen- eral exogenous forces influencing the financial position of the family and the attitudes of the different family members. Thus, reference groups (including mass media and other printed materials) clearly influence the attitude of both husband and wife. Also, the characteristics of the individual family members obviously influence their attitudes; and some of their characteristics, such as occupation and employment status, influence the financial resources of the family. The third set of exogenous factors re- flects primarily external economic events, the principal influence of which is on the family's financial 0 The attitudes of husband and wife affect financial decisions not only directly but also through their interactions in the formation of family goals. At the same time, their attitudes, combined with the characteristics of the different family mem- bers, determine the structure of the family, which in turn will 5 N Howard, J. A. and J. N. Sheth, The Theory ef Buxex Behavior, New York: John Wiley and Sons, 1969. ** If one of these members is not present, the box for that person will be empty. sokyutiod mes eee 0 un pa : eqn + Se 45 6 eee ane ots atrovent advo geen? os 0 vt oa a * AK een 0 an aas at dene e at eau! Lit yar 20 svtiostde „10 . ee kee. a 28 sad? 3 nag edd 0 ta! wee kekse faboueat e 0 oid to 62 : | | . eee cuts 16s eee . ! re gary Ta rn. es: i ~ eft. . sug tt 8 boaanesag et Kiesen ie a7 t i dg an oft 35 ae eng iskanustt® of getoanuftat e070) cout pares ine susie) as te ene odd b 7 0 Laber e Bega 2000 das les stan gattuLoat) aquess 2 grein j * oti | Nee bus det Bod’ 10 ety 3h3a8 ‘eof 3 2 — — en m 281 odd. $0 gor oti Jo ee ebenes, * e 2 ee 41 dn Wines Seg ivtom pr ‘Ne woksabasts eotsenrexoutad>. n ‘eo vane bos 15082330 oe endet, ads We ung dove Tg bers aarsuquoce & 1 ua oνuj˖ aroregoxs ie 20 bhi? att ts 45 1 8 00 1 * ae kdl vd 3 nnen ounce ena Abe i rey ssaontioaar bit: * 1 uz a0 rs i ene babs 70 wie baa daa ta 1 ae nie odd pho Une ake 00 48 dale a0 ! n . eb 85 sheds, elt Bae ott vA! es e oa on YL ion ‘sean Aik afd 10 sorsabiagoe Lite wae ak 1 ben N 10 eam. oes — Wt Ae Ht an A. e 5 ö Po ee en . . sods ta) avd e eee Jog 6 ya) ce 7 mh i ue) | 1 =5h= influence financial decisions, especially money management and spending decisions. In addition, financial resources obviously affect the structure of the family, and influence financial de- cisions through this means as well as directly. No attenpt has been made in this diagram to single out indi- vidual financial decisions or to highlight individual variables among the broad categories depicted, nor has any attempt been made to allow for the attitudes or preferences of family members other than the wife or husband. This is partly for the sake of simplicity and partly because for most types of financial deci- sions the ee teiatas of these other family members tend to be much less important than those of the husband or the wife, at least on the average. Nevertheless, it is hoped this framework will prove useful as a basis for future studies of family fin- ancial decisions and as a basis for further development of models of such decisions. This diagram can also be used to illustrate how the other papers presented at this conference interrelate with each other. Thus, the paper by Burk Strumpel deals with the endogenous ele- ments of attitudes, motivations and aspirations of different family members. One other key endogenous factor, the family size (which is part of family structure) and its role in family economic behavior is the subject of the paper by Easterlin. The exogenous role of reference groups is dealt with in the papers by Segal and Maynes, while the influence of one type of external Meere beet been esl, PY wasonatoed ya tin rien . tae tig 15 10 eee te Lazear. as Hew 60 eee ei, aqvords er bat ato eite “93 1545 ards ok bas nad e _seldatzey Tabbtythat cee i es 0 auptetosb ** 10 800 dees. ue. sad zb esel ec sss — 5 auen N ae sronereang, to ahn bge ad 30% i Yo else sit 01 ans st Mar -bonideun! 5s ly 650 f des Lntongatt to dsgbi Jess get suisoed ylaaag bas % * 0 ad. bined een, duns ade et, oe „ . . 01 50 bandewd ** % Gn aunt n 1 abt bagod os Pat , soo fenen ee 4 0 no ai “rat ten 20 go ze eue 101 rand # BR duese Heh “Yo sneagoterab gears aot asd so bes waotetae® I ae 1 lee gost Yo a ashe ons — endes: 05 — a eels ans aurgaih an a hν d ne paakexresad oe ede 35 bormeastg & e — r chr lv 44 eie ar vr an 1 e 26 nee uns uo) uv 30m etage 10 8 in 245 nee ovonagobae ve dete and eee Uf elie nk ator aie e (euere Lie * ang bs Hak) tre, aft ese sera eid to per oda er ve dot o exageg sila b dale Slash ar Shen aol 55 des, iagraaxs 10 De sie * e . 1 or ne ~55- Characteristics of individual External family members events Reference | Ae of busband- ) (attitude of rer Financial resources 5 | | * Family \ structure e e e ee AL -D eee e e eee Ss Figure 2. A Representation of the Factors Entering Into Financial Decisions Within the Family Rye ht 7 vt 8 co . ne f 1 AG ae f AN 1 9 15 ö 11 1 . 0 „ N i ia ae . 1 1 Ee i (Gia b bath 8 7 N ee plage ar r ne Were N te 4 9 i wet - ‘= é : 5 0 5 9 i ae . 4 r 2 1 0 % % VATOM ARTE -56= 1 variable on family behavior is considered in the paper by Scott and Shore. The paper by Schott considers trends in con- sumer financial management from a more macro point of view and relates more to the end-product of asset management rather than to the process itself. Clearly, these papers are not all inclusive nor do they re- late only to financial decisions. Taken as a group, they should contribute to our knowledge of this important field and should point the way toward still further contributions in the future. 0850 eds it — me dete dune Lac ot abner? mrobzenos diosa inom. q u ci deten 1 sou 10 eee ‘od shar nr ee “Skeet = * 2 fr 1 ote shade tee. ote 5 20 enen ee e * I re warts d aoe ese? seaotakonts dsa * iy =e blue bug biett dees ei to aqhotwant 100 92 1 a" „g sax at Seed geg e 11126 ee vay Because of the limitations maintained concerning the length of papers published as working papers, the appendix is not included. 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