TITLE:
The Relative Importance of Household Budget Categories: A Best-Worst Analysis
AUTHORS:
S. R. Dominick, Nicole Olynk Widmar, Lalatendu Acharya, Courtney Bir
KEYWORDS:
Household Budgeting, Consumer Preferences, Household Resource Allocation
JOURNAL NAME:
Advances in Applied Sociology,
Vol.8 No.5,
May
11,
2018
ABSTRACT: Headlines regularly report on the changing or unmet needs of households and are often focused on costs of healthcare swamping household resources or childcare costs, forcing families to make tradeoffs that negatively influence children or society. Development of impactful educational programming and public policy necessitates an understanding of various households’ allocations of resources, specially the poor, food insecure households. In order to explore households’ relative prioritization of expenditures, a survey was conducted in this manuscript with a sample of Midwest residents (n = 1263), with the objective of evaluating the relationship between household demographics and budgeting prioritization of six expenditure categories. Individual respondent’s relative prioritization for budgeting categories was estimated using a best-worst experiment for six expenditure categories. Housing was the most important expenditure category identified for the sample. Housing also received the largest share of relative importance for two of four latent classes identified. For both low and the very low food secure households a significant and positive relationship was found between their food security status and the relative importance placed on childcare and transportation. Identification of segments of respondents with specific priorities (e.g., childcare expenditures) may aid in the development of impactful policies, particularly for at-risk populations (e.g., food insecure households).