Satisfaction and Education: A New Approach to Understanding Consumption Patterns

Abstract

This study estimated the effect of education on the consumption patterns of urban families. This was done by determining education elasticities, using linear multiple regression equations with logarithmic transformations for appropriate independent variables, for total family living expenditures and for 19 different categories of expenditures for a representative group of families. The source of data was the Bureau of Labor Statistics' 1960‐61 Survey of Consumer Expenditures General Purpose Tape. Expenditure categories were classified into two groups based on the relative satisfaction derived from the consumption of the goods: (1) future‐oriented‐goods that create relatively more satisfaction in the future than in the present; and (2) present‐oriented—goods that create relatively more satisfaction in the present than in the future. The general hypothesis of this study is that the education of the father will affect the expenditures of families differently for various categories of goods and that these expenditures will vary on the basis of whether the goods are present‐ or future‐oriented in satisfying power. The results of this study give indication that education of the father does influence the expenditures of families, especially those for “future” goods.