Abstract
Policy-makers and practitioners need a good understanding of older people’s expenditure and consumption to inform the design of policies and services that affect their lives. This paper uses data from the 2010 Living Costs and Food Survey to examine and explain levels and patterns of expenditure among households headed by someone aged 50 and over. Expenditure is defined based on 12 broad categories, which reflect the international standard ‘Classification of Individual Consumption according to Purpose’, and is equivalised to control for household size. We report the results of cluster analysis which segments older households depending on their predominant patterns of expenditure. CHAID (decision tree) analysis and bivariate analysis is then used to understand the profile of each cluster in relation to their demographic, socio-economic and other characteristics. Based on their patterns of expenditure, six distinct clusters of older households emerge from the analysis. The findings raise important questions for government policy in the UK in relation to the extent and nature of expenditure poverty among older consumers.
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Notes
The OECD modified equivalence scale is the standard scale used for equivalising income by the Statistical Office of the European Communities (EUROSTAT) and is used widely across government in the UK. The scale assigns an equivalence scale of 1 to the first adult in a household. Each subsequent adult and child aged 14 and over is assigned a value of 0.5 and each child aged under 14 is assigned a value of 0.3 (Office for National Statistics 2013).
Details of the cluster analysis methodology are available from the authors on request.
Explanation of CHAID analysis from Shury et al. 2004.
The variation in average spending by cluster on each of these categories was highly significant in ANOVAs (p < 0.001).
All reported differences between clusters are statistically significant (p < .05).
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Acknowledgments
We are grateful to the Economic and Social Research Council for funding this work as part of their Secondary Data Analysis Initiative. For further information on our programme of work, please see our website: http://www.bris.ac.uk/geography/research/pfrc/esrc/. Thanks also to Professor Kelvyn Jones and Dr David Manley for advice, and to the two anonymous referees for their helpful comments on an earlier draft of this paper.
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Hayes, D., Finney, A. Dominant Patterns of Expenditure Among Older People in the United Kingdom: Segmenting the Older Consumer Using the Living Costs and Food Survey. Population Ageing 7, 97–113 (2014). https://doi.org/10.1007/s12062-014-9097-4
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DOI: https://doi.org/10.1007/s12062-014-9097-4