The value of household life cycle variables in consumer expenditure research: An empirical examination

We examine why studies reach contradictory conclusions concerning the value of the household life cycle model as a predictive tool in consumer expenditure research. Using a database of roughly 14,000 Canadian households, we find that household life cycle variables do not generally enhance prediction over a more parsimonious model containing a basic set of socioeconomic and demographic variables, even when comparing less aggregated to more aggregated expenditure categories. However, they do enhance prediction for categories that are defined such that the typical users of the category fall into a fairly narrow age range. The theoretical and applied significance of our findings are discussed and directions for future research are offered.