Spending with a difference

The most commonly-accepted explanation of spending habits seems to be taking a new path.

Families across the country, even in the same city, may earn the same incomes, but their spending habits could be vastly different. Till now, the most commonly-accepted explanation of spending habits has been the SEC, or socio-economic classification. Since that has come under attack for a variety of reasons (it classifies households on the basis of the job/education of only the chief wage earner), internet consulting firm JuxtConsult and economics research firm Indicus Analytics have come up with a new classification, a life cycle-based one.

The study finds, for instance, that ‘dynasties’, or three-generation joint families tend to have the highest average monthly family incomes (Rs 6,530 as compared to the average of Rs 5,930 for all families). Not surprisingly, such families also have the highest incidence of inherited property (74 per cent of all such households have inherited property) and the highest ownership of automobiles. A little more than one in five families in the country fall in this category.

The majority (45 per cent) of Indian families are ‘maturing mentors’, that is, the youngest kid in the house is more than 12 years old. A third of ‘maturing-mentor’ families have mid-sized cars.

Nest-builders, or young married couples without any children, account for just 7 per cent of all families while single-independents or ‘free birds’ (with average monthly family incomes of Rs 6,385) account for a little over 1 per cent — ‘free birds’ tend to prefer reading in English (6 per cent), while ‘dynasties’ have the lowest such readership (0.5 per cent). ‘Nest-builders’ are the heaviest listeners of the radio while ‘baby-sitters’ (a fifth of all Indian families fall in this category, with the eldest child below 12 years of age) are the heaviest users of Internet at home.

The study also points out that Kannadas have the highest monthly per capita incomes (Rs 2,190 as compared to

Rs 1,350 for all Indians) while Biharis have the lowest at Rs 730. Marwari families tend to spend the highest proportion on servicing loans and liabilities (15.4 per cent), Telugu families tend to save the most (20.7 per cent), Gujarati and Marwari households have the highest ownership of automobiles (including two-wheelers) at 43 and 39 per cent, respectively, and Tamils and Kannadas have the highest ownership of colour TVs (89 per cent of such families have a colour TV).

The study is based on a survey of 16,000 households in 40 cities and over 12,000 households in 480 villages.