Introduction
In a press
release by the US Bureau of Census, it recounted that the United States ranks
second in terms of the number of people 80 years and older. Not
surprisingly, China ranks the first in the size of its older adult population.
The challenge of global aging transcends its impact on government budgets ion
China. It promises to restructure the economy, reshape the family, redefine
politics and even rearrange the geopolitical order of the twenty-first century.
As labor forces shrink, economic growth may stagnate or even turn negative in
many countries--not just during cyclical downturns, but decade in and decade
out.
Global aging
poses fundamental economic challenges that reach far beyond public spending.
When people retire, they begin to consume more of their income and save less
for the future. As a larger share of the population enters its harvest years
over the next three decades, the OECD projects that the private saving rate in
the developed world could fall by more than half (OECD, 1996). Some economists
say that this isn't a problem since societies with stationary or shrinking
workforces won't need to invest as much to maintain the same rate of growth in
output per worker. Others disagree. They argue that the pace of technological
progress may be linked to the volume of investment a society undertakes. An
optimistic outlook for productivity, moreover, assumes that growing fiscal
deficits won't crowd out national savings and productive investment entirely.
Most
studies of older consumers have focused on their economic status as a
determinant of market place behavior with little emphasis on their intrinsic or
interpersonal reasons for shopping or the effect of social activity on shopping
behavior. In both the 50-to-64-year-old and the 65+ groups, consumers are often
long-time members of the community with many social and business relationships
that influence their patronage behavior (Miller and Kean 1995). Granovetter (1990)
considered that economic-based activity was "embedded in" the
networks of personal relationships and argued that each directly affected the
other.
A study by Paulin (2000) showed that
older consumers,
who are expected to account for an increasing share of expenditures, do not
differ significantly from younger consumers in their spending patterns; the
underlying tastes and preferences of subgroups of older consumers did not
change significantly.
Although previous
studies offer some insight by recognizing and examining the importance of
expenditures by older consumers, many of those studies concentrate on spending
patterns at just one or two points in time. Furthermore, the consumption
behavior of the older population in China shall be illustrated in this proposed
study. This proposed study shall also include elements from earlier studies,
but takes the analysis further: first, expenditure trends are analyzed for
different age groups within the older population; second, experiments are
designed to test whether tastes and preferences differ over time for older
consumers in China.
Conceptual Framework
This proposed
study shall utilize the consumer alienation theory on the older consumers in
examining the economic effects of consumer behavior in China. The concept of
consumer or marketplace alienation recognizes the emergence of a psychological
attitude as the result of four underlying constructs (rather than discrete
measurable subscales) - marketplace powerlessness, normlessness, isolation, and
self-estrangement (Allison, 1978).
Allison (1978)
offers the following descriptions of the underlying constructs of consumer
alienation. Consumer powerlessness may be defined as feelings held by consumers
that they are unable to help determine market practices, and are unable to
control the market environment or events within the marketplace. Consumers may
have a sense of powerlessness if they feel they cannot influence business
behavior to be more consistent with a buyer's needs. Lambert (1981) suggests
that an alienated consumer believes he has no control over any of the aspects
he faces in dealing with the marketplace.
Research
Aims
This
study seeks to achieve the following objectives:
1. to illustrate the consumption
behavior of China’s older population (65 years old and above)
2. to assess the relationship
between consumption behavior and age
3. to determine the relationship
between China’s older population and consumption behavior
4. to evaluate the effects of
China’s older population consumption behavior
5. to evaluate the economic
implications of the consumption behavior of China’s older population
Statement
of the Problem
This proposed study intends to investigate the
consumption behavior of China’s older population (65 years old and above) and
its economic effects on the businesses that specifically caters to their needs.
Moreover, since the older population in China is huge, this proposed study
posits that they affects the economic activities in China.
Hypothesis
This
proposed study shall test the following null hypothesis:
- There is a significant
relationship between consumption behavior and China’s older population
- There are economic
implications of the consumption behavior of China’s older population
Significance
of the Study
This study seeks to contribute in the
literature in terms of the relationship between age and consumption behavior.
In particular, it seeks to illustrate the economic implications of Chinese
older populace. Since, there is a scarcity of research on this area. This study
seeks to fill the gap in literature. This is also targeted to government
planners and business strategists in developing their policies and plans that
targets the older population since they constitute a bulk of consumers in the
market today.
Review of Related Literature
Global aging is
the result of two fundamental demographic forces (Peterson,
2002): rising
longevity and falling fertility. The first is increasing the relative number of
the elderly in the population, while the second is reducing the relative number
of the young.
Beth
Harrison (1986) compared consumer units in which the reference person was
between the ages of 65 and 74 with those in which the reference person was 75
or older. Despite the brevity of her analysis, Harrison described an important
finding: persons 65 years and older are not homogeneous. She also found that
those 75 or older spent less for most goods and services than those 65 to 74.
Another study by
Thomas Moehrle (1990) examined expenditure patterns by families with reference
persons aged 62 to 74. Those whose reference person was involuntarily
unemployed or working without pay were excluded from the sample. Moehrle (1990)
found that, regardless of income class, workers had higher expenditures for
most goods and services than nonworkers.
More recently,
Mohamed Abdel-Ghany and Deanna L. Sharpe (1997) analysis to examine levels of
expenditures for those same two age groups (62-74). Their analysis allowed them
to make estimates about how tastes and preferences differed between the groups
when characteristics such as income, family size, and region of residence were
held constant. Abdel-Ghany and Sharpe found differences between the two groups
in every expenditure category they examined.
Similarly, Rose M. Rubin and Michael L. Nieswiadomy (1997) combined
results of several studies, into a book describing characteristics and
expenditure patterns of older consumers. One of their more interesting
extensions to the earlier analyses was that they attempted to measure the
effects of change on the lives of older consumers, first by comparing
regression results for pre- and postretirement families(8) and then by
examining changes in tastes and preferences over time.
The senior
citizen or elderly market is traditionally defined as consumers age 65 years
and older (Kim, Miller, and Schofield-Tomschin,
1998).
Analysis of age trends provides highly accurate projections for the future that
will allow alert marketers to recognize potential opportunities years in
advance. Moreover, it can also predict the products, services and goods that
shall be in demand. In China, where the population of the older segment of the
society is expected to increase more rapidly, it provides an impetus for
businesses and the government to affect specially services and products that targets
the market.
Little
comparative research presently exists that has investigated whether or not
behavioral differences between older consumers and consumers in other age
categories are identifiable and measurable. Tongren (1988) suggested that
comparative studies were needed to determine if the behavior of older consumers
was affected by their activity level and whether or not these characteristics
made them unique in the marketplace when compared with younger consumers.
Etzioni
(1988) emphasized that the choices people made, including economic choices,
were most often based on both the needs of the individual and the needs of his
or her collective group or community. His theory proposed that moral commitment
interacted with economic factors to influence the overall behavior of
individuals within their social environment. Reasons for shopping locally have
previously been found to result from attending loyalties (Miller and Kean
1997); thus, moral, social, and economic variables are all important considerations
in studying the patronage behavior of late middle-age and elderly consumers.
Research on the
current and future older market will have implications for small-sized
locally-owned retail establishments who are struggling to maintain a customer
base in communities (Stone 1995). Lumpkin and Greenberg (1982) and Lumpkin
(1985) found consumers age 65 and older shopped more frequently in stores where
they were known, and that older consumers depended more on assistance from
store personnel than did younger consumers. Lumpkin's (1985) additional
research on the elderly found that those who were more actively involved in the
community, anti in general more socially active, enjoyed shopping locally, and
that they shopped locally because of the merchants' reputation rather than
their pricing structure or brand offerings.
It was important to first differentiate those individuals who were
in the later part of middle age (50-to-64 years old) from those who would be
classified as older age (age 65 and older) to see if differences existed in
terms of social and market place exchange. In reviewing past research
methodology, Tongren (1988) found research that compared older consumers with
younger consumers problematic because multiple threshold ages had been used to
describe entry into the older age category. The majority of the 67 articles he
reviewed designated age 65 as the threshold for the older market. Tongren
proposed age 65 as the entry into older age in light of past research
applications.
Several business decisions are based on misconceptions about the
older consumer. With the number of mature consumers increasing, such findings
should be of particular concern to marketers (Johnson, 1996). Two criteria commonly considered by marketers when evaluating a
possible market are size and income. While much is known about the increasing
size and market potential of older consumers and the markets to which they
devote their consumption resources, very little is known about their overall
attitudes toward the marketplace.
Methodology
This proposed study shall utilize the descriptive of
research which allows for a critical examination of a certain phenomena. It
seeks to describe what is taking place and provide an evaluation of the events
based on examination and observation (Creswell, 1994). The descriptive type of
research allows for the use of interviews, questionnaire and observations.
The research described in
this document is based fundamentally on quantitative research methods. This
permits a flexible and iterative approach. During data gathering the choice and
design of methods are constantly modified, based on ongoing analysis. This
allows investigation of important new issues and questions as they arise, and
allows the investigators to drop unproductive areas of research from the
original research plan. Moreover, the result of the study shall be compared and
verified based on the existing literature on the subject.
This study basically intends
to investigate economic impact of consumption behaviour of the older population
in China. By older, this study shall utilize the standard bracketing that old
population refers to those 65 years old and above. China which maintains of the
highest population of old population had been adapting its marketing,
production of services and products specifically to target the older
population. This study shall outline the consumption behaviour of the older
population using a survey and shall use official statistics from business that
specifically caters to the older population in assessing the impact of their
consumption on the companies.
The primary source of data
will come from survey and interviews conducted by the researcher on the older
Chinese population. Moreover, economic analysts shall also be interviewed to
provide predictions on the impact of the adult population on economics. The
secondary sources of data will come from published articles from business and
economic journals, books and related studies on consumption behaviour,
economics of consumption and economic impact of older population consumption.
For
this research design, the researcher will gather data, collate published
studies from different local and foreign universities and articles from health
and college journals; and make a content analysis of the collected documentary
and verbal material. Afterwards, the
researcher will summarize all the information, make a conclusion based on the
null hypotheses posited and provide insightful recommendations on the dealing
with issues on consumption of the older population in China.
References
Abdel-Ghany,
M. and Sharpe, D. (1997) Consumption Patterns Among the Young-Old and Old-Old.
Journal of Consumer Affairs, summer 1997 pp. 90-112.
Ageing in OECD Countries: A Critical Policy Challenge, Social Policy
Studies no. 20 (Paris: OECD, 1996).
Allison, Neil K. (1978). "A
Psychometric Development of a Test for Consumer Alienation From the
Marketplace," Journal of Marketing Research, 15, 565-75.
Etzioni, Amitai (1988), The Moral Dimension: Toward a New Economics,
New York: Free Press.
Granovetter, Mark (1990), "The Old and the New Economic Sociology:
A History and an Agenda," in Beyond the Marketplace, Roger Friedland and
A. F. Robertson (eds.), New York: Aldine de Gruyter: 89-112.
Harrison, B. (1986) "Spending patterns of older persons revealed
in expenditure survey," Monthly Labor Review, October 1986, pp. 15-17.
Johnson,
E. (1996) Cognitive age: understanding consumer alienation in the mature market.
Review of Business, Vol. 17.
Lumpkin, James R. (1985), "Shopping Orientation Segmentation of
the Elderly Consumer," Journal of the Academy of Marketing Science, 13(2,
Spring): 271-289.
Lumpkin, James
R. and Barnett A. Greenberg (1982), "Apparel-Shopping Patterns of the
Elderly Consumer," Journal of Retailing, 58(4, Winter): 68-89.
Kim,
S., Miller, N. and Schofield-Tomschin, S. (1998) The effects of activity and aging on rural community living and
consuming. Journal of Consumer Affairs, Vol. 32.
Miller, Nancy J. and Rita C. Kean (1995), "Reciprocal Consumer
Behavior Intentions in Rural Communities: Inducements to Shop with Local
Retailers," paper presented at the Rural Retailing: Emerging Community
Issues Conference, Salt Lake City, UT.
Miller, Nancy J. and Rita C. Kean (1997), "Factors Contributing to
Inshopping Behavior in Rural Trade Area: Implications for Local
Retailers," Journal of Small Business Management, 35(2): 80-94.
Moehrle, T.
(May 1990) Expenditure patterns of the elderly: workers and nonworkers. Monthly
Labor Review, pp. 34-41.
Paulin,
G. (2000) Expenditure patterns of older Americans, 1984-97.
Monthly Labor Review, Vol. 123.
Peterson,
P. (2002) The shape of things to come: global aging in the twenty-first century.
Journal of International Affairs, Vol. 56.
Rubin, R. and
Nieswiadomy, M. (1997) Expenditures of Older Americans (Westport, CT, Praeger
Press.
Stone, Kenneth E. (1995), Competing with the Retail Giants: How to
Survive in the New Retail Landscape, New York: John Wiley and Sons.
Tongren,
Hale N. (1988), "Determinant Behavior Characteristics of Older Consumers," Journal of Consumer
Affairs, 22(1): 136-157.
No comments:
Post a Comment