The effect of household life-cycle stages, poverty, and demographic characteristics on rental expenditures

Rent-to-own outlets market to the poor. There is a lack of scholarly research on rental expenditures of consumers across the household life cycle.

The purpose of this study was to investigate the value of the household life cycle as an indicator of the allocation of rental expenditures by families. This study also examined the effect of poverty, ethnicity, family size, and education on rental expenditures. Rental expenditures on furniture, audio visual equipment, and appliances, as reported by the 1992 Consumer Expenditure Interview Survey, were the focus of this study.

A sample size of 25,953 households was used. A total of 307 occurrences of renting appliances, furniture, and audio visual equipment representing 171 households was provided.

An Analysis of Variance (ANOVA) was used to examine whether the rental expenditure means were significantly different among household lifecycle categories. An ANOVA was also used to investigate whether the rental expenditure means were significantly different among categories for poverty, household life cycle, family size, family type, education, and ethnicity. Multiple regression techniques were used to analyze whether the household life-cycle variable was a more valuable indicator of rental expenditures than ethnicity, poverty, education, income, or family size.

This study offers further research to support the fact that consumers in poverty and consumers with lower levels of education are more likely to rent appliances and audio visual equipment. The rental of audio visual equipment was found to be generally decreasing across the household life cycle. The results of this study also found that the household life cycle is a valuable indicator of the allocation of rental expenditures by families. Implications for government, education, and business are discussed.