Extrahousehold Giving in Popular Gift Categories: a Socioeconomic and Demographic Analysis

Janet Wagner, University of Maryland
Thesia Garner, Bureau of Labor Statistics
[ to cite ]:
Janet Wagner and Thesia Garner (1993) ,"Extrahousehold Giving in Popular Gift Categories: a Socioeconomic and Demographic Analysis", in NA - Advances in Consumer Research Volume 20, eds. Leigh McAlister and Michael L. Rothschild, Provo, UT : Association for Consumer Research, Pages: 515-519.

Advances in Consumer Research Volume 20, 1993      Pages 515-519

EXTRAHOUSEHOLD GIVING IN POPULAR GIFT CATEGORIES: A SOCIOECONOMIC AND DEMOGRAPHIC ANALYSIS

Janet Wagner, University of Maryland

Thesia Garner, Bureau of Labor Statistics

The purpose of this research was to analyze the effect of the socioeconomic and demographic characteristics of households on the probability of expenditures for extrahousehold gifts, including clothing, toys, plants and flowers, china and dinnerware, and small appliances. Data were from the 4,139 households in the 1984-85 Consumer Expenditure Survey. The results of probit regression analyses demonstrated that income, family size, stage in the family life cycle, and ethnicity are related to the probability of expenditures in all categories. The number of female adults is related to the probability of expenditures in all categories except plants and flowers and small appliances. The results for education, urbanization and region were mixed.

Gift-giving is a topic of growing interest in consumer behavior. Much of this interest has been inspired by the Sherry (1983) model, in which consumer gift-giving is explored from an anthropological perspective. In the holistic tradition of that discipline, the gift-giving model integrates concepts from sociology and psychology. The economic dimensions of gift-giving are acknowledged but not well-developed, reflecting the ambivalence of anthropologists toward economic theory and the indifference of economists toward some types of nonmarket exchange. Although gift-giving involves nonmarket exchange, most gifts are purchased in the market, suggesting that economic theory and methods may have much to contribute to development of the gift-giving model. Exploring the economic aspects of consumer gift-giving is an important research endeavor, because gift expenditures may account for as much as ten percent of the typical household budget (Belshaw 1965). Extrahousehold gifts-gifts given to individuals, households and organizations outside the consumer unit-are estimated to account for at least one-third of that amount (Belk 1979; Garner and Wagner 1991).

Previous research on economic aspects of extrahousehold giving has focused on total annual gift expenditures (e.g., Garner and Wagner 1991) and expenditures for charitable contributions (e.g., Reece and Zieschang 1985). The purpose of our study was to extend that research by exploring expenditures for purchased gifts. As such, we analyzed the effect of income, in conjunction with a set of other socioeconomic and demographic variables, on the probability of households reporting expenditures for extrahousehold gifts in popular gift categories including clothing, toys, plants and flowers, china and dinnerware, and small kitchen appliances. Data were from the internal files of the Bureau of Labor Statistics' (BLS) Quarterly Interview Component of the 1984-85 Consumer Expenditure Survey (CEX) (U.S. Department of Labor 1984-85), the largest and most comprehensive source of information on the expenditures of U.S. households, classified by socioeconomic and demographic variables. The results should be of interest to scholars, in developing economic aspects of the Sherry (1983) model, and to marketing practitioners, in segmenting the market for gifts.

ECONOMIC THEORY AND EXTRAHOUSEHOLD GIVING

According to Sherry (1983), gift-giving has three major components-a gift, an exchange relationship between a donor and a recipient, and a situational context. Because gift-giving involves social, rather than economic exchange, anthropologists (Burling 1962; Cancian 1966; Douglas and Isherwood 1979; Herskovits 1952) and economists (Arrow 1975; Becker 1974; 1976) have debated the appropriateness of applying economic theory and methods to gift-giving. The focus of this argument has been whether or not utility maximization, the principle assumption of the economic theory of consumer behavior, can be applied to gift-giving. Under utility maximization, it is assumed that consumers allocate income among commodities-goods and services needed or wanted for personal consumption-subject to a budget constraint. The objective of such decisions is to maximize personal satisfaction. The objective of giving, on the other hand, is purportedly to maximize the satisfaction of others. Becker (1974;76) suggested resolving this argument by extending the concept of a commodity to include social needs, such as love, status, or distinction, which are met by giving. In purchasing and giving gifts, consumers produce "social commodities" by combining market goods and services, household resources (such as income and education), environmental factors (such as the norm of reciprocity), and the characteristics and satisfaction of recipients. Social commodities produced by giving enter the household utility function. Thus, in giving, consumers maximize both their own satisfaction and that of others.

Consumers differ in the utility engendered by giving. Although most choose to give, some do not. Those choosing to give must also make decisions about what goods and services to give. According to Lutz (1979), the choice of a gift is one of the most important decisions in the study of consumer gift-giving.

The social norm motivating gift-giving is reciprocity, the obligation to give, receive and return gifts (Mauss 1967). Reciprocity is related to the extent of social interaction between donor and recipient. While most gift-giving occurs within the family, giving is also extended to unrelated individuals, households and organizations with whom family members have frequent contact (Becker 1974; Belk 1979).

Research on the social dimensions of giving shows that extrahousehold gifts create and maintain "networks of love", cross-household ties with family, kin and friends (Belk 1979; Caplow 1982; Cheal 1987). Social networks differ with respect to their range and their composition. According to Douglas and Isherwood (1979), the range of a household's social network increases with income (the central concept in an expenditure analysis). This suggests that, as income increases, households have more opportunities to give gifts. Therefore, we expected to find that in every gift category the probability of extrahousehold gift expenditures would increase with income. Social networks tend to be homophilous-that is, they tend to be composed of households of similar socioeconomic and demographic status. This suggests that within a socioeconomic or demographic group, households may have similar tastes and preferences for gifts. By extension, we expected to find that socioeconomic and demographic groups would differ in the types of gifts given.

The "best" gifts-those most likely to maximize the satisfaction of both donor and recipient-are personalized by age, sex and taste, and can be conspicuously consumed (Caplow 1982). Thus, the most popular gift is clothing. Other popular gifts include toys, plants and flowers, jewelry, china and dinnerware, small appliances and sporting equipment (Belk 1979; Caplow 1982; Jolibert and Fernandez-Moreno 1983). In this research, we used a probit qualitative choice model (Maddala 1984) to analyze the effect of income and other socioeconomic and demographic variables on the probability of households having expenditures for extrahousehold gifts in selected product categories. The categories chosen were those shown by a frequency analysis to be the most important, including clothing, toys, plants and flowers, china and dinnerware, and small kitchen appliances.

METHOD

Data were from the Quarterly Interview Component of the 1984-85 U.S. Continuing Consumer Expenditure Survey (CEX). This survey is based on a rotating panel, the composition of which is determined by a national probability sample. The sample size is targeted at 5,000 interviews per quarter, with 20 percent of the consumer units rotating out and being replaced each quarter. In this survey, a consumer unit is defined as "... 1) all members of a housing unit related by blood, marriage or adoption, 2) two or more persons who pool their incomes to make joint expenditures, or 3) a single consumer who is financially independent." (U.S. Department of Labor 1989). The 4,146 consumer units in the sample were those from which four consecutive quarters of expenditure data were available. Seven consumer units reporting extreme values for either total annual expenditures or gift expenditures were eliminated, leaving a subsample of 4,139 consumer units.

Our research was based on a probit qualitative choice model (Maddala 1984). Details of the model are provided in Appendix 1 of Garner and Wagner (1991). The probability of expenditures for extrahousehold gifts in each category-women's clothing, men's clothing, infants' clothing, plants and flowers, china and dinnerware, toys and small kitchen appliances-was modeled separately.

In the CEX, expenditure data are collected by product category. For each category, respondents are asked, "Since the 1st of (month, 3 months ago), have you or any members of your CU purchased or rented any of the following items for your CU or as a gift to someone outside your CU?" Respondents who answer "Yes" are asked to indicate which items were purchased for own use and which were purchased to be given as gifts. In our research, gift purchases were coded 1; purchases and rentals for own use were coded 0.

The independent variables included total annual expenditures (a proxy for income), family size, number of female adults in the household, stage in the family life cycle, ethnicity, education, degree of urbanization and region. [The use of total consumption expenditures as a proxy for income is consistent with the permanent income hypothesis (Friedman 1957), which posits that in the short run, households have more control over expenditures than income. While there may be bias resulting from the use of this proxy, because expenditures for gifts in each category are one component of total annual expenditures, this bias should be minimal, because extrahousehold gifts are, on the average, a relatively small part of total annual expenditures (see Garner and Wagner 1991).] Total annual expenditures, family size and number of female adults were treated as continuous variables. The remaining variables were treated as sets of dummy variables. Definitions of the independent variables appear in Garner and Wagner (1991).

RESULTS AND DISCUSSION

Absolute and relative frequencies for households reporting extrahousehold gifts in each category are presented inTable 1. These frequencies are consistent with the results of previous research on the social dimensions of giving by Belk (1979), Caplow (1982), and Jolibert and Fernandez-Moreno (1983) in showing clothing, plants and flowers, toys, china and dinnerware, and small appliances to be the most frequently given gifts. The highest relative frequency was in women's clothing; 36 percent of the respondents reported expenditures in that category. Women's clothing was followed by plants and flowers (34 percent), toys (28 percent), china and dinnerware (19 percent) and small appliances (19 percent).

Descriptive statistics and the results of the probit analysis are presented in Table 2. Total annual expenditures, the proxy for income, was positively related to the probability of expenditures in all of the extrahousehold gift categories. This result is consistent with economic theory and lends support to the results of previous research (Garner and Wagner 1991) showing that as total annual expenditures increase, the probability of extrahousehold gift expenditures increases.

Family size was negatively related to the probability of having an expenditure in all of the extrahousehold gift categories. That is, as family size increased, the probability of expenditures for extrahousehold gifts decreased. For most households, the primary social relationships are within the family. Consequently, the larger the family, the greater the demand for gifts to be given within the household, and the less likely it is that there will be extrahousehold giving. Camerer (1988) suggests that consumers derive more utility from giving to family members than from giving to others; because family members are familiar with each others' tastes and preferences, there is less risk involved.

The number of female adults in a household was positively related to the probability of extrahousehold gift expenditures in all categories except plants and flowers and small appliances. This finding lends support to the notion that women are responsible for the maintenance of the social networks of their households (DiLeonardo 1987) and corroborates the results of previous research showing that women are involved in most gift-giving decisions (Belk 1979; Caplow 1982; Fischer and Arnold 1990). The number of female adults had no effect on the probability of extrahousehold gift expenditures for either plants and flowers or small appliances, however.

As suggested by Sherry (1983), stage in the family life cycle affected extrahousehold expenditures in all of the gift categories. Its effect was most extensive, however, in infants' clothing. Young married adults (YMA) were more likely than YSA to give gifts of infants' clothing. Douglas and Isherwood (1979) suggest that rituals of reciprocity are likely to be similar among households in a given life cycle stage. The concept of homophily suggests that YMA's and MMA's are likely to include other households of childbearing age, so baby showers are likely to be commonly shared gift-giving rituals. A popular gift for such events is often clothing. In fact, gifts are the primary source of infants' clothing for many households (Britton 1969).

Older single (OS) and older married (OM) adults were less likely than YSA to give gifts of either men's or women's clothing. Because it is personalized, a gift of clothing implies a degree of intimacy. The social networks of older adults, reduced by retirement and death, may include fewer close relationships, with correspondingly fewer opportunities to give clothing.

The probability of expenditures for gifts of toys was greater among mature married parents with children five years of age or younger (MMARPI) than among YSA. Birthday parties are shared rituals among households in this stage and toys are likely to be preferred gifts (Caron and Ward 1975). In contrast, mature married parents with children between the ages of 12 and 18 (MMPARIII) were less likely than YSA to report expenditures for toys, reflecting the preference of children of this age for other gifts.

TABLE 1

TABLE 2

DESCRIPTIVE STATISTICS AND RESULTS OF THE PROBIT ANALYSIS OF EXPENDITURES IN MOST POPULAR GIFT CATEGORIES

Young married adults (YMA) were less likely than YSA to purchase extrahousehold gifts of plants and flowers, reflecting, perhaps, differences in living situations. While YMA may give plants and flowers to spouses in the same consumer unit, YSA may give plants and flowers to lovers in other consumer units. According to Belk (1979), consumers may be absolved from giving by situational factors. Since YMA often incur expenses associated with new household formation, households in this stage may be absolved from giving gifts for all but the most obligatory occasions.

Older single adults were less likely than YSA to give extrahousehold gifts of small kitchen appliances. This may reflect the fact that older consumers often show less interest than younger consumers in new technology (Douglas and Isherwood 1979).

Mature married adults were more likely than YSA to purchase extrahousehold gifts of china and dinnerware, a result consistent with those of gift industry surveys identifying "Mature Moderns" as major purchasers of china and dinnerware ("Gift Retailing..." 1987).

Ethnicity affected the probability of expenditures in all of the extrahousehold gift categories. The effect of Afro-American ethnicity was negative in all categories. Hispanic ethnicity was negatively related to expenditures for plants and flowers, and Asian ethnicity was negatively related to expenditures for china and dinnerware as well as small appliances. The pervasiveness of the effect of Afro-American ethnicity is consistent with the results of Garner and Wagner (1991), who found Afro-Americans less likely than consumers of European extraction to report expenditures for extrahousehold giving. Garner and Wagner found no effect, however, for either Hispanic or Asian ethnicity. Our results suggest that ethnic groups may have different perceptions of what constitutes an appropriate gift. In the case of Afro-Americans, previous research by Stack (1974) suggests that gifts of time and services may be exchanged in lieu of newly purchased goods.

The most obvious effects for education were in men's, women's and infants' clothing, as well as in china and dinnerware. Less educated households (elementary school or less than high school education) were less likely than other households to report expenditures for gifts of either men's or women's clothing. According to Young and Willmott (1973), the social networks of less educated consumers are often confined to family and close friends. This implies than less educated consumers have little need for conspicuous consumption in their wardrobes and may not view clothing as a desirable gift. Well-educated households (college or postgraduate education) were less likely than others to report gifts of infants' clothing, reflecting, perhaps, the low fertility rate (Fuchs 1983) among the well-educated. On the other hand, well-educated consumers reported more gifts of china and dinnerware. According to Douglas and Isherwood (1979), china is a "pure marker"-a good conveying information about the status of a household. As such, china and dinnerware may be gifts understood and appreciated primarily by the well-educated.

Both urban and rural households were less likely than suburban households to have expenditures for gifts of infants' clothing. In urban areas, social networks are often diffuse. In rural areas, social networks may lack scope. In either case, opportunities for shared rituals surrounding the birth of a child may be limited. Rural households were less likely than suburban households to have expenditures for gift of small appliances. This result lends support to the work of Ryans (1977), who reported that rural residents were less likely than urban residents to purchase gifts of appliances, and may reflect limited access to shopping. Region is a variable usually included in expenditure analyses to capture regional differences in tastes, preferences and prices. Our results show that households in the South and the Northeast were less likely than households in the Midwest to report expenditures for gifts of either men's clothing or small appliances. Households in the South were less likely to report expenditures for plants and flowers.

The chi-square values in Table 2 show the models were significant in explaining the probability of expenditures in all seven of the extrahousehold gift categories. The rho-squared value of the models ranged from 0.075 for plants and flowers and small appliances to 0.098 for women's clothing. According to Domencich and McFadden (1985), these values are comparable to R-squared values ranging from 0.20 to 0.24.

Our results must be interpreted in light of limitations inherent in the CEX data. First, while the data on expenditures and characteristics of donors are extensive, there are no data on recipients. Second, there is no information on gifts-in-kind. This may be particularly important in product categories like infants' clothing, in which gifts of hand-me-downs are common (Britton 1969), and plants and flowers, in which gifts of cuttings are frequently given (Schnudson 1986). Finally, the CEX data are limited to expenditures for extrahousehold gifts. Information on expenditures for gifts given within the household would enhance our understanding of the gift-giving process.

CONCLUSIONS AND IMPLICATIONS

Our results are consistent with economic theory in demonstrating that total annual expenditures, a proxy for income, is positively related to the probability of extrahousehold gift expenditures in seven of the most popular gift categories. When the effect of total consumption expenditures is controlled, family size, stage in the family life cycle and ethnicity are related to the probability of expenditures for gifts in all seven categories. The effects of other socioeconomic and demographic variables, including the number of female adults, education, urbanization and region, appear to vary by gift category.

Our results also have implications for the Sherry (1983) model. We show that socioeconomic and demographic characteristics of donor households, particularly total consumption expenditures, family size, ethnicity, and stage in the family life cycle, are related to the probability of expenditures in the most popular extrahousehold gift categories; we submit that the economic dimensions of the Sherry model would be enhanced by their inclusion. Given the scope of the CEX data, we recommend extending this research to other popular gift categories, such as jewelry and cosmetics. An intriguing possibility is a longitudinal study of the involvement of women in gift-giving to determine if, as sex roles, change, men begin to assume more responsibility for giving. For researchers interested in ethnography, we suggest investigating reasons for the differences we observed in categories of gifts chosen by Hispanic and Asian consumers.

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