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Household Risk Factors and their Influence on Consumer Behavior
No.195
March 2004
Research Fellow Naoki Nagashima
ABSTRACT
This report begins by establishing the four types of risk factors that are perceived by households - downside risk, variable risk, uncertainty and non-economic risk - and explores the effect of each upon consumer behavior. The data of this report is based on a survey completed in November 2003. The following conclusions are made:
- Broadly speaking, downside risk has the most influence upon consumer behavior.
- Downside risk can be divided into two categories: health and social security related downside risk, and wage and employment related downside risk. The former gets larger as a person gets older, or as one's income gets lower. The latter increases gradually from one's 20s to one's 40s, but rapidly decreases from one's 50s onward. The level of wage and employment related downside risk is particularly high with respect to middle-income households.
- Calculations were also made according to age group. In the young to middle-age age group (20 to 44), the larger the downside risk related to wage and employment, the weaker consumption becomes. This relation is most clearly visible with optional consumption. In regard to the middle-age to elderly age group (45 to 69), neither category of downside risk has a significant influence upon consumer behavior. The presence of uncertainty, however, has a strong inhibiting influence upon optional consumption.
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- Japanese
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