Currently, household income (HHI) is used almost universally in consumer market research for screening, profiling and data segmentation. Can you recall ever seeing an online survey, bulletin board or community recruit where some indication of household income was not asked for? “Which of the following best describes…”, followed by annual gross-income ranges.
The market research industry has used this view of HHI foundationally for so many years as a proxy for a “richer-poorer” continuum. We assume those with high household incomes have more and spend more and those with lower HHI don’t and can’t.
But using household income measurement in this way today is outdated, at best. And, much more likely, it’s heavily biased and misleading when used to indicate wealth, spending and especially purchasing power.
Through our research on this topic, we first explored hard data trends across several decades showing the reality of:
But we also needed to hear the voice of the consumer. We conducted a survey of 1,500 U.S. households across all demographic types and income ranges to ask about not only their income but also their perceptions of personal wealth, including mandatory and discretionary spending, winners and losers when their finances change and more. Some of their answers were surprising and unexpected.
We suggest a different way to ask about and combine several factors for a more realistic and representative picture of households and income that will benefit researchers and brand marketers of all kinds.
Key Takeaways:
Speakers: