How the Changes in the Structure of “the Household” Affect Market Research

By Nicole Mitchell, Knowledge Specialist

What defines a household? According to Merriam-Webster, a household consists of those who dwell under the same roof and compose a family, or a social unit composed of those living together in the same dwelling. “So what?” you may be thinking. Well, according to a recent report from Pew Research Center, multi-generational family households are on the rise. In 1980, only 12.1 percent of households were multi-generational compared to 2009 where they made up 16.7 percent of households. That’s 51.4 million Americans! The last time we saw these kinds of numbers was before the 1960s.

Household Market ResearchSo this got me to thinking, when we ask respondents to report their household income (HHI) what are people in multi-generational households reporting? As a member of a multi-generation household, I only report my personal income. Although my mother, sister, and I all live together, I would never think to add their income to my income and report it as the “household income.” But, according to the definition, household includes everyone under the same roof. What if you live with roommates? I suppose you could ask them their annual income and explain you need it for a survey. I cannot imagine why they would not be willing to provide this information, after all it’s for a survey.

So, why do we ask this question when it may potentially provide inaccurate data? According to some researchers, HHI is an important indicator because it provides us insight on respondents’ socioeconomic environment. But does it really? A respondent’s annual HHI may be 150K, but their personal income may be five percent of the annual HHI. Based on their annual HHI we would assume that it positively correlates with a social economic status (SES) of upper middle class. However, if they lived alone their SES would suggest lower class. On the other hand, one of my colleagues would argue that if you live in a household with an annual HHI of 150K you may reap the benefits of living in an upper middle class household. For example, a recent college graduate living at home with their parents may benefit from the primary grocery shopper buying filet mignon instead of a package of instant noodles which would fit in the graduate’s budget.

Essentially, as researchers, we need to be aware of how households are changing and how these changes effect participants’ attitudes and behaviors. Adjustments such as removing the HHI question, asking participants the number of people in their household, providing a clear definition on HHI, or using an adjusted household income formula that takes household size into account may be ways to address the changing composition of the American household. What are your thoughts?