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A reappraisal of Katona's adaptive theory of consumer behaviour using U.K. data

Gausden, Robert, Hasan, Mohammad S. (2022) A reappraisal of Katona's adaptive theory of consumer behaviour using U.K. data. The Manchester School, . ISSN 1463-6786. E-ISSN 1467-9957. (doi:10.1111/manc.12395) (KAR id:91726)

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The objective of this paper is to conduct a reappraisal of Katona’s (1968) adaptive theory of consumer behaviour, which maintains that discretionary consumption is partly determined by attitudes and expectations of households. Initially, using UK data, we follow Katona by empirically examining whether changes in personal expenditure on durable goods are connected to earlier movements in consumer confidence. Evidence of a lack of a stable relationship between these two variables encourages us to perform a disaggregated analysis involving 111 components of four different forms of consumption, which enables construction of an aggregate measure of discretionary spending (DISC). We find that sufficient criteria are satisfied for the GfK sentiment index to be accepted as a reliable predictor of the growth of DISC. In conclusion, then, it would seem that the validity of Katona’s theory can be revived if we are prepared to discard the assumption that durable goods’ consumption is synonymous with discretionary expenditure.

Item Type: Article
DOI/Identification number: 10.1111/manc.12395
Uncontrolled keywords: Katona’s adaptive theory; consumer confidence; household consumption; durable goods; discretionary expenditure
Subjects: H Social Sciences
Divisions: Divisions > Kent Business School - Division > Department of Accounting and Finance
Depositing User: Mohammad Hasan
Date Deposited: 25 Nov 2021 12:22 UTC
Last Modified: 17 Jan 2022 08:47 UTC
Resource URI: (The current URI for this page, for reference purposes)
Hasan, Mohammad S.:
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