White Goods

Are you financing "white goods;" that is, major home appliances, such as stoves and ovens? If so, the decline in your portfolio is explained by major shifts in consumers' life styles. Essentially, it is not "in" to do much cooking these days—too busy trading stocks on-line. Data from a recent American Demographics document the changes over a decade. The younger the household, the less likely is it to be buying major home appliances. Only the old folks are still cooking. Average annual purchases of major appliances by those less than 25 years of age fell by more than 41 percent in the decade 1987 to 1997, contributing to an overall decline in purchases by all age groups of 25.2 percent.

Not surprisingly, during this same period families became less likely to prepare meals at home. From 1993 to 1997, the portion of households who prepared two or more meals at home per day dropped from 35.9 percent to 32.2 percent. In contrast, the portion that prepared meals at home "only a few times a week" rose from 15.9 percent to 20.1 percent. Among families with incomes of $50,000 or more, the corresponding figures were 16.3 percent to 22.6 percent.

It should also be noted that families can eat out more frequently (using their credit cards, of course) if they do not have children living at home. The most common living arrangement in the U.S. today is unmarried people with no children. Such arrangements accounted for 32 percent of households in 1998, up from 16 percent in 1972. Overall, 62 percent of American households now have no children living at home, up from 45 percent in 1972.