Impact of Credit Card Usage on Consumers Expenditure Pattern
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Impact of Credit Card usage on Consumers Expenditure Pattern __________________
A thesis Presented to the faculty of Management Sciences Bahria Institute of Management & Computer Sciences, Karachi ____________________
In Partial Fulfillment of the Requirements for the Degree Master in Business Administration
____________________
by
ALI AZIZ AHMED DECEMBER, 2010
BAHRIA UNIVERSITY INSTITUTE OF MANAGEMENT AND COMPUTER SCIENCES, KARACHI
RECOMMENDATION FOR ORAL EXAMINATION This Project/thesis hereto attached, entitled,“__________________________”, prepared and submitted by ______________, in partial fulfillment of the requirements for the degree MASTER IN BUSINESS ADMINSTRATION, is hereby recommended for appropriate action.
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BAHRIA UNIVERSITY INSTITUTE OF MANAGEMENT AND COMPUTER SCIENCES, KARACHI
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BAHRIA UNIVERSITY INSTITUTE OF MANAGEMENT AND COMPUTER SCIENCES, KARACHI
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ABSTRACT
The research was conducted to check out the affect of credit card usage on consumer’s expenditure patterns. The gathered data were examined in respective with inflation, interest rate and demographic factors. The approach adopted included quantitative information. Questionnaires were used for gathering data of credit card users in Karachi, while, Chi-square, frequency distribution and One-Sample t test were used to test the hypothesis. The cumulative result conclude that most of the credit card users use their card to facilitate themselves to make purchases in retail stores, education, utility bills, dine out and in jewellery, air traveling and clothing. On the contrary credit card usage is not affected by inflation, interest rate and education level while age, gender and income level do affect it. Likewise none of the expenditure is affected by either interest rate or inflation as commodities are considered necessitates by consumers.
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ACKNOWLEDGEMENT
First, we would like to praise Al-Mighty Allah for giving me the courage and the strength to complete the task of writing this thesis. This thesis would not have been possible without the impeccable support and guidance that I have received from my advisor, Mr. Mumtaz Khan. I would also like to thank all of those provided me the data and my family during the exercise of collecting data, brain storming, analyzing and compiling the data which is presented in the form of this thesis.
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DEDICATION
I would like to dedicate all my work to my late father Mr. Aziz Ahmed, to my mother Allah bless her with health and keep her shadow on us (Ameen!) and to my younger brother Master Daniyal Ahmed.
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TABLE OF CONTENT
RECOMMENDATION FOR ORAL EXAMINATION .............................................................................. ii APPROVAL SHEET ............................................................................................................................ iv ABSTRACT....................................................................................................................................... vii ACKNOWLEDGEMENT ................................................................................................................... viii DEDICATION .................................................................................................................................... ix TABLE OF CONTENT ......................................................................................................................... x CHAPTER # 1 INTRODUCTION ................................................................................................................................ 1 1.1
BACKGROUND .................................................................................................................. 1
1.2
STATEMENT OF PROBLEM ............................................................................................... 2
1.3
SIGNIFICANCE OF THE STUDY .......................................................................................... 3
1.4
SCOPE OF THE STUDY....................................................................................................... 3
1.5
LIMITATION OF THE STUDY.............................................................................................. 3
1.6
BASIC ASSUMPTIONS ....................................................................................................... 4
1.7
DEFINITION ...................................................................................................................... 4
CHAPTER # 2 RESEARCH METHADOLOGY AND PROCEDURE ................................................................................ 5 2.1 RESEARCH DESIGN ................................................................................................................. 5 2.2 RESEARCH PURPOSE .............................................................................................................. 5 2.3 RESEARCH APPROACH ........................................................................................................... 5 2.4 POPULATION - SAMPLE .......................................................................................................... 5 2.5 RESEARCH QUESTION ............................................................................................................ 6 2.6 SOURCE OF DATA ................................................................................................................... 6 2.6.1 PRIMARY DATA................................................................................................................ 6 2.6.2 SECONDARY DATA........................................................................................................... 6 2.7 HYPOTHESIS ........................................................................................................................... 6 2.8 DATA ANALYSIS ...................................................................................................................... 7 2.9 ETHICAL CONSIDERATIONS .................................................................................................... 7
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CHAPTER # 3 REVIEW OF RELATED LITERATURE & STUDIES ................................................................................. 8 3.1 MEDIA OF PAYMENT .............................................................................................................. 8 3.2 CREDIT CARD USAGE .............................................................................................................. 9 3.3 ELECTRONIC PAYMENTS ...................................................................................................... 11 3.4 CREDIT CARD AND INTEREST RATE ...................................................................................... 12 3.5 CREDIT CARD AND INFLATION ............................................................................................. 12 3.6 CREDIT CARD STATISTICS ..................................................................................................... 13 3.7 DEMOGRAPHIC FACTORS..................................................................................................... 15 3.8 EXPENDITURE PATTERNS ..................................................................................................... 16 CHAPTER # 4 PRESENTATION ANALYSIS .............................................................................................................. 18 4.1 FREQUENCY OF THE DATA ................................................................................................... 18 4.1.1 AGE ................................................................................................................................ 18 4.1.2 GENDER ......................................................................................................................... 18 4.1.3 EDUCATION LEVEL......................................................................................................... 19 4.1.4 INCOME LEVEL .............................................................................................................. 19 4.1.5 MONTHLY USAGE OF CREDIT CARD .............................................................................. 20 4.1.6 HIGHEST EXPENDITURE CATEGORY .............................................................................. 20 4.1.7 IMPACT OF HIGH INFLATION ........................................................................................ 21 4.1.8 IMPACTOF HIGH INTEREST RATE .................................................................................. 21 4.1.9 EXPENDITURE AFFECTED BY HIGH INFLATION .............................................................. 22 4.1.10 EXPENDITURE AFFECTED BY HIGH INTEREST RATE..................................................... 23 4.2 HYPOTHESIS TESTING........................................................................................................... 23 4.2.1 AGE AND CREDIT CARD ................................................................................................. 24 4.2.2 GENDER AND CREDIT CARD .......................................................................................... 25 4.2.3 INCOME LEVEL AND CREDIT CARD................................................................................ 26 4.2.4 EDUCATION AND CREDIT CARD .................................................................................... 27 4.2.5 HIGH INFLATION AND CREDIT CARD ............................................................................. 28 4.2.6 HIGH INTEREST RATE AND CREDIT CARD ...................................................................... 28
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CHAPTER # 5 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS ............................................ 30 5.1 FINDINGS.............................................................................................................................. 30 5.2 CONCLUSION ........................................................................................................................ 30 5.3 RECOMMENDATION ............................................................................................................ 31 REFERENCES ................................................................................................................................... 32 APPENDIX A .................................................................................................................................... 34 QUESTIONNAIRE ........................................................................................................................ 34 APPENDIX B .................................................................................................................................... 35 DATA ANALYSIS .......................................................................................................................... 35
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CHAPTER # 1 INTRODUCTION 1.1 BACKGROUND
Despite of the convenience concept for which today, modern credit cards are used for, this was denied or in better words denied by the credit card issuers who were mainly oil companies followed by departmental stores in early 1900 but issued their own specific cards with credit limits and limited acceptance. In 1946, Johan Biggins a banker in Brooklyn, issued the first bank card named as “chargit” and that has resulted in the flourishing of credit card industry worldwide, taking it up to its extremes with a business of over one trillion US Dollars. When consumer uses credit card as an alternate of cash, the bank pays to the merchant on behalf of its card holder after the merchant provides the bank with customer invoice. In 1951, the first credit card was issued by Diners Club after Frank McNamara, a representative of Diners Club, realized that he forgot his wallet at home while having a business dinner in one of the major New York’s restaurant and so he decided to have an alternate to cash. As per Diners Club record, they issued their first credit card to 200 customer’s accepted in 27 restaurants in New York, followed by American Express, who too issued their first credit card in the same year. In 1958, diner’s issued purple card for traveling and entertainment. In 1959, the option of maintaining balance was introduced which meant the card holder could carry forward leftover payment after paying part sum of that cycle to the next cycle with inclusion of some financial charges. In Pakistan, the credit of the introduction of the credit card goes to Habib Bank which issued its first gold card decades ago but in limited sum resulting in limited usage and knowing. Habib Bank’s footsteps were then, followed by Allied Bank which first issued Master card while Citi Bank introduced its Visa card. Citi Bank could be renowned as the uncrowned king of credit card industry in Pakistan because firstly for doing an uncomment able / marvelous job in educating the people of Pakistan regarding the importance and application of credit cards and for the use of massive technology and for 1
creating throat-cut competition in the marketing of credit cards. From that day onwards, every Bank has credit card facility included as a part of basic services to its customers like MCB, National Bank of Pakistan, Bank Alfalah and Standard Charted Bank. In Pakistan Bank Alfalah claims to be the highest market credit holders during the current period with no annual fee, good customer services, acceptance around the globe and facilitations with reward points. Expenditures are the spending of a proportion of one’s individual income expenditures pattern is the way of spending that proportion and is determined by the weights ( Scale of preference i.e. high percentage for necessities rather than luxuries) followed by spending on each particular goods. An expenditure pattern not only varies with Income Levels but also with Demographic Factors. As income groups have different expenditure patterns as compared to social class and so does gender and each group but expenditure through credit cards are also affected by Inflation and Interest rate. Since the invention of credit cards throughout the world expenditure of individuals have increased as they are facilitated to pay for purchases in the future and this has resulted into individual spending more than his earnings and so does goes for Pakistan. This can be supported by stating a single quarter of 2006 from July to September resulting in billing by Visa Card of Rs. 15 billion. During this period the Visa Card experienced 80 percent growth, but as economy takes a turn currently Visa Card is experiencing 3.9 decrease in volume and 4 percent decrease in value in the current quarter of the fiscal year. As per Visa Card statistics Pakistan card holders mostly use their Credit Cards at retail outlets i.e. 39 percent of the Visa Purchases while transport facility comprises of 27 percent followed by 26 percent in Misc items and only 8 percent a small proportion on restaurant of the total Visa purchases. This research is being conducted to check and record the expenditure patterns and its limiting factors; example gender, age, income level, inflation and interest rate. 1.2 STATEMENT OF PROBLEM The research will highlight “Influence or Impact of Credit Card usage on Consumers Expenditure Patterns”.
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We have seen a lot of purchases are done through credit cards and this applies to the world as plastic money’s application is increasing day by day with the decrease in the spending through cash. As it experiences increase in it usage, credit card a form of plastic money, is also experiencing an increase in its acceptance. This is happening as people can buy more irrespective of their incomes, savings, price of the commodity or even the cash they are having at the time of buying, this increasing purchases and expenditures overall. 1.3 SIGNIFICANCE OF THE STUDY
To determine the effect of the demographics variables like age, gender, income level and literacy rate on the credit card usage and consumer expenditure pattern. To determine the influence of inflation and interest rate on expenditure made through credit cards. The study would identify the constraining which hinder the usage of credit card which could help in making long term social and economical planning – a part of contingency planning. 1.4 SCOPE OF THE STUDY
The study would revolve around all the credit card users in Pakistan, sampled as a small proportion of credit card holders of Karachi giving a generalized perceptions effects and statistics regarding people from different cultures and life styles in Pakistan. No other type of plastic money will be studied accept credit cards as our topic states effects of inflation, interest rate and demographic factor on “credit card”. 1.5 LIMITATION OF THE STUDY
This study deals only with credit cards and no other type of plastic money will be studied. The study would only analyze the effect of inflation, demographic factors, interest rate and no other factors that acts as constrains.
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1.6 BASIC ASSUMPTIONS
The basic assumptions taken for this research are credit card expenditures are constant along with any other constraining factor except inflation, interest rate and demographic factors which are kept as the only variable factors in this study. 1.7 DEFINITION Credit Card – A card issued by banks or shops with certain limit, allows the holder to buy on credit. Expenditure – The act of using or spending money, time, etc. Expenditure Pattern – Is the way of spending a proportion of one’s individual income proportion and is determined by the weights (scale of preference i.e. high percentage for necessities rather than luxuries) followed by spending on each particular goods. Demographic – Socio economic characteristics or variables of a population, such as age, gender, education level, income level, occupation, religion, family, size, etc. Variables – A characteristic or property that varies from individual to individual and may change with the passage of time. Social Class – Hierarchy in which individuals and groups are classified on the basis of accumulation of wealth. Commonly social class is classified into four groups (1) upper class, (2) middle class and (3) lower class. Interest Rate – The cost of borrowing money or the extra amount paid for borrowing of money. Inflation – The persistent increase in the general price level of commodities.
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CHAPTER # 2 RESEARCH METHADOLOGY AND PROCEDURE 2.1 RESEARCH DESIGN
It involves the setting up of research methodology along with research design. The research includes the following items are described below. 2.2 RESEARCH PURPOSE
The research is being classified into three different categories; exploratory, descriptive and explanatory. 2.2.1 The Study is descriptive and it will be substance by gathering and analyzing data through primary sources, in other words collected data and its analysis will help us determine how factors will influence consumer expenditure patterns with respect to usage of credit card. 2.3 RESEARCH APPROACH
As per conventions of social sciences data for any kind of research is either collected through qualitative or quantitative method. 2.3.1 The study is quantitative in nature and the primary data collected will help in analyzing how inflation, interest rate and demographic factors influence consumers spending patterns by means of credit card. 2.4 POPULATION - SAMPLE
As Karachi is a habited for people from different parts and cultures of Pakistan, commonly referred as mini Pakistan so our sample would be comprising of 100 credit card users of Karachi representing all the credit card users in Pakistan i.e. our population.
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2.5 RESEARCH QUESTION
How demographic factors influence credit card usage and expenditures?
How inflation affects credit card usage and expenditures?
How interest rate affects credit card usage and expenditures?
2.6 SOURCE OF DATA 2.6.1 PRIMARY DATA
All the primary data about credit card usage and expenditure pattern will be collected through questionnaire filled by our sample. 2.6.2 SECONDARY DATA
All the secondary information will be collected from mass media example internet, digital libraries, newspaper and magazines but analysis will be purely conducted on primary data of the study. 2.7 HYPOTHESIS
Hypothesis for this study are as below; H1; Credit card usage is affected by Age. H2; Credit card usage is affected by Gender. H3; Credit card usage is affected by Literacy level. H4; Credit card usage is affected by Income level. H5; Credit card usage is affected by High Inflation. H6; Credit card usage is affected by High Interest Rate.
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2.8 DATA ANALYSIS
The analysis will be done on the basis of the data collected in the form of questionnaire from the sample and would be shown in descriptive form. 2.9 ETHICAL CONSIDERATIONS
Our samples would be assured that privacy would be our first priority and the information collected regarding and through them would be used solely for the purpose of research thus, after this study it would be buried forever in DAVYJONES locker.
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CHAPTER # 3 REVIEW OF RELATED LITERATURE & STUDIES A literature review gives the researcher an understanding of how the findings of the study fit into existing body of knowledge. The chapter begins with a brief discussion about the importance of previous research. 3.1 MEDIA OF PAYMENT
According to J. White, the most common mode of payment used by customers is cash, cheques and credit cards. Depending upon on different situations people prefer different means of payment. Innovations and Inventions in the field of payment mechanism cannot be enforced on consumers, they gradually accept it over a period of time; such as coins replaced barter system because of the failure of occurrence of coincidence of wants; later coins were replaced by currency as coins were difficult to carry and store. Further coins were replaced by cheques as with the passage of time it became difficult or inevitable to carry large amount of cash. Credit card innovation facilitates consumers more than any mode of payment as it allows them to purchase goods on credit. The latest innovation didn't completely replace the old payment methods, some of them are still in use today. According to Hirschman, payment system does influence the purchasing behavior of consumers. As per 1978 empirical studies, consumers are able enough to differentiate among different credit card payment systems. The primary system of any credit card is to facilitate its user while making purchases through credit card consumers not only decides the mode of payment but also from its various types. The selection is impacted by five factors: firstly the demographic factors i.e. income, age, gender and etc. Secondly the attributes’ of credit card such as billing pattern and markup. Thirdly the type of transaction that means the type of item purchased in terms of its monetary and volumetric value. Another factor includes the place where the transaction is taken place and is regarded to the credit card acceptance and all in all, the situation in which the transaction will take place such as degree of necessity and urgency of good. The above five factors may be at times complementary and competitor. Consumers had to decide to pay for their purchases from different means. Individual goes through decision making process which 8
includes, firstly, whether to use cash, cheque or credit card. Then, cash is eliminated because although it is widely accepted but is difficult to carry, therefore credit card is preferred over cheque depending upon its acceptance and convenience. Thus purchases made through credit cards urge consumers to purchase more as payment is not to be on spot. A part from this credit card purchases are to influence by the demographic factors and the costs associated with a specific credit card, these are further followed by credit card acceptance and urgency to make purchase could compel consumers to buy on credit. 3.2 CREDIT CARD USAGE
According to Sienkiewicz, in a very short span of time credit cards were preferred for purchases by many consumers since 1950. In 1916 only 16% of USA households used credit cards but the end of 1995 almost 65% of the households became the part of credit card usage community. Credit cards are now widely accepted over 4 million places only in USA and over 14 million locations throughout the world. According to 1999 statistics 1 trillion of goods and services where bought through credit cards. Since the advent of Dinners club's purple card and American Expresses' green card, in the same decade many large banks developed universal card product for consumers allowing them choice to purchase goods and services from many locations. A credit card holder experiences a whole lot of process in its single usage which starts with sweeping a credit card through electronic terminal at the transaction place followed by the amount of transaction and card holder’s specifics that are available to the acquirer. If the acquirer is the issuing body then details can be verified within the system else or otherwise information is passed on to the issuer. The issuer than authorizes or declines the transaction and a message containing either of the two is passed to the merchant via the acquirer. If authorization is given, the merchant substantiates the card holder by comparing his sign on the voucher with his original one on the card this ends the transaction which is now accepted by the merchant. According to Arano, credit card usage is a readily available source of funding to finance consumption is steadily on rise. Factors such as acceptance and convenience and facility of borrowing debt allowing higher level of consumption, are believed to have constituted 9
to the flourishing of credit card industry in terms of increase availability and aggressive marketing. The summary of the factors that are believed to have contributed to the steady rise in credit cards industry are increased availability and acceptance of credit cards followed by aggressive (informative and persuasive) both by the industry to attract potential customers. According to J. Mann, in USA wide use of credit cards is one of the salient features of consumer retail purchases. American’s are recorded to have purchased 25% of their retails using credit cards. This is against of consumer behaviors in some highly industrialized nations. Bank statistics such as that annually an individual has 60 card based transaction in USA, while in Japan it is only four. In Japan borrowing appears in only about one tenth in the credit card transactions while half of the Americans pay of their credit card debt each month, ready to borrow next month. Its usage depends upon different policies that are being practiced in different countries. In countries where credit cards are frequently used, their idea is to increase accessibility to expensive purchases cheaply i.e. more credit purchases with payments in installments while in countries where its use is discourage they state that there are higher chances of Bankruptcy, also it discourages savings as people can have more than they could pay for it. In 1998 credit card there were over 14 billion credit card transactions equally valued to 1.1 trillion dollars, resulting in a mean of 76 dollar per transaction. The 1998 statistics also indicated that credit card was 18% of all USA transaction for the year. Almost about half of USA citizens take the benefit of differ payment of some or all of their credit card bills, on the contrary the Japanese statistics indicated that only 20.76 trillion yen or equivalent to 190 billion USA dollars was the value of credit card transaction, thus giving an overall average of being three times smaller in monetary value as compared to USA. According to Plummer, credit cards are more often used by consumers depending upon their purchasing behavior. The two major duo Visa and Master card are issued all around the world by over 6000 banks with each claiming to have about 20 million card holders. A useful relationship persists between social and income class and credit card usage i.e. 10
the social class uses credit card to avail the availability of installments while, on the other hand upper class uses credit card as a means of convenience. Although all consumers have positive attitude towards credit card usage however the former (social class) tends to use credit card for installment purpose in order to fulfill their necessities of life while, the latter uses it to buy luxury items. According to Mathews and Slocum Jr., consumers become more sophisticated purchaser, purchases on credit has played a major role in flourishing the credit card industry and this has resulted in entrance of many retail stores and financial institutions in this new segment. Credit card usage has risen with the passage of time because consumers prefer to buy more and more of the commodities to have maximum utility from them and credit card issuing bodies have also played a significant role in helping consumers to aware them and making them move towards achieving this utility. Previously a handful number of people in every nation knew about credit cards and its usage but by the time people realized its importance and convenience they moved their attention towards facilitating their expenditure by using credit cards, this can be substantiated by USA 1999 statistics which show that over one trillion dollars transaction were recorded in that current financial year. Credit card is more of a source of borrowing – an incentives associated with its usage rather than a mode of payment. 3.3 ELECTRONIC PAYMENTS
According to report published by state Bank of Pakistan, in the current Fiscal year (FY10) of Pakistan a rising drift is continuously seen in both value and volume of Electronic payments. As per State Bank of Pakistan the E-Payment transaction in Pakistan for FY10 have touched Rs 50.3 million with increase in volume of 8.4 percent and increase of 8.2 percent in value. Consistent growth is observed on electronic transactions in this quarter with 37.75 percent in volume of retail transaction as compared to previous quarter which was 35.3 percent. In this quarter as per State Bank of Pakistan credit card have observed decreasing trend both in volume and value respectively 3.6 million and Rs 16.35 billion making it 3.9 percent decrease in volume and 4 percent in 11
value as compared to previous quarter. The report published by State Bank of Pakistan mentioned that the number of cards in circulation in the current quarter of the Fiscal year has reached 10.45 million showing vastly an increase of 4.9 percent from the previous quarter which had an increase of 6.8 percent. 3.4 CREDIT CARD AND INTEREST RATE
According to Brito and Hartley, borrowing using credit cards at high interest rates might be irrational, however credit cards would act more attractive compared to bank loans for low cost transactions. Credit cards also provides liquidity services to its users by making them staying away from the opportunity cost of holding money that comprises of devaluation of money, security concerns and space to store it etc. The effects of alternating interest rates on credit card purchases can give details why markup on credit cards only partially replicates changes in the cost of production. Credit card interest rates that is inflexible to the changes in the cost of funds acts contradictory to a competitive equilibrium resulting in no profits for significant application. Many notable authorizes have argued that despite being a free market of bank credit cards it yet appears to be non competitive although thousands of independent firms mainly comprising of new entrants having million of consumers. 3.5 CREDIT CARD AND INFLATION
According to Geanakoplos and Dubey extensive use of credit cards although increases trading effectiveness but it results in demand pull inflation i.e. increase in price levels. Government monetary interference to lower this inflation might act as an obstacle in decreasing efficiency gains in credit card usage. Further things get worsen if credit card debts are not paid out. In contemporary economies most of the transactions take place via credit cards. Although the credit card effects have not been comprehensively studied by theorist either price level or monetary theorist but still it is believed that credit card effects are non vital and could be easily controlled by monetary interventions, after all credit card is just plastic money and nothing more than that. Deciding whether to buy commodity using credit card causes increase in general price levels of commodities or 12
inflation i.e. the value of money is lowered/ decreased even though increasing feasibility to purchase. 3.6 CREDIT CARD STATISTICS
Credit card facility is almost availed by every country of the world either in small quantity or in larger quantity. Below mention table shows some statistics of fewer countries in the world. COUNTRY
CREDIT CARD IN CIRCULATION
AUSTRALIA BRAZIL CANADA CHINA FRANCE GERMANY INDIA INDONESIA ISRAEL JAPAN MEXICO PAKISTAN PHILIPPINES RUSSIA SAUDIA ARABIA SOUTH KOREA SPAIN THAILAND TURKEY UNITED KINGDOM UNITED STATES VENEZULA VIETNAM
16,000,000 191,000,000 72,000,000 199,000,000 34,000,000 4,000,000 24,000,000 10,000,000 6,000,000 346,000,000 26,000,000 1,700,000 8,000,000 10,000,000 3,000,000 96,000,000 18,000,000 14,000,000 45,000,000 80,000,000 686,000,000 6,000,000 2,000,000
From the statistics it’s clear seen that USA is the country with largest number of credit card user i.e. 686 million credit cards are present within the people living in USA. The
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second largest country with credit card user is Japan with 346 million users in Japan using credit card for payment of their expenditures.
CREDIT CARD IN CIRCULATION INDONESIA, ISRAEL, 10,000,000 GERMANY, INDIA, 24,000,000 6,000,000 4,000,000 FRANCE, 34,000,000
PHILIPPINES, 8,000,000 JAPAN, 346,000,000
CHINA, 199,000,000
CANADA, 72,000,000
PAKISTAN, 1,700,000
MEXICO, 26,000,000
RUSSIA, 10,000,000 SAUDIA ARABIA, 3,000,000 SOUTH KOREA, 96,000,000 SPAIN, 18,000,000 THAILAND, 14,000,000 UNITED KINGDOM, 80,000,000
BRAZIL, 191,000,000
TURKEY, 45,000,000
AUSTRALIA, 16,000,000 VIETNAM, 2,000,000
UNITED STATES, 686,000,000
VENEZULA, 6,000,000
China is the third largest country with credit card user with 199 million credit card owners across China followed by Brazil with 191 million users in throughout the country. South Korea is the fifth country in the statistics table with 96 million users followed by United Kingdom in the sixth place in the statistics table with 80 million credit card users. Canada is next in the statistics list with 72 million credit card users followed by turkey with 45 million users. According to the statistics France is ninth country with 34 million 14
credit card holders with Mexico on tenth place with 26 million users. India is next with 24 million users and holding the eleventh place of the statistics table. Pakistan only has 1.7 million users of credit cards as compared to other Asian countries especially India and China the neighboring countries of Pakistan. 3.7 DEMOGRAPHIC FACTORS
According to Hirschman, there are six demographic variable factors that act as variables in the course of researches on bank credit card and retail card. These variables include total house hold income, social class, education level of respondee and age, residency period and stages in one’s family life. These demographic factors are always used as independent variables because in many researches it has been made obvious that these factors do affect purchases. Before insuring them as variables all of the factors were taken into consideration and three hypotheses were tested against them, first; alternative credit card payment systems are competitive. Second; the more alternative credit payment system available, individual will purchase and lastly relative to cash purchases, credit card purchases are more in term of dollar value. The first hypothesis concluded that bank credit cards are a simple of higher level of income i.e. the more the income the more the possessions of credit card. The second conclusion suggested that high credit cards usage and possessions are associated with the purchase behavior of its users i.e. the more the person is shopaholic the more credit card he would use; the conclusion suggested that younger and unmarried people had more than one credit card in their possession. Finally, third hypothesis indicated that purchases in terms of dollar value or cots of purchases are higher with credit cards, of any sort, are higher than cash purchases. Further evaluation showed that credit card possession is also affected by gender. Men like to have more travel and entertainment credit cards while woman like to have retail credit cards this pattern could be attributed to men being the provider of the family while women are restricted to house hold purchases. According to J. White, consumer’s choice regarding the mode of payment also depends on demographic factors. A researcher chose households from a metropolitan city of Durban; all households had bank accounts which meant either they could facilitate their 15
purchases by paying through cheques or credit cards. The research included age, race, gender and marital status of the household head as demographic factors. Data was gathered through bank using monthly bank statements and only transactions that affected only bank account taken into considerations. The result suggested that men found credit cards more convenient way of payment than females; this may be because men buy a Varity of goods. While, on the other hand, non white credit cards expenditure are lower than those of whites and young people prefer more credit cards frequently as compared to old ones. A general conclusion suggested that different individuals perceive different types of production in terms of monetary value either they pay by cheque or by credit card depending upon ones financial and demographic status. Thus it can be concluded that demographic factors do affect the credit card usage as suggested by different researchers and studies. The factors that are accused of being affecting credit card usage are age, gender and income level. Male found credit cards a more convenient mode of payment to pay off their variety of purchases as compared to female. Income level does also varies credit card usage, while higher income groups use credit cards as a means of convenience and luxury goods, at the same time, social class use credit cards to facilitate their purchases of their durable and necessities into installments. According to Mathews and Slocum Jr., lower income groups pay less than their balance and instead pay interest on their unpaid balance and thus they are classified as installment users. Higher income groups pay their balance within a specific billing cycle and are classified as convenient user as they prefer credit card over cash. 3.8 EXPENDITURE PATTERNS
Feinberg has researched on credit cards affecting expenditure patterns and overall increasing it for an individual’s spending. The study also verified whether credit cards were affected by gender and type of the product was used as a dependent variable. The sample included 60 respondents (males and females) 30 from each category and all were individual tested. The research was related to the attitudes of the individuals with consumer products. The sample was asked to look at a collection of pictures in a book labeled as consumer products. The book contained seven photographs of consumer items, 16
each one labeled as product with a number; the products varied between two dresses a men cardigan, a tent, a lamp, a chess set and an electric type writer. The sample was asked two questions, first they would have to indicate the amount of money they would be willing to spend for the items and secondly, the most distinct aspects of the products were to be pen down by them. The results indicated that with credit cars one would spend more as compared to one without credit card. The results were neither affected by gender nor by the classification of the product. A second experiment was conducted by Feinberg to check the associated spending reactions an individual may have while using credit cards. For example an individual may not only spend more but would also be quick to spend more. The research has shown decision time to be an indicator of scale of preference i.e. reliable and valid too, for example short reaction time represents greater product reference as a result experiment two was conducted to serve as a replica of the basic hypothesis and to further test effects concerned with credit card usage like increases motivation and decrease decision time regarding spending. The sample consisted of twenty four female randomly assigned to each of the two experimental condition i.e. credit card possessed or not possessed. The respondents were let to a desk in an experimental room were a rare projected slide screen was placed on a table. Further on a button labeled as response was attached to the desk in front of them. The sample was asked to evaluate the number of consumer products that would be shown on the screen. With no time limit they were instructed to look at the slide and whenever they wanted they could press the response button as soon as they have decided and then write their response (the willing amount) on an answer sheet provided to them. Three different dependent variable were gathered and analyzed; estimated spending per item, decision time and the motivation to purchase with credit cards. The results indicated that possession of credit card would facilitate a larger spending per item, a faster decision time and motivation to purchase. Thus it showed that presence of credit card does facilitate consumers spending with decision time being shortened and with no affect of acceptability of credit card in various purchase situations.
17
CHAPTER # 4 PRESENTATION ANALYSIS This chapter deals with the analysis and interpretation of the collected data. The data collected for this study played a significant role in analyzing the impact of credit card usage on consumer’s expenditure pattern. To analyze data a tool plays the most important role, in this study SPSS (Statistical Package for the Social Sciences) version 17 is used as an Analytical Tool to process all the required outputs for acceptance or rejection of the hypothesis developed for the study. Collected data were analyzed through different tests of SPSS. Below are the different test performed with their interpretations of the collected data. 4.1 FREQUENCY OF THE DATA 4.1.1 AGE
Cumulative
Valid
Frequency
Percent
Valid Percent
Percent
Below 20
7
7.0
7.0
7.0
20 - 29
52
52.0
52.0
59.0
30 - 39
24
24.0
24.0
83.0
40 Plus
17
17.0
17.0
100.0
Total
100
100.0
100.0
The above table shows that out of 100 samples collected from credit card users 7 percent of respondent belongs to the group below 20 years, 52 percent respondent belongs to the age between 20 to 29 years, 24 percent belongs to the age group between 30 to 39 years and the remaining 17 percent lies in the group of above 40 years. 4.1.2 GENDER The below table shows that out of 100 respondents 65 percent of the respondents are male and the remaining 35 percent are female.
18
Cumulative
Valid
Frequency
Percent
Valid Percent
Percent
Male
65
65.0
65.0
65.0
Female
35
35.0
35.0
100.0
Total
100
100.0
100.0
4.1.3 EDUCATION LEVEL
Cumulative
Valid
Frequency
Percent
Valid Percent
Percent
Bachelors
42
42.0
42.0
42.0
Masters
36
36.0
36.0
78.0
Others
22
22.0
22.0
100.0
Total
100
100.0
100.0
The above table shows that 42 percent respondents posses Bachelors degree where as 36 percent posses Masters Degree and remaining 22 percent respondent are below Bachelors. 4.1.4 INCOME LEVEL
Cumulative
Valid
Frequency
Percent
Valid Percent
Percent
20 - 30
20
20.0
20.0
20.0
31 - 40
24
24.0
24.0
44.0
41 - 50
27
27.0
27.0
71.0
50 Plus
29
29.0
29.0
100.0
Total
100
100.0
100.0
Above mention table shows different income level respondent, 20 percent earn between 20,000 to 30,000 Rupees monthly, 24 percent earn between 31,000 to 40,000 Rupees, 27 19
percent earn between 41,000 to 50,000 Rupees monthly and remaining 29 percent have monthly earning above Rupees 50,000. 4.1.5 MONTHLY USAGE OF CREDIT CARD
Cumulative
Valid
Frequency
Percent
Valid Percent
Percent
Less than 5
48
48.0
48.0
48.0
5 - 10
27
27.0
27.0
75.0
10 - 15
16
16.0
16.0
91.0
More than 15
9
9.0
9.0
100.0
Total
100
100.0
100.0
The above table shows that 48 percent of the respondent use the credit card less than 5 times monthly, 27 percent use the credit card between 5 to 10 times monthly, 16 percent use the credit card 10 to 15 times monthly and remaining 9 percent use the credit card more than 15 times monthly. 4.1.6 HIGHEST EXPENDITURE CATEGORY
Cumulative
Valid
Frequency
Percent
Valid Percent
Percent
Retail Store
23
23.0
23.0
23.0
Jewellery
9
9.0
9.0
32.0
Dine out
10
10.0
10.0
42.0
Air Travelling
9
9.0
9.0
51.0
Fuel
6
6.0
6.0
57.0
Electronics Goods
2
2.0
2.0
59.0
Clothing
9
9.0
9.0
68.0
Education
17
17.0
17.0
85.0
Utility Bills
11
11.0
11.0
96.0
Other
4
4.0
4.0
100.0
Total
100
100.0
100.0
20
The above table shows the different category on which respondents use credit card, 23 percent use credit card on retail store, 9 percent use credit card on jewellery, 10 percent use on Dine out, 9 percent use on Air travelling, 6 percent use on fuelling, 2 percent on electronic goods, 9 percent use on clothing, 17 percent use on education purpose, 11 percent on utility bills and remaining 4 percent on other categories. 4.1.7 IMPACT OF HIGH INFLATION
The below table shows the respondent responses for high inflation impact on expenditures, 33 percent respondents believe that high inflation affects the expenditure were as 42 percent respondents believe that high inflation have less affect on expenditure and the remaining 25 percent believes that high inflation have no affect on expenditures.
Cumulative
Valid
Frequency
Percent
Valid Percent
Percent
More
33
33.0
33.0
33.0
Less
42
42.0
42.0
75.0
Same
25
25.0
25.0
100.0
Total
100
100.0
100.0
4.1.8 IMPACTOF HIGH INTEREST RATE
Cumulative
Valid
Frequency
Percent
Valid Percent
Percent
More
28
28.0
28.0
28.0
Less
46
46.0
46.0
74.0
Same
26
26.0
26.0
100.0
Total
100
100.0
100.0
21
The above table shows the respondent responses for high interest rate impact on expenditures, 28 percent respondents believe that high interest rate affects the expenditure were as 46 percent respondents believe that high interest rate have less affect on expenditure and the remaining 25 percent believes that high interest rate have no affect on expenditures. 4.1.9 EXPENDITURE AFFECTED BY HIGH INFLATION
Cumulative
Valid
Frequency
Percent
Valid Percent
Percent
Retail Store
23
23.0
23.0
23.0
Jewellery
16
16.0
16.0
39.0
Dine Out
10
10.0
10.0
49.0
Air Travelling
13
13.0
13.0
62.0
Fuel
11
11.0
11.0
73.0
Furniture
3
3.0
3.0
76.0
Clothing
3
3.0
3.0
79.0
Education
4
4.0
4.0
83.0
Utility Bills
15
15.0
15.0
98.0
Electronics Goods
2
2.0
2.0
100.0
Total
100
100.0
100.0
The above table shows the different categories which are affected by high inflation, 23 percent respondents believe high inflation affect retail store, 16 percent respondents believe high inflation affect jewellery, 10 percent respondents believe high inflation affect Dine out, 13 percent respondents believe high inflation affect Air travelling, 11 percent respondents believe high inflation affect fuelling, 3 percent respondents believe high inflation affect furniture, 3 percent respondents believe high inflation affect clothing, 4 percent respondents believe high inflation affect education, 15 percent respondents believe high inflation affect utility bills and remaining 2 percent respondents believe high inflation affect electronic goods.
22
4.1.10 EXPENDITURE AFFECTED BY HIGH INTEREST RATE
Cumulative
Valid
Frequency
Percent
Valid Percent
Percent
Retail Store
19
19.0
19.0
19.0
Jewellery
13
13.0
13.0
32.0
Dine Out
8
8.0
8.0
40.0
Air Travelling
9
9.0
9.0
49.0
Fuel
8
8.0
8.0
57.0
Furniture
4
4.0
4.0
61.0
Clothing
6
6.0
6.0
67.0
Education
4
4.0
4.0
71.0
Utility Bills
17
17.0
17.0
88.0
Electronics Goods
12
12.0
12.0
100.0
Total
100
100.0
100.0
The above table shows the different categories which are affected by high interest rate, 19 percent respondents believe high interest rate affect retail store, 13 percent respondents believe high interest rate affect jewellery, 8 percent respondents believe high interest rate affect Dine out, 9 percent respondents believe high interest rate affect Air travelling, 8 percent respondents believe high interest rate affect fuelling, 4 percent respondents believe high interest rate affect furniture, 6 percent respondents believe high interest rate affect clothing, 4 percent respondents believe high interest rate affect education, 17 percent respondents believe high interest rate affect utility bills and remaining 12 percent respondents believe high interest rate affect electronic goods. 4.2 HYPOTHESIS TESTING
Hypothesis for the study were selected in the beginning and on the basis of SPSS tests the hypothesis are either accepted or rejected on the basis of the output of these tests. Two type of test “Chi-Square” and “One-Sample T Test” are used for accepting or rejecting the hypothesis. In Chi-Square test the value of “P” must be greater than 5 percent in order 23
to accept the hypothesis developed for this study and reject the null hypothesis. In onesample T test the value of t must be greater than 0.5 in order to accept the hypothesis developed in study and reject the null hypothesis. 4.2.1 AGE AND CREDIT CARD
H0: Credit card usage is not affected by Age. HA: Credit card usage is affected by Age. To verify the acceptance or rejection of this Hypothesis developed for the study, ChiSquare test is applied on age group and expenditure group to test out the significance. Age_Grp * Exp_Grp Crosstabulation Exp_Grp More Than
Age_Grp
Less Than 30
30 Plus
Total
Less Than 5000
5000 - 11000
11000
Total
Count
35
22
2
59
% within Age_Grp
59.3%
37.3%
3.4%
100.0%
Count
15
22
4
41
% within Age_Grp
36.6%
53.7%
9.8%
100.0%
Count
50
44
6
100
% within Age_Grp
50.0%
44.0%
6.0%
100.0%
Chi-Square Tests Value
df
Asymp. Sig. (1-sided)
a
2
.031
Pearson Chi-Square
5.608
N of Valid Cases
100
The researcher can wrap up on the basis of analysis that at 5 percent significance level, the data provide sufficient evidence to conclude that the usage of credit card is affected by age; therefore the researcher can reject the null hypothesis.
24
4.2.2 GENDER AND CREDIT CARD
H0: Credit card usage is not affected by Gender. HA: Credit card usage is affected by Gender. To verify the acceptance or rejection of this Hypothesis developed for the study, ChiSquare test is applied on gender and expenditure group to test out the significance. Gender * Exp_Grp Crosstabulation Exp_Grp More Than
Gender
Male
Female
Total
Less Than 5000
5000 - 11000
11000
Total
Count
38
23
4
65
% within Gender
58.5%
35.4%
6.2%
100.0%
Count
12
21
2
35
% within Gender
34.3%
60.0%
5.7%
100.0%
Count
50
44
6
100
% within Gender
50.0%
44.0%
6.0%
100.0%
The researcher can wrap up on the basis of analysis that at 5 percent significance level, the data provide sufficient evidence to conclude that the usage of credit card is affected by gender; therefore the researcher can reject the null hypothesis.
Chi-Square Tests Value
df
Asymp. Sig. (1-sided)
a
2
.028
Pearson Chi-Square
5.800
N of Valid Cases
100
25
4.2.3 INCOME LEVEL AND CREDIT CARD
H0: Credit card usage is not affected by Income Level. HA: Credit card usage is affected by Income Level. To verify the acceptance or rejection of this Hypothesis developed for the study, ChiSquare test is applied on income level and expenditure group to test out the significance. Income * Exp_Grp Crosstabulation Exp_Grp More Than
Income
20 - 30
31 - 40
41 - 50
50 Plus
Total
Less Than 5000
5000 - 11000
11000
Total
Count
17
3
0
20
% within Income
85.0%
15.0%
.0%
100.0%
Count
12
12
0
24
% within Income
50.0%
50.0%
.0%
100.0%
Count
11
14
2
27
% within Income
40.7%
51.9%
7.4%
100.0%
Count
10
15
4
29
% within Income
34.5%
51.7%
13.8%
100.0%
Count
50
44
6
100
% within Income
50.0%
44.0%
6.0%
100.0%
Chi-Square Tests Value Pearson Chi-Square
17.215
N of Valid Cases
100
a
df
Asymp. Sig. (1-sided)
6
.004
The researcher can wrap up on the basis of analysis that at 5 percent significance level, the data provide sufficient evidence to conclude that the usage of credit card is affected by income level; therefore the researcher can reject the null hypothesis. 26
4.2.4 EDUCATION AND CREDIT CARD
H0: Credit card usage is not affected by Education. HA: Credit card usage is affected by Education. To verify the acceptance or rejection of this Hypothesis developed for the study, ChiSquare test is applied on education level and expenditure group to test out the significance. Education Level * Exp_Grp Crosstabulation Exp_Grp More Than
Education Level
Bachelors
Masters
Others
Total
Less Than 5000
5000 - 11000
11000
Total
Count
24
16
2
42
% within Education Level
57.1%
38.1%
4.8%
100.0%
Count
14
21
1
36
% within Education Level
38.9%
58.3%
2.8%
100.0%
Count
12
7
3
22
% within Education Level
54.5%
31.8%
13.6%
100.0%
Count
50
44
6
100
% within Education Level
50.0%
44.0%
6.0%
100.0%
Chi-Square Tests Value
df
Asymp. Sig. (1-sided)
a
4
.067
Pearson Chi-Square
7.033
N of Valid Cases
100
The researcher can wrap up on the basis of analysis that at 5 percent significance level, the data provide sufficient evidence to conclude that the usage of credit card is not affected by education; therefore the researcher can accept the null hypothesis.
27
4.2.5 HIGH INFLATION AND CREDIT CARD
H0: Credit card usage is not affected by High Inflation. HA: Credit card usage is affected by High Inflation. To verify the acceptance or rejection of this Hypothesis developed for the study, Onesample t test is applied on group inflation to test out the significance. One-Sample Statistics
Grp_Inflation
N
Mean
Std. Deviation
Std. Error Mean
100
.3300
.47258
.04726
One-Sample Test Test Value = 0.5 95% Confidence Interval of the Difference t Grp_Inflation
-3.597
df
Sig. (2-tailed) 99
Mean Difference
.001
Lower
-.17000
Upper
-.2638
-.0762
The researcher can wrap up on the basis of analysis that at 5% significance level, the data does not provide sufficient evidence to conclude that increase in the inflation has a positive impact; therefore the researcher can accept the null hypothesis.
4.2.6 HIGH INTEREST RATE AND CREDIT CARD
H0: Credit card usage is not affected by High Inflation. HA: Credit card usage is affected by High Inflation. To verify the acceptance or rejection of this Hypothesis developed for the study, Onesample t test is applied on group interest rate to test out the significance.
28
One-Sample Statistics
Grp_Interest
N
Mean
Std. Deviation
Std. Error Mean
100
.2800
.45126
.04513
One-Sample Test Test Value = 0.5 95% Confidence Interval of the Difference
Grp_Interest
t
df
Sig. (2-tailed)
Mean Difference
Lower
Upper
-4.875
99
.000
-.22000
-.3095
-.1305
The researcher can wrap up on the basis of analysis that at 5% significance level, the data does not provide sufficient evidence to conclude that increase in the interest rate have a positive impact; therefore the researcher can accept the null hypothesis.
29
CHAPTER # 5 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS 5.1 FINDINGS
This research assisted in verdict out that credit card usage is affected by age, gender and income level where as it is not affected by education level, high inflation and high interest rate. All the age group use credit card as per their desire needs out of 100 respondents 7 percent are below 20 years, 52 percent respondents are between 20 to 29 years which is the largest user group of using credit card followed by 24 percent between 30 to 39 years of age and 17 percent of age above 40 years. The highest expenditure done through credit card is on retail stores i.e. 23 percent. Among 100 respondents 65 percent are male credit card user and 35 percent respondents are female, showing clear picture that male respondents prefer more spending on credit cards as compared to females. Most of the respondents i.e. 48 percent of them use credit card less than 5 times in a month. High inflation has no affect on spending of the respondent as 42 percent have view of less affecting followed by no affect of 25 percent, only 33 percent respondent believe that high inflation affects their spending on credit card. High Interest rate likely high inflation have no affect on spending of the respondent as 46 percent believe that it is less affecting their spending followed by 26 percent with no affect on their spending and only 28 percent who believe that it affects their spending on credit card. 5.2 CONCLUSION
Subsequent to the data collected from respondents and its analysis through the SPSS software the things that were highlighted are that the consumers expenditure pattern is not affected by high inflation, high interest rate and education level but consumers expenditure pattern is highly affected by three demographic factors i.e. age, gender and income level out of the four used in this study. Survey methodology was used to collect data in the form of closed end questionnaire to be filled by credit card users. All the data 30
collected from the respondents belong to Karachi City of different age group belonging to different professions. 5.3 RECOMMENDATION
After the research and its complete analysis the thing that would be recommended are as follows;
Banks can attract more users by doing mass marketing i.e. targeting all marketing segments.
Banks can attract more users by focusing on people from all age groups by allowing different credit limits to different credit card users as per their spending i.e. a student would be having lower expenditure as compared to adult so his credit limit should be less as compared to that of an adult.
Banks can attract more users especially females by providing great facilitation rewards on usage like on jewellery, home appliances etc.
31
REFERENCES http://ezinearticles.com/?A-History-and-Background-of-Credit-Cards&id=284713 http://www.businesscreditcardprocessing.com/credit_card_processing.php http://waytoohigh.wordpress.com/2008/01/21/background-on-credit-card-interchangecollective-price-fixing-antitrust-litigation-2/ http://creditcard.trendsdaily.net/you-know-history-and-background-of-credit-cards.html http://www.articlecity.com/articles/business_and_finance/article_7236.shtml http://www.abcarticledirectory.com/Article/Background-and-History-of-CreditCards/56929 http://www.creditcards.com/ http://www.sbp.org.pk_reports_annual_arFY09_Vol2_Chapter-5
http://www.pakistancreditcards.com/ http://www.economywatch.com/pakistan-credit-cards/ http://www.time.com/time/magazine/article/0,9171,1893507,00.html http://propakistani.pk/2010/05/18/e-payments-grow-to-rs-4-5-trillion-in-q3-2010/ http://www.sbp.org.pk_reports_annual_arFY09_Vol2_Chapter-5 Geanakoplos, John and Dubey, Pradeep "Credit Cards and Inflation", Cowles foundation for research in economics Yale University, PAPER NO. 1709 (June, 2009), 1-38 White, Kenneth J. "Consumer Choice and Use of Bank Credit Cards: A Model and Cross-Section Results", the Journal of Consumer Research, II, 1 (June, 1975), 10-18 Brito, Dagobert L. and Hartley, Peter R. "Consumer Rationality and Credit Cards", the Journal of Political Economy, 103, 2 (April, 1995), 400-433
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Hirschman, Elizabeth C. "Differences in Consumer Purchase Behavior by Credit Card Payment System", The Journal of Consumer Research, VI, 1 (June, 1979), 58-66 Plummer, Joseph T. "Life Style Patterns and Commercial Bank Credit Card Usage", the Journal of Marketing, 35, 2 (April, 1971), 35-41 Feinberg, Richard A. "Credit Cards as Spending Facilitating Stimuli: A Conditioning Interpretation", the Journal of Consumer Research, 13, 3 (December, 1986), 348-356 Sienkiewicz, Stan “Credit Cards and Payment Efficiency, Federal Reserve Bank of Philadelphia Payment Cards Center Discussion”, Paper 01-02, (August, 2001), 1-13 G. Arano, Kathleen "Modeling credit card borrowing by students”, Fort Hays State University, (2007), 27-38 Mann, Ronald J. "Credit Cards and Debit Cards in the United States and Japan", Monetary and Economic Studies, (2002), 123-159
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APPENDIX A QUESTIONNAIRE Q 1.
Do you use credit card to facilitate your expenditures?
Q 2.
What is your current age?
Q 3.
What is your gender?
Q 4.
What is your education level?
Q 5.
What is your Current Income? (in Rupees thousands)
Q 6.
How often do you use credit card in a month?
Q 7.
On Which category do you make the Highest Amount of Expenditure?
Q 8.
How much in a month you usually spend on Retail Store? (in Rupees)
Q 9.
How much in a month you usually spend on Furniture? (in Rupees)
Q 10.
How much in a month you usually spend on Jewellery? (in Rupees)
Q 11.
How much in a month you usually spend on Clothing? (in Rupees)
Q 12.
How much in a month you usually spend on Dine Out? (in Rupees)
Q 13.
How much in a month you usually spend on Utility Bills? (in Rupees)
Q 14.
How much in a month you usually spend on Air Travelling? (in Rupees)
Q 15.
How much in a month you usually spend on Fuel? (in Rupees)
Q 16.
How much in a month you usually spend on Electronic Goods? (in Rupees)
Q 17.
How much in a month you usually spend on Education? (in Rupees)
Q 18.
If Inflation is High, will it influence your expenditures?
Q 19.
If Interest Rate is High, will it influence your expenditures?
Q 20.
Which of the following expenditures gets highly affected by Inflation?
Q 21.
Which of the following expenditures get highly affected by Interest Rate?
Respondent Details Name: Occupation:
34
APPENDIX B
DATA ANALYSIS
35
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