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Luxury or Necessity?

Jan 12, 2011 • Behavioral Economics, Demand, Supply, and Markets, Households, Macroeconomic Measurement • 166 Views    1 Comment

Can you live without your TV? Cell phone? Dishwasher? A Pew Research survey discovered that your answer in 2006 might have been different from now.

Cars were at the top with 88% of all respondents saying they needed one. But still, the number was 3% less than 2006. For microwave ovens, the recession created a massive switch with 21% fewer people saying they had to have one. For cell phones, as you might have guessed, opinion remained constant. For 2006 and 2009, 49% of all survey participants said that the cell phone was a necessity.

And, whether or not the recession directly affected you, your opinion about luxuries and necessities probably changed.

The Economic Lesson

Difficulty with paying rent or the mortgage was experienced by 21% of all respondents, contact with joblessness by 27%, and losing more than 20% in investment accounts by 47%. Seeing that so many people were specifically impacted while even those who had not been hit directly had a new outlook conveys the severity of the recent recession.

Do you feel that the 2009 stimulus package was an appropriate response?

 

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  • eleanor

    I no longer have a need to be concerned about adverse weather causing non-delivery of my NY Times..I have my daily EconLife news and I love it! What would I not give up? hmmmmmmm

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