CHAPTER FOUR

The Changing American Society: Demographics and Social Stratification

McGraw-Hill/Irwin
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

Demographics
Describe a population in terms of its size, distribution, and structure.

Population Size Distribution

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A Tale of Three Cities

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Demographics: Occupation

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Demographics: Education

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Demographics: Income
Enables but does not generally cause or
explain them What is wealth? Subjective Discretionary Income Total Family Income

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Demographics: Age
18-24 25-34 35-44 45-54 55-64 65+

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Consumer Insight 4-1

Cognitive age is measured on four dimensions.
What additional dimensions, if any, do you think should be added? Do you think cognitive age is a valid concept? Why? If the meaning of age is a cultural concept, how would the concept and measurement of cognitive age change across cultures? How can marketers use cognitive age?

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Consumer Insight 4-2

The percentage of the American
population that is elderly is going to increase dramatically over the next 20 years. How is this going to change the nature of American society? What ethical and social responsibilities do marketers have when marketing to the elderly?

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Generations/Age Cohorts
Generation/Age Cohort: a group of persons
who have experienced a common social, political, historical, and economic environment Cohort Analysis: the process of describing and explaining the attitudes, values, and behaviors of an age group as well as predicting its future attitudes, values, and behaviors

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Understanding American Generations

Pre-depression (Before 1930) Depression (1930 to 1945) Baby Boom (1945 to 1964) Generation X (1965 to 1976) Generation Y (1977 to 1994) Millennials (After 1994)

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Social Standing Influences Behavior

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The Coleman-Rainwater Social Class Hierarchy

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The Coleman-Rainwater Social Class Hierarchy

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Upward-Pull Strategy

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Group Exercise
Form a group of four people Develop a scale of measurement for social status Be able to answer the following:
Single-Item or Multi-Item? What is the main effect (most important factor)of the
index? What are the strengths and weaknesses? What products or services would be the best application of your index?
4

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Measuring Social Status

Single-Item Indexes
Education Occupation (Socioeconomic Index: SEI) Income
Relative Occupational Class Income Subjective Discretionary Income

Multi-Item Indexes
Hollingshead Index of Social Position Warners Index of Status Characteristics Census Bureaus Index of Socioeconomic Status
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Hollingshead Index of Social Position (ISP)

Occupation Scale (Weight of 7) Description
Higher executives of large concerns, proprietors, and major professionals Business managers, proprietors of medium-sized businesses, and lesser professionals Administrative personnel, owners of small businesses, and minor professionals Clerical and sales workers, technicians, and owners of little businesses Skilled manual employees Machine operators and semiskilled employees Unskilled employees
4

Score
1
2 3 4 5 6 7

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Hollingshead Index of Social Position (ISP)

Education Scale (Weight of 4) Description
Professional (MA, MS, ME, MD, PhD, LLD, and the like) Four-year college graduate (BA, BS, BM) One to three years college (also business schools) High school graduate Ten to 11 years of school (part high school) Seven to nine years of school Less than seven years of school

Score
1 2 3 4 5 6 7

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Hollingshead Index of Social Position (ISP)

ISP score = (Occupation score X 7) + (Education score X 4)

Classification System Range of Scores

11-17 18-31 32-47 48-63 64-77

Description
Upper Upper-middle Middle Lower-middle Lower
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Warners Index of Status Characteristics (ISC)

Score Occupation
1 Professionals and proprietors of large businesses Semiprofessionals & officials of large businesses Clerks and kindred workers Skilled workers Proprietors of small businesses Semiskilled workers Unskilled workers

Characteristics Source of House Income Type

Inherited wealth Earned wealth Profits & fees Salary Wages Private relief Public relief & nonrespectable income Excellent houses Very good Good houses

Dwelling Area
Very high: Gold Coast, North Shore, etc. High: better suburbs & apartment house areas Above average: areas all residential, space around houses, apartments in good condition Average: residential neighborhoods, houses no deterioration Below average: area beginning to deteriorate, business entering Low: considerably deteriorated, run down and semi-slum Very low: slum

2 3

4 5 6 7

Average Fair houses Poor houses Very poor houses

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Warners Index of Status Characteristics (ISC)

ISC score = (Occupation X 4) + (Income source X 3) + (House type X 3) + (Dwelling area X 2)
Classification System Range of Social Strata Population Scores

Breakdown
Upper-upper Lower-upper Upper-middle Lower-middle Upper-lower Lower-lower
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12-17 18-24 25-37 38-50 51-62 63-84

1.4% 1.6 10.2 28.8 33.0 25.5

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Census Bureau Index of Socioeconomic Status (SES)

Income Category* Score Education Category Score Occupation Category Score

Under $3,000
$3,000-$4,999 $5,000-$7,999 $8,000-$9,999

15
31 62 84

Some grade school

Some high school High school graduate

10
42 67

Laborers
Students Service workers Operators

20
33 34 58

Grade school graduate 23

$10,000-$14,999
$15,000-$19,999 $20,000-$29,999

94
97 99

Some college
College graduate Graduate school

86
93 98

Craftsmen
Clerical sales Managers Professionals

58
71 81 90

$30,000 and over 100

*Note: Income levels should be adjusted by consumer price index before using. Source: U.S. Bureau of the Census, Methodology and Scores of the Socioeconomic Status, Working Paper No. 15 (Washington, D.C.: U.S. Government Printing Office, 1963).
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Census Bureau Index of Socioeconomic Status (SES)

SES score = (Income) + (Education) + (Occupation) 3 Classification System Range of Social Strata Breakdown Upper Upper-middle Middle Lower-middle 90-99 80-89 45-79 0-44 Population Scores 15.1% 34.5 34.1 16.3

*Note: Income levels should be adjusted by consumer price index before using. Source: U.S. Bureau of the Census, Methodology and Scores of the Socioeconomic Status, Working Paper No. 15 (Washington, D.C.: U.S. Government Printing Office, 1963).

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Using Social Class

Choosing the best measure
Will a single-item index be accurate
enough? What is the underlying factor I should be concerned with?

Issues and Assumptions

Upward Social Mobility Class Consciousness Dated social-class measures
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Positioning and Social Class Segments

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Perceived Social Class Appeal

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