Reaching social consensus family budgets: The Spanish case

Abstract

The study of family budgets has been traditionally used to analyse consumers’ behaviour and estimate cost-of-living since the end of 19th century. Generally speaking, the computation of the budgets has been based on two different methodologies, the prescriptive and the descriptive method. Both present several drawbacks like the comparison among different areas, family types and over time.

This paper proposes a new methodology for reaching family budgets, namely social consensus family budgets, to overcome such problems and examine the main features of the novel approach. The suggested method uses the minimization of the differences with respect to the consumer’s preferences to obtain a solution that summarizes single behaviour into a social preference. This approach is especially conceived for preferences on possibly related-expenditure groups. In addition, several algorithms are introduced to compute the social family budgets. Finally, the contribution includes the Spanish case as an example of reaching some social consensus family budgets in order to show the operational character and intuitive interpretation of the proposal approach.