Photos: The American Affluence Research CenterAt the end of the day, research value is often determined by methods of data collection used. We have written before on Ron Kurtz, CEO of The American Affluence Research Center and his research, as his is the type of work that stands the test of time: it is longitudinal, being the 21st in a continuing series of twice-yearly surveys; and it focuses on the wealthiest 10% of all U.S. households, as determined by the Federal Reserve Board, based on net worth.
The AARC survey is mailed to a randomly selected national sample of 4,500 men and women, meeting the minimum net worth requirement of $800,000. These Spring 2012 results are correlated from the 372 respondents who answered this survey, with the maximum margin of error is 5%, with a 95% confidence rate. Thus, the following is a snapshot of a growing optimism in the economy and spending, however, it may also depict a calm before the storm.
That said, and remembering that the last survey, Fall 2011, where there was a substantial decline in the economic outlook, the Spring 2012 depicts a more positive perspective on current business conditions, as well as a more positive outlook on personal income and net worth. In the Spring 2011 survey, 57% of the affluent feel their financial security is better or the same as it was in 2007 and 82% believe their net worth will be the same or better in 2013.
However, as Mr. Kurtz admonishes in his survey results, “There is a risk that the mood and spending plans of the affluent could decline later in the year, as it did in 2011, depending on changes in the key indicators of employment and GDP, the stock market, the credit crisis in Europe, congressional gridlock on budget and tax issues, and the outlook for the 2012 election.” These are the main variables that could change the mood of the survey population, thus changing attitudes and feelings toward purchasing anything in the latter half of this year.
However, now, the purchase intentions of this group rose slightly from the Fall 2011 survey, as regards buying a new motor vehicle, the possibility of major home remodeling, and acquisition of a vacation home. A substantial amount of possible additional purchases are represented by the respondents who are “undecided” about a cruise (8%), auto (10%), remodeling (8%), a primary residence (6.6%), and a vacation residence (7.5%). Given the 11.4 million households represented by this survey, it can be estimated that the affluent represent potential purchases of 2.3 million autos, 1.8 million remodeling projects, 1.7 million cruises (total of 3.4 million cruisers), 365,000 primary homes, and 433,000 vacation homes.
The index for all 17 product categories rose from the Fall 2011 survey. Increases were primarily single digits (and some only by one point) but five categories rose by double digits: domestic vacation travel (+17), international vacation travel (+13), dining in upscale restaurants (+11), collectibles (+15), and political contributions (+17).
More results of survey questions relating to economic change are listed below:
Brands most used and appreciated are:
Part II will be examining the Harrison Group’s research findings in the 2012 Survey Of Affluence And Wealth In America. Visit AffluenceResearch.org to learn more.