Harry Dent Demographics
Harry Dent is an American writer who was born in the 1950s. He has written several articles that relate to the economy of the United States of America. His major arguments were based on predictions on the future economy of the country. He came up with the concept of demographics that was important in forming trends in the future. In this concept, he incorporated aspects like age, education and family backgrounds in economic attributes like income, consumption and expenditure (Jim 2006). Harry also studied the changes in these aspects and found out how they would affect the economy of the United States of America. However, he focused more on the long term rather than the short term forecasting.
In his concept of demographics, Harry argued that the previous patterns of consumers can be used to predict future behaviors. For instance, the consumption by consumers tends to change as their age increases (Harry 2000). This can be attributed to the change in demand for goods and services as one is aging. It is therefore important to define demand in order to understand Harry’s concept. Demand is the quantity of goods and services a person is willing and able to buy at the prevailing market price at a certain period of time. When a person is at a young age, he does not consume much since he does not have a stable source of income. He only depends on his parents in order to consume. As the age increases, he will get a job from which he will earn income. According to the theory of demand, the demand for goods and services increases as the income of a person increases. This means that consumption will also increase.
According to Harry, the consumption of a consumer will also increase at the age of thirties since the person will be having a young family (Jim 2006). More so, the needs of the family will tend to increase, meaning consumption will increase. At the age of between forty and fifty years, the family will have grown and hence the needs of the family will continue increasing. This is because some of the children will have gone to higher learning institutions that demand large amounts of money. In addition to this, the head of the family will be at a higher social life. This means that he will strive to maintain his social status by maintaining his level of consumption. Harry argued that the consumption pattern of consumers is optimal between 46 and 50 years.
Based on the demographic trends of Harry Dent, the consumption by consumers will tend to decrease after fifty years old. By this time, the children of the consumers will have finished schools. Other children will be married by this time, meaning they will no longer be depending on the parents. More so, the parents will have completed purchasing the most basic items like household items, houses and possibly a car. Therefore, most of their earned income will be put into savings. Many consumers will retire at the age of sixty years old and by this time, they will be net savers (Harry 2000).
Demography affects the behaviors of consumer behavior. Consumer behavior on the demographic point of view is affected by aspects such as age, education, gender and level of income. The level of education creates awareness to individuals regarding technological goods. A person who is more educated is likely to buy modernized goods more than an illiterate person. For instance, an educated person is more likely to buy a computer than an illiterate person. Similarly, young people have enough time to go for shopping, unlike aged people (Harry 2000). Most of the old people are busy in offices. This means that they rarely find enough time to go for shopping. On the other hand, most young people do not have jobs, giving them a chance to look for variety of goods and services. People who are in the high income level are likely to buy luxurious goods due to their spending ability. The culture of a person limits him to buy some goods. For instance, a Bible cannot be sold to a Muslim, while a Koran cannot be sold to a Christian.
Demography also has effects on firms. Various firms have formed target groups based on differences in demography in order to maximize profits. For instance, firms that produce luxurious goods have targeted high income earners. More so, most marketers know that the young people are more fashion oriented. They therefore sell their fashion goods to the young consumers in order to maximize sales (Jim 2006). Most firms have incorporated training programs in order to improve technological innovations in the company and to increase modernized goods. This will help to meet the demand of the more educated people in the country.
The government of a country plays a great role in the provision of goods and services. It does so by collecting revenue from businesses and other financial activities. Demographics influence the behavior of the government in relation to revenue generation and the control of macroeconomic policies. The government is aware that at the age of thirties, the consumption of individuals is increasing due to increased income. It will therefore maximize revenue by taxing the income of these individuals. It also does this with a view to control inflation through the management of the aggregate demand of the economy. The government may also use taxes to regulate the consumption of certain goods that are perceived to be harmful. One example of these goods is cigarettes. When consumption is high, more cigarettes will be consumed. The government will therefore tax the smoking individuals in order to reduce smoking while at the same time earning revenue (Jim 2006).
In conclusion, I agree with Harry Dent’s statistical inferences. One reason for this is that the statistical inferences are based on the occurrence of past events. These events act as evidence to his demographic concept. More so, the data was collected through surveys that were undertaken on various age and income groups. Furthermore, the concept of demography is practical in real life situations since it can help investors to use trends to make prompt decisions regarding investments. Finally, demography has proved to be an important aspect for decision making in firms. Therefore, various organizations should make a consideration of all aspects of demography in order to achieve the set objectives.
Harry, D, (2000) The Roaring 2000s Investor. South Carolina. Harry Dent Foundation.
Jim, F, (2006) Harry Dent and Demographic Investing. New York. Blake Publishers.
