Friday, 07 November 2008 01:00

The new BoomBustBlog.com Socio-economic stratification model

Here is something that should spark some discussion. As I stated in a previous post, I owned and ran a social class discussion, research and study site (from and applied perpsective, I am not a scientist) that became very popular. I offered tools and research that I utilized in my residential real estate investing, and have decided to offer a model to this blog. For those who wonder why I am offering this model here, just think of it as my layman's version of applied behavioral finance theory.

I welcome all constructive comments, and feel free to pass the model around the Web. Registration is not required.

pdf Socio-economic stratification model (156 kB 2008-11-07 13:47:25)

Last modified on Friday, 07 November 2008 01:00

6 comments

  • Comment Link Benson Lee Tuesday, 11 November 2008 12:15 posted by Benson Lee

    I think you are onto something here since the model presents a different way to stratify data. I can imagine using this model for investing in actual pieces of real estate (or other hard assets) where individuals lack hard information about residents in that locale.

    Perhaps (as with myself) other readers lack the background to comment constructively. I've personally been trying to acquaint myself with what sociology scholars have written about class divisions in the past. One possible issue with more recent socioeconomic indices is that they do not differentiate among social, political and economic clout. Social and political variable inputs may confound results if they are not given proper weight.

    Another issue is that most sociological statistics given focus on nominalist rather than realist definitions of class. Since data on current income, net worth, etc. are more readily available than the childhood backgrounds of residents, the present snapshot characteristics of people are used almost exclusively in indices like the one you've created.

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  • Comment Link Reggie Middleton Monday, 10 November 2008 04:10 posted by Reggie Middleton

    I don't follow GM as an investor, only through the news. The reit comparison is available through the downloads link (where all the pdf and excel downloads are available). Sort by date to see the most recent additions.

    @Manutd
    I posted the model to spark discussion on class, wealth, race etc. Since it appears that the Obama win was a hot topic. Evidently the interest wasn't there or the topic is an uncomfortable discussion.

    The model can be used to illustrate the behavior (albeit very loosely) of different socio-economic groups in an extreme economic downturn, ex. the upper middle class will spend more time in Costco, where the middle class will spend more time in WalMart, potential displacing the working class as the primary demographic and target market. This portends a larger revenue slice for Walmart and a higher revenue per unit sold count.

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  • Comment Link ken09 Saturday, 08 November 2008 16:05 posted by ken09

    Reggie have you commented on GM? Maybe I've missed it,but maybe you could give the 120/130ish IQ'ers here the scoop on GM's common eh? Cramer has said the common on GM will get hit along the lines of AIG. Kudlow was shouting ch-11 but I don't think that is going to happen since no one will want the buy a car if the know the company is going bankrupt. Cramer again was talking Deutsch and saying the FED will take stakes in the big 3 and he did mention the common will get hit. Reggie, is there an opportunity here with GM puts still way the hell down here in the 4's? Could the common take a 50% plus hit here? Have you thought this one out?

    Also, when can we expect that piece of work on the commerical reits that you said would be out in 48 hours?


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  • Comment Link Jonathan Fletcher Saturday, 08 November 2008 11:11 posted by Jonathan Fletcher

    Reggie,

    I don't get it Reggie, I know what my status is without doing this model. I knew I was upper middle, not becuase I have ever done anything like this before, I just knew. It seems to simplistic to me although there is where I fear I must be missing something, but what I am missing I can't figure out in terms of how is this applied. I can see it would have a good realestate app. though I would know how to apply it, I would always buy in the best area's I could afford at times when prices were depressed. I'm not that smart so I am sure I am misisng something.
    Anyway enjoy the site very much

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  • Comment Link Reggie Middleton Saturday, 08 November 2008 08:07 posted by Reggie Middleton

    I'm surprised that there have been no comments on the model. I will comment on this extensively when I get a chance to sit still.

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  • Comment Link shaun noll Friday, 07 November 2008 18:58 posted by shaun noll

    an interesting break down at the end reggie, surprised a little by the % of US classified in those lower income brackets.

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