Households in India can be classified into three types: nuclear families where one married couple lives with, in some cases, unmarried siblings; extended families which have more than one married couple from different generations; and joint families where more than one married couple of the same generation live together, which are essentially multi-income families.
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That the joint family system is out of mode in urban India is clear from the fact that only 8% of the households belong to this category in India’s top 112 cities. Nuclear households dominate the urban landscape with almost 70% of households falling in this category, while extended families take up the remaining 23%, a sizeable share. This reflects, to some extent, the lack of housing capacity to to accommodate nuclear families, a status that upwardly mobile urban Indians seem to aspire to.
Looking at the largest Indian cities, the alpha cities and the cities in the south have a larger proportion of nuclear families, while those in the west have a greater tendency towards more extended and joint family setups. Why is that the case? There are likely to be economic and socio-cultural reasons that have not been studied in great detail. But the patterns are clear.
Households in the south are predominantly nuclear, have fewer children and tend to have higher incomes than their peers in the north and east. Resource allocation within the households, therefore, takes on a very different character.
The western part of India has also benefited from greater economic growth. However, a significantly larger share of households continue to live in extended and joint families. Decision-making in these households tends to be different, with a greater number of people having a say in major purchases.
At the other end, spur-of-the-moment purchase decisions will be less likely, especially in durables that the household members share in the larger and more complex households of western India. At the same time, per capita expenditure in larger households tend to be lower, leading to greater possibility of savings or purchase of luxuries, depending upon household preferences.
As India and Indian consumers change rapidly, there is one churn that has already played out in urban India. The joint family is dead and the extended family is dying. It is now the era of nuclear families.
Demand Curve is a weekly column by research firm Indicus Analytics Pvt. Ltd on consumer trends and markets. Your comments are welcome at firstname.lastname@example.org
Graphics by Ahmed Raza Khan / Mint