A time series analysis of Service Consumption expenditures as determinants of the consumer discretionary and consumer staples sector price movements, 2004-2014.

A growing portion of U.S. Consumer income is spent on services. Both directly and indirectly these expenditures effect the stock market prices of firms in the consumer discretionary and consumer staples sectors. The objective of this study, therefore is to determine if the market prices of these two sectors co-vary with the growth in consumer services expenditures. The period of analysis is 2004-2014. Quarterly pricing and expenditure level data are used in the analysis. Using regression analysis, the hypothesis to be tested is service expenditures and discretionary and staples sector prices co-vary directly with each other. We expect the b coefficients in the regression analysis to be greater than zero and statistically significant at the 95% confidence level.