News Column

A Melting Pot with Flavor

December 2003, HISPANIC BUSINESS Magazine

Have U.S. Hispanics created their own culture, or do they live in a halfway world between Latin America and the United States? The question has tantalized researchers, marketers, and artists for decades. On the basis of historical and recent data, it appears that U.S. Hispanics are in the process of developing and solidifying their own U.S. identity. For that reason, this special Hispanic Business Culture Report bears the subtitle "Market in Flux."

To understand the cultural dynamics of the market, academic researchers have divided the population using a quadrant system (see graph). The vertical axis measures the degree to which individuals identify themselves as Hispanic. The horizontal axis shows the degree of affinity to the Anglo culture. The lower left quadrant represents people with low identification in either culture detached, insulated individuals. The upper left quadrant are those who see themselves as completely Hispanic, with minimal contact with or interest in mainstream U.S. culture. This group consists primarily of new immigrants and older first-generation Hispanics. The lower right quadrant consists of those who want to replace, or have already replaced, their Hispanic identity with a mainstream identity. Finally, the upper right quadrant represents Hispanics who want to keep their Hispanic identity while incorporating the mainstream culture into their experience.

Research on the following pages shows the last group with the upper hand; the data cited indicates that Hispanics tend to acculturate more than assimilate. Currently, however, it is a market in motion. And the motion is accelerating, given the young skew of the Hispanic market and the trend of increasing intermarriage between certain Hispanic groups and Anglos. The implications of this cultural shift in terms of language use, earning power, and self-identification are detailed in this special report.

The main drive behind this demographic shift lies between the first generation of Hispanic immigrants and subsequent generations. Upon arriving in the United States, foreign-born Hispanics are identified with the culturally isolated quadrant; often, their children or grandchildren complete the journey to assimilation or acculturation. For now, the Hispanic market remains in the main a bifurcated market, with foreign-born and third-generation Hispanics at the poles of the cultural spectrum, and much of the market moving between them.

In addition, while social scientists define "ideal types" for the purposes of data analysis, hard reality does not conform completely to these types. In particular, the line between acculturated and assimilated can blur easily and merits further academic research.

For now, this Culture Report rests on four data sources: a 1998 McKinsey analysis, a
2003 VNU Spectra study that confirms the McKinsey findings, the 2002 Pew Hispanic Center National Survey of Latinos, and an inter-generational RAND study by James P. Smith. Other sources, such as the 1985 book "Hispanics in the U.S. Economy" by George Borjas and Marta Tienda, and Census 2000 numbers, play a fundamental supporting role.

The McKinsey and VNU studies start with different methodologies but arrive at the same conclusion. The McKinsey analysis looks at Hispanics by language segmentation. The researchers identify socio-demographic variables for each of the four segments (quadrants on the graph) and use Census projections to map the household characteristics of each group. The researchers also add psychographic data based on the groups' characteristics. In contrast, the VNU Spectra study uses not language but consumption habits as the main variable of acculturation. The methodology tracks consumption by Hispanics across 4,200 product groups to calculate an index of acculturation based on the degree of similarity to or difference from non-Hispanic consumers. These groups are then linked to socio-demographic variables (employment, age, income, family size, and language) that predict acculturation levels.

This culture report completes a trilogy of portraits of the market in the 21st century, which started with a special report on the Hispanic middle class (December 2001 issue) and another on language use (December 2002). For more information on these trends, readers should consult the HispanTelligence publication Hispanic Consumers in Transition: A Descriptive Guide, available at

"Assimilation Across the Latino Generations," American Economic Review 93(2), 315-319, May 2003.

2002 Pew Hispanic Center National Survey of Latinos


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