It is well accepted in the business literature that most consumers pass through a series of stages in their lives known as the "family life cycle." This concept essentially explains that consumer spending patterns go through a life cycle, and each stage presents a unique set of conditions affecting the consumer's ability and willingness to consume various items and undertake the financial burdens involved with their acquisition. Although the family life cycle has been presented by several authors with minor variations,1 it is essentially expressed in the following stages: (1) bachelor stage (young single individuals), (2) young married couples (no children), (3) full nest (young married couples with children), (4) full nest 1 (youngest child under 6), (5) full nest 2 (youngest child 6 or over), (6) full nest 3 (older married couples with dependent children), (7) empty nest (older married couple with no children at home), and (8) solitary survivors (older single or widowed people).2 From the viewpoint of business firms, it would be extremely useful to be able to determine the variables which affect entry of a family into the various stages of the life cycle; it would also be useful to forecast the number of persons entering into each stage of the cycle in any one year. Although it would be interesting and useful to determine this information for all stages, for reasons of economy this study focuses attention only on stage 2 of the family life cycle, that is, young married couples (no children). The variables affecting entry into this stage are determined, and a forecasting model for the number of new families entering this stage is constructed in this paper. This stage was selected for examination because it possesses the following characteristics which make it an extremely important stage to those interested in marketing. (1) Consumers are at a peak in terms of financial capability which will decline in the next stage and for some time into the future. (2) Consumers are highly susceptible to advertising in this stage. (3) Consumers display a strong propensity to purchase expensive items more in this stage than in others.'