Thursday, April 5, 2012

Consumption, Then and Now

From NPRs Planet Money a fascinating graph showing percentage of income spent on consumption categories in 1949 and 2011:

Source: Bureau of Labor Statistics
Credit: Lam Thuy Vo / NPR
What struck me immediately, of course, was the decline in the percentage spent on food.  This is a function of both our increasing wealth and the massive productivity gains in agriculture.  We spend more on homes and cars and health care.

The jump in spending on housing between 1949 and 2011 is also striking. It's worth noting that people are buying (and renting) much bigger homes today. In 1950, the average new house was less than 1,000 square feet; in 2000, the average new house was over 2,000 square feet.

The rise in spending on transportation was driven by the spread of cars. In 1950, there were only three vehicles for every 10 Americans. By 2000, that had risen to eight vehicles for every 10 Americans.

But I expected a bigger jump in recreation as leisure is a big part of what we consume, but I suppose we would see that in the hours worked which is not a part of this.


jessibeaucoup said...

So... the graph adds up to 100%, I checked. But I'd be curious to know what percentage of income the 'consumption categories' represent. You mention that the decline in percentage spent on food is a function of our increasing wealth and productivity gains but I'd be curious if the government subsidization of our food has also changed between the years shown. It would also be interesting to know more about the impact in SNAP and WIC type programs on this. Has spending on those programs increased and, if so, does that make it appear that there's a smaller percentage spent of food or is that included in the graph? Is this decrease a good thing or does it represent a shift from more expensive but healthier foods to cheap junk foods (which I would consider a bad thing)?

Just a few of my random thoughts...

Jeff Alworth said...

What's up with the health care costs? How are those calculated? (The average health insurance plan costs something like a thousand dollars a month, right? And the median income is fifty grand. So how is it only 7%? (I assume they're based on median incomes, because mean incomes would throw things off pretty wildly.)

It also reveals the issue of averaging--those costs are distributed differently depending on your age, probably race, and other factors.

Patrick Emerson said...


It is household consumption data - so if you have employee provided health insurance, its not counted. At least I believe this is the case.