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May, 2001, Vol. 124, No. 5

A century of family budgets in the United States

David S. Johnson, John M. Rogers, and Lucilla Tan

The measurement of family budgets and budget standards dates back to the late 19th century. Such budgets have been used to develop cost-of-living estimates, to assess wage rates, and to examine the standard of living. Early budget standards and family budgets were based on two different methodologies: expert decisions were devised to ascertain how much income a family might require to reach a certain level of living, and estimates were obtained on the actual purchasing behavior of particular families. The first, prescriptive, method was often used to determine the "sufficient" amount needed to provide a "standard of health and decency" or some other measure of the level of living. The second, descriptive, method was often used to describe consumer spending and to determine cost-of-living indexes.¹ 

Prescriptive and descriptive types of family budgets were constructed at the Bureau of Labor Statistics throughout most of the 1900s. Prescriptive budgets attempt to determine a set of goods and the expenditures for each of the goods that might enable a family to attain a certain standard of living. These types of budgets were first developed in 1908–09, and there have been many subsequent estimates of fair, modest, adequate, and even minimally sufficient budgets. The BLS family budget program produced budget standards (using a prescriptive method) from 1966 to 1981. Alternatively, descriptive budgets represent observed expenditures for particular families at some point in the distribution of income or expenditures. Each year, BLS produces average expenditures for various family types, which can be viewed as types of descriptive budgets.

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Footnotes

1 Gordon Fisher, "From Hunter to Orshansky: An Overview of (Unofficial) Poverty Lines in the United States from 1904 to 1965," Poverty Measurement Working paper (Department of Commerce, Bureau of the Census, 1997); and "Poverty Lines and Measures of Income Inadequacy in the United States since 1870," paper presented at the meeting of the Social Science History Association, October 1997.

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The changing food-at-home budget: 1980 and 1992 compared.—Dec. 1998.
How family spending has changed the U.S.—Mar. 1990.