Bureau of Labor Statistics
General Information:(312)353-1880 Media Contact: Paul LaPorte http://www.bls.gov/ro5 |
FOR IMMEDIATE RELEASE: Thursday, August 30, 2007 |
CONSUMER SPENDING PATTERNS
IN THE DETROIT METROPOLITAN AREA, 2004-2005
Consumer units 1/ in the Detroit-Ann Arbor-Flint, Michigan
metropolitan area spent an average of $51,219 per year in 2004-2005,
according to results from the Bureau of Labor Statistics' Consumer
Expenditure Survey. Regional Commissioner Jay A. Mousa noted that
this figure was 14 percent higher than the $44,928 expenditure level
for a typical household in the United States. Although households in
the Detroit area spent significantly more than the U.S. average, how
they allocated their dollars was generally similar to the typical
American household. Of the major expenditure items for an average
consumer unit in Detroit, only the share allocated for health care
was significantly below the U.S. norm and only the share for personal
insurance and pensions was measurably above that for the nation.
_______________________________
1/ See Technical Note for definition of a consumer unit. The terms
consumer unit and household are used interchangeably throughout the
text for convenience.
This report contains annual data averaged over a two-year
period-2004 and 2005. The data are from the Consumer Expenditure
Survey, which is collected on an ongoing basis by the U.S. Census
Bureau for the Bureau of Labor Statistics (BLS). The Consumer
Expenditure Survey is the only national survey that provides both
complete data on household expenditures and the demographic
characteristics of those households. CE data are available for the
nation, the 4 geographic regions of the country, and 24 metropolitan
areas. Survey data cannot be used to make cost of living comparisons
between areas. Expenditures vary among areas not only because of
economic factors such as the prices of goods and services and family
income, but also because of differences such as the age of the
population, climate, consumer tastes, family size, etc. However,
expenditure shares, or the percentage of a consumer unit's budget
spent on a particular category, can be used to compare spending
patterns across areas. An individual consumer unit may spend more or
less than the average, depending on its characteristics.
Housing, the largest expenditure category for a Detroit
household at $16,490, accounted for 32.2 percent of total
expenditures, close to the national share of 32.5 percent. In three
other metropolitan areas in the Midwest chosen for comparison, the
expenditure share for housing in Minneapolis-St. Paul (32.8 percent)
was also not significantly different from the U.S. average while in
Chicago (34.5 percent) and Cleveland (34.7 percent) the share was
measurably higher. (See chart A and chart 1.)
The majority of housing costs in Detroit (58.6 percent) went
for shelter, which includes mortgage interest, property taxes,
repairs, and rent, among other items. (See table A.) Nationally,
shelter made up 57.9 percent of all housing costs. Utilities, fuels
and public services accounted for 21.3 percent of total housing
expenditures locally, about the same as the 21.0-percent U.S.
average. The rate of homeownership in Detroit, at 78 percent, was
well above the national average of 68 percent and the highest among
the selected metropolitan areas, though the other three also had
above-average rates of homeownership.
Table A. Percent distribution of housing expenditures, U.S. and
selected metropolitan areas, 2004-2005
--------------------------------------------------------------------
|United | | | | Mpls-
Item |States |Detroit|Chicago|Cleveland|St. Paul
--------------------------------------------------------------------
Total housing | 100.0 100.0 100.0 100.0 100.0
Shelter | 57.9 58.6 60.3 56.6 58.1
Utilities, fuels & |
public services | 21.0 21.3 18.7 25.6 15.9
Household operations | 5.3 5.2 5.6 3.3 5.8
Housekeeping supplies | 4.1 3.4 4.2 4.3 4.2
Household furnishings |
& equipment | 11.7 11.5 11.2 10.3 16.0
--------------------------------------------------------------------
A typical Detroit area household allocated 18.1 percent of its
budget for transportation, on a par with the 18.0-percent national
average. However, expenditure shares for transportation were
significantly below that for the United States in the other three
Midwest areas, ranging from 16.2 percent in Chicago to 14.5 percent
in Minneapolis-St. Paul. (See chart 2.)
Of the $9,246 annual expenditure on transportation in Detroit,
95.2 percent was spent buying and maintaining private vehicles. (See
table B.) The remaining 4.8 percent of a Detroit household's
transportation budget was spent on public transit which includes
fares for taxis, buses, trains, and planes; the national public
transit share was 5.5 percent. The average number of vehicles per
household in Detroit was 2.1, close to the national average of 2.0.
Of the other three metropolitan areas in the Midwest, only
Minneapolis-St. Paul exceeded the national average with 2.4 vehicles
per, while Chicago and Cleveland averaged 1.8 vehicles per household,
a bit below the average for the nation.
Table B. Percent distribution of transportation expenditures, U.S.
and selected metropolitan areas, 2004-2005
--------------------------------------------------------------------
|United | | | | Mpls-
Item |States |Detroit|Chicago|Cleveland|St. Paul
--------------------------------------------------------------------
Total transportation | 100.0 100.0 100.0 100.0 100.0
Vehicle purchases |
(net outlay) | 43.0 31.5 45.2 33.7 36.7
Gasoline and motor oil | 22.4 23.0 19.8 23.8 21.7
Other vehicle expenses | 29.1 40.7 27.8 38.2 33.1
Public transportation | 5.5 4.8 7.3 4.3 8.5
--------------------------------------------------------------------
Detroit households spent 13.2 percent of their budget on food,
close to the nationwide average of 13.0 percent. The other three
metropolitan areas in the Midwest recorded food expenditure shares
that were significantly below that for the nation: Chicago and
Cleveland (both 11.8 percent) and Minneapolis-St. Paul (11.6
percent).
Of their $6,780 annual food expenditure, households in Detroit
spent 58.5 percent on food prepared at home. This compares to a
national average of 56.7 percent. Detroit households spent the
remainder of their food dollars (41.5 percent) on food prepared away
from home, which includes restaurant meals, carry-outs, board at
school, and catered affairs.
Consumer units in Detroit spent 4.4 percent of their budgets on
apparel, not significantly different from the 4.1 percent spent by
the average U.S. household. Expenditure shares for apparel were also
close to the national average in Chicago and Minneapolis-St. Paul.
At 3.0 percent, Cleveland's expenditure share was significantly below
that for the nation.
Payments for personal insurance and pensions accounted for 12.6
percent of the typical Detroit household's budget, measurably higher
than the share spent nationally, 11.1 percent. Of the three other
selected Midwest areas, only Chicago's expenditure share for personal
insurance and pensions, 10.3 percent, was significantly below the
national average.
Out-of-pocket health care expenses, which include health
insurance premiums, medical services, drugs (prescription and
nonprescription), and medical supplies, accounted for 4.4 percent of
total household expenditures in Detroit, significantly below the 5.8-
percent nationwide average. Chicago and Minneapolis (both at 5.3
percent), also had measurably lower expenditure shares for health
care.
Detroit area households spent 5.1 percent of their budget on
entertainment, the same portion allocated nationally. Expenditure
shares for entertainment averaged 4.8 percent in Chicago, 5.8 percent
in Cleveland, and 6.2 percent in Minneapolis-St. Paul. None of these
areas in the Midwest had expenditure shares that differed
significantly from the national average.
Cash contributions in Detroit area households accounted for 3.0
percent of the total expenditures, close to the national average of
3.4 percent. Consumer units in Chicago and Minneapolis also had
shares that did not differ significantly from that for the United
States. Only households in Cleveland spent a measurably smaller
portion of their budget on cash contributions, 2.7 percent.
###
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Changes in 2004
Beginning in 2004 the Consumer Expenditure Survey includes
imputed income estimates. While the imputed data provide more
reliable income estimates because they allow the inclusion of
households for which income data are not otherwise available, income
data from 2004 forward will not be strictly comparable to earlier
years.
This change also affects those expenditure items in the
personal insurance and pensions component that are derived from
income data. As a result of the changes in 2004, income data,
personal insurance and pensions, and average annual expenditures are
not strictly comparable to data from previous years. Data for 2004
and 2005 are comparable to each other.
For further information, contact the Division of Consumer
Expenditure Surveys, Office of Prices and Living Conditions, Bureau
of Labor Statistics, 2 Massachusetts Ave., N.E., Washington, DC
20212-0001 or call 202-691-6900.
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Technical Note
The current Consumer Expenditure Survey (CE) program began in
1980. Its principal objective is to collect information on the
buying habits of American consumers. The consumer expenditure data
are used in a wide variety of research by government, business,
labor, and academic analysts. The data are also required for
periodic revision of the Consumer Price Index (CPI).
The survey consists of two components collected by the U.S.
Census Bureau for BLS. The Diary Survey, completed by participating
consumer units for two consecutive 1-week periods, collects data on
frequently purchased smaller items. The Interview Survey, in which
the expenditures of consumer units are obtained in five interviews
conducted every 3 months, collects expenditures on larger-cost items
and those that occur on a regular basis. The data presented in this
release are based on integrated data from both surveys.
Each component of the survey queries an independent sample of
consumer units which is representative of the U.S. population. Over
the year, about 7,500 consumer units are sampled for the Diary
Survey. The Interview sample is conducted on a rotating panel basis,
with about 7,500 consumer units participating each quarter. The data
are collected on an ongoing basis in 105 areas across the four
regions of the country.
The integrated data from the BLS Diary and Interview Surveys
provide a complete accounting of consumer expenditures and income,
which neither survey component alone is designed to do. Due to
changes in the survey sample frame, metropolitan area data in this
release are not directly comparable to those prior to 1996.
The expenditure data in this release should be interpreted with
care. The expenditures are averages for consumer units with the
specified characteristics, regardless of whether or not a specific
unit incurred an expense for that specific item during the recording
period. The average expenditure may be considerably lower than the
expenditure by those consumer units that purchased the item. This
study is not intended as a comparative cost of living survey as
neither the quantity nor the quality of goods and services has been
held constant among the areas.
The CE significance tests are used in this release to compare
expenditure shares for the 14 major expenditure categories in the
United States to selected metropolitan areas (areas used in this
release are listed below). Expenditure shares for housing and
transportation that are above or below that for the nation after
testing for significance at the 95-percent confidence interval are
identified in charts 1 and 2 for the 24 metropolitan areas surveyed.
NOTE: A value that is statistically different from another does
not necessarily mean that the difference has economic or practical
significance. Statistics significance is concerned with our ability
to make confident statements about a universe based on a sample. It
is entirely possible that a large difference between two values is
not significantly different statistically, while a small difference
is, since both the size and heterogeneity of the sample effect the
relative error of the data being tested.
Metropolitan areas definitions are based on Core-Based
Statistical Areas defined by the U.S. Office of Management and
Budget. The metropolitan areas and their component counties and
cities discussed in the release are:
Chicago-Gary-Kenosha, Ill.-Ind.-Wis.: includes of Cook, De
Kalb, Du Page, Grundy, Kankakee, Kane, Kendall, Lake, McHenry, and
Will Counties in Illinois; Lake and Porter Counties in Indiana; and
Kenosha County in Wisconsin;
Detroit-Ann Arbor-Flint, Mich.: includes Genesee, Lapeer,
Lenawee, Livingston, Macomb, Monroe, Oakland, St. Clair, Washtenaw,
and Wayne Counties;
Cleveland-Akron, Ohio: includes Ashtabula, Cuyahoga, Geauga,
Lake, Lorain, Medina, Portage, and Summit Counties;
Minneapolis-St. Paul, Minn.-Wis.: includes Anoka, Carver,
Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne,
Washington, and Wright Counties in Minnesota; and Pierce and St.
Croix Counties in Wisconsin.
Definitions
Consumer unit -- Members of a household related by blood, marriage,
adoption, or other legal arrangement; a single person living alone or
sharing a household with others but who is financially independent;
or two or more persons living together who share responsibility for
at least 2 out of 3 major types of expenses--food, housing, and other
expenses. The terms household and consumer unit are used
interchangeably for convenience.
Expenditures -- Consist of the transaction costs, including excise
and sales taxes, of goods and services acquired during the interview
or recordkeeping period. Expenditure estimates include expenditures
for gifts, but exclude purchases or portions of purchase directly
assignable to business purposes. Also excluded are periodic credit
or installment payments on goods or services already acquired. The
full cost of each purchase is recorded even though full payment may
not have been made at the date of purchase.
Income before taxes -- The total money earnings and selected money
receipts during the 12 months prior to the interview date.
Table 1. Consumer unit characteristics and percent distribution of
expenditures, U.S. and selected metropolitan areas, Consumer Expenditure
Survey, 2004-2005
----------------------------------------------------------------------------
| United | | | | Mpls.
Item | States |Detroit|Chicago|Cleveland|St.Paul
----------------------------------------------------------------------------
Consumer unit characteristics: |
Income before taxes | $56,693 $66,189 $67,726 $51,602 $78,388
Age of reference person | 48.5 48.7 50.1 50.8 47.1
|
Average number in consumer unit:|
Persons | 2.5 2.7 2.6 2.4 2.3
Children under 18 | .6 .8 .7 .6 .5
Persons 65 and over | .3 .3 .3 .3 .2
Earners | 1.3 1.4 1.4 1.3 1.4
Vehicles | 2.0 2.1 1.8 1.8 2.4
|
Percent homeowner | 68 78 73 74 75
|
Average annual expenditures | $44,928 $51,219 $54,935 $38,476 $58,900
Total (percent): | 100 100 100 100 100
|
Food | 13.0 13.2 11.8 11.8 11.6
|
Alcoholic beverages | 1.0 .7 1.1 1.1 1.3
|
Housing | 32.5 32.2 34.5 34.7 32.8
|
Apparel & services | 4.1 4.4 4.2 3.0 4.2
|
Transportation | 18.0 18.1 16.2 15.8 14.5
|
Health care | 5.8 4.4 5.3 6.8 5.3
|
Entertainment | 5.1 5.1 4.8 5.8 6.2
|
Personal care products & |
services | 1.2 1.1 1.2 1.1 1.2
|
Reading | .3 .3 .3 .4 .3
|
Education | 2.1 2.2 2.7 1.9 2.2
|
Tobacco products & smoking |
supplies | .7 .9 .6 .9 .6
|
Miscellaneous | 1.7 1.7 1.7 2.4 2.0
|
Cash contributions | 3.4 3.0 5.4 2.7 3.9
|
Personal insurance & pensions | 11.1 12.6 10.3 11.6 13.9
-----------------------------------------------------------------------------
Note: Numbers may not add to 100 due to rounding.
Table 2. Average annual expenditures, U.S. and selected metropolitan areas,
Consumer Expenditure Survey, 2004-2005
-----------------------------------------------------------------------------
| United | | | | Mpls.
Item | States |Detroit|Chicago|Cleveland|St.Paul
-----------------------------------------------------------------------------
Average annual expenditures: | $44,928 $51,219 $54,935 $38,476 $58,900
|
Food | 5,855 6,780 6,456 4,526 6,850
Food at home | 3,322 3,965 3,453 2,788 3,567
Cereals and bakery products | 453 545 473 391 493
Meats, poultry, fish and eggs | 822 1,047 815 726 713
Diary products | 374 405 365 320 458
Fruits and vegetables | 556 636 609 455 600
Other food at home | 1,116 1,333 1,192 896 1,303
Food away from home | 2,533 2,815 3,002 1,738 3,282
|
Alcoholic beverages | 442 380 581 435 750
|
Housing | 14,586 16,490 18,962 13,349 19,341
Shelter | 8,448 9,656 11,440 7,560 11,245
Owned dwellings | 5,688 7,389 8,510 5,333 8,463
Rented dwellings | 2,273 1,462 2,138 1,613 1,896
Other lodging | 487 805 792 614 886
Utilities, fuels & public |
services | 3,057 3,511 3,541 3,412 3,070
Household operations | 777 864 1,063 434 1,126
Housekeeping supplies | 603 568 792 570 810
Household furnishings & equip. | 1,701 1,890 2,124 1,373 3,090
|
Apparel & services | 1,851 2,251 2,318 1,156 2,472
|
Transportation | 8,081 9,246 8,875 6,095 8,550
Vehicle purchases (net outlay) | 3,478 2,914 4,013 2,056 3,140
Gasoline & motor oil | 1,806 2,129 1,754 1,449 1,853
Other vehicle expenses | 2,354 3,759 2,464 2,328 2,826
Public transportation | 444 444 644 263 731
|
Health care | 2,625 2,261 2,933 2,600 3,100
|
Entertainment | 2,279 2,619 2,629 2,213 3,656
|
Personal care products & services| 561 568 664 439 700
|
Reading | 128 149 162 147 179
|
Education | 924 1,140 1,456 719 1,296
|
Tobacco products & smoking |
supplies | 303 480 346 364 346
|
Miscellaneous | 751 895 920 926 1,177
|
Cash contributions | 1,535 1,528 2,969 1,027 2,275
|
Personal insurance & pensions | 5,006 6,430 5,665 4,478 8,210
Life & other personal insurance | 386 451 384 294 414
Pensions & Social Security | 4,619 5,979 5,282 4,184 7,796
--------------------------------------------------------------------------------
Chart 1. Expenditures shares spent on housing for 24 metropolitan areas compared to the United States average, 2004-2005
Chart 2. Expenditure shares spent on transportation for 24 metropolitan areas compared to the United States average, 2004-2005
Note: Statistical significance testing at the 95 percent confidence interval.
Last Modified Date: September 4, 2007
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