Consumer Expenditures for the Philadelphia Area: 2008–09 (PDF)

Consumer units,¹in the Philadelphia-Wilmington-Atlantic City, Pa.-Del.-N.J.-Md. metropolitan area spent an average of $56,790 per year in 2008–2009, the U.S. Bureau of Labor Statistics reported today. Sheila Watkins, the Bureau’s regional commissioner, noted that this figure was 14 percent higher than the $49,778 average expenditure level for a typical household in the United States. Not only did households in the Philadelphia area spend more than the U.S. average, they also allocated their dollars differently among the major categories, varying significantly in five of the eight. For example, expenditures for housing, which comprised 37.2 percent of a typical household’s budget in the Philadelphia area, were significantly larger than the nationwide average of 34.2 percent. (See chart 1.)

 Chart 1. Percent distribution of average annual expenditures for the eight major categories in the United States and Philadelphia metropolitan area, 2008–09

Housing in the Philadelphia metropolitan area averaged $21,135 annually and was the largest expenditure category. (See tables 1 and 2.) . Overall, 10 of the 18 published metropolitan areas had expenditure shares for housing measurably above the U.S. average; only Houston had a lower-than-average share. (See chart 2.) Housing expenditures ranged from 41.3 percent in San Diego to 31.9 percent in Houston among the 18 areas. (See table 3.)

The majority of housing expenditures in Philadelphia went toward shelter, 64.3 percent, which includes mortgage interest, property taxes, repairs, and rent, among other items; nationwide, 59.6 percent of the housing budget was allocated for shelter. (See table A.) Utilities, fuels, and public services expenses accounted for 21.0 percent of the housing budget locally; nationally, it made up 21.5 percent. The rate of homeownership in Philadelphia was 69 percent, compared to the 66-percent U.S. average.

At 14.4 percent of the total budget, transportation was the second-largest expenditure category in the Philadelphia area; this was significantly lower than the national average of 16.3 percent. Among the 18 metropolitan areas nationwide, only Detroit had an above-average transportation share at 19.2 percent. (See chart 3.)

Of the $8,202 in annual expenditures for transportation in Philadelphia, 90.6 percent was spent buying and maintaining private vehicles; this compared to the national average of 93.9 percent. The remaining 9.4 percent of a Philadelphia household’s transportation budget was spent on public transit, which includes fares for taxis, buses, trains, and planes; this allocation was above the 6.1-percent average for the nation. (See table B.) The average number of vehicles per household in Philadelphia (1.7) was lower than the national average (2.0).

The portion of a Philadelphia consumer unit’s budget spent on food, 11.4 percent, was significantly less than the 12.9-percent U.S. average. In addition to Philadelphia, six other metropolitan areas had food expenditure shares that were measurably smaller than the nationwide average; Boston was the only area with an expenditure share for food (13.8 percent) significantly above that for the nation.

Households in Philadelphia spent $3,805, or 58.9 percent, of their food dollars on food prepared at home and the remaining 41.1 percent on food prepared away from home, such as restaurant meals, carry-out, board at school, and catered affairs. In comparison, the typical U.S. household spent 58.5 percent of its food budget on food prepared at home and 41.5 percent on food prepared away from home.

As noted, Philadelphia is 1 of 18 metropolitan areas nationwide for which Consumer Expenditure Survey (CE) data is available. We encourage users interested in learning more about the CE to contact the Mid-Atlantic Information Office at (215) 597-3282. Metropolitan area CE data and that for the four geographical regions and the United States are available on our Web site at www.bls.gov/ro3/ .

Additional Information

Data contained in this report 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 CE data were averaged over a two-year period, 2008 and 2009 and are available for the nation, the 4 geographic regions of the country, and 18 metropolitan areas. The metropolitan area discussed in this release is

Philadelphia-Wilmington-Atlantic City, Pa.-Del.-N.J.-Md., which includes Bucks, Chester, Delaware, Montgomery and Philadelphia Counties in Pennsylvania; Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester and Salem Counties in New Jersey; New Castle County in Delaware; and Cecil County in Maryland.

The survey consists of two components, a diary or recordkeeping survey, and an interview survey. 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.

A consumer unit is defined as 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.

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 areas. Differences may result from variations in demographic characteristics such as consumer unit size, age, preferences, income levels, 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. Users should also keep in mind that prices for many goods and services have risen since the survey was conducted.

The CE significance tests in this release compare expenditure shares for selected expenditure categories in the United States to expenditure shares in selected metropolitan areas. (See table 3.) 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 also identified in charts 1 and 2 for the 18 metropolitan areas surveyed. Sample sizes for the metropolitan areas are much smaller than for the nation, so the U.S. estimates and year-to-year changes are more reliable than those for the metropolitan areas.

NOTE:  A value that is statistically different from another does not necessarily mean that the difference has economic or practical significance. Statistical 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 affect the relative error of the data being tested.