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March 1998, Vol. 121, No. 3
Geoffrey D. Paulin
The U.S. Hispanic population has increased rapidly in recent years, rising from 6 percent of the population in 1980 to 10 percent in 1995. Projections from the Bureau of the Census indicate that the trend will continue for the next several years, with even their "lowest series" projecting that Hispanics will account for 11 percent of the population in 2000 and 12 percent in 2005.1 With this growth, consumer spending among Hispanics has become an increasingly important segment of the economy. Data from the Consumer Expenditure Interview Survey (henceforth, "Interview survey") show that Hispanics accounted for less than 5 percent of total consumer spending in 1989 and more than 6 percent in 1994. Given the Census projections, the Hispanic share of spending should continue to increase in the coming years.
The term "Hispanic" encompasses persons from many different cultural backgrounds. According to the Interview survey, Hispanics in the United States come from a wide range of geographic areas: Mexico (62 percent), Central or South America (14 percent), Puerto Rico (12 percent), Cuba (5 percent), other areas (8 percent). Given this variety, cultural differences may exist within the larger group that are worth exploring. Such inquiry would be particularly important to those attempting to understand spending patterns in local communities. For example, if the local Hispanic population comprises largely Cuban-Americans and they have different spending patterns than Mexican-Americans (who make up the majority of Hispanics nationwide), then applying the overall Hispanic average to the local community may not provide the insight required to understand local conditions.
This study has two purposes. The first is to examine spending patterns of Hispanics and other groups. Does ethnicity play an important role in expenditure decisions, or are factors such as income, age, and family size dominant? To answer this question, Hispanics are compared with non-Hispanic whites and non-Hispanic blacks. The second purpose is to explore spending patterns within the Hispanic community to see if there are major differences by geographic origin. For each purpose, Interview survey data are analyzed in three ways. First, general demographic characteristics (such as age, income, and family size) are compared. Second, expenditure levels and budget allocation (expenditure shares) are examined. Third, regressions are used to study how characteristics are related to expenditures for each of the groups of interest.
This excerpt is from an article published in the March 1998 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 Statistical Abstract of the United States: 1996 (Bureau of the Census, 1996), table 19.
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