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FOR IMMEDIATE RELEASE:
Friday, October 5, 2007 |
CONSUMER SPENDING PATTERNS
IN THE CHICAGO METROPOLITAN AREA, 2004-2005
Consumer units 1/ in the Chicago-Gary-Kenosha, Illinois-Indiana-
Wisconsin metropolitan area spent an average of $54,935 per year in
2004-2005 according to the Bureau of Labor Statistics' Consumer
Expenditure Survey. Regional Commissioner Jay A. Mousa noted that this
figure was 22.3 percent higher than the $44,928 expenditure level for a
typical household in the United States. Not only did households in the
Chicago area spend significantly more than the U.S. average, they
allocated their dollars differently for several major expenditure
categories, most notably housing and transportation (See chart A). The
percentage of the budget allocated for housing accounted for a
significantly larger portion of the total in Chicago than it did
nationally, while transportation costs represented a smaller-than-
average portion of overall expenses. Expenditure shares for food,
personal insurance and pensions, and health care were also
significantly below their respective U.S. averages.
_______________________________
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 (CE),
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, 4 geographic regions
of the country, and 24 metropolitan areas. Survey data cannot be used
to make cost of living comparisons between areas. The survey provides
average expenditures for consumer units. 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.
Chicago is the third largest metropolitan area in the United
States, surpassed in employment by only New York and Los Angeles. For
comparative purposes, expenditure shares in Chicago were compared to
these other two metropolitan areas. One other metropolitan area,
Detroit, was also included, as it was geographically close to Chicago
as well as one of the 12 largest areas in the nation.
Housing, the largest expenditure category for a Chicago area
household, accounted for 34.5 percent of total expenditures,
significantly exceeding the 32.5-percent national average. (See chart
1). In Los Angeles (35.7 percent) and New York (37.1 percent),
expenditure shares for housing were also measurably higher than that
for the nation, while Detroit (32.2 percent) was not significantly
different. Often, an above-average expenditure share for housing is a
distinctive feature of large metropolitan areas, and this was true in
the three largest employment centers in the country.
Shelter is the largest component of housing costs, which includes
mortgage interest, property taxes, maintenance and repairs, and rent,
among other items. Expenditure shares for shelter in Chicago accounted
for 60.3 percent of housing costs; nationally, the average was 57.9
percent. (See table A.) The cost of shelter made up 58.6 percent of
Detroit's housing costs, but 65.4 percent of Los Angeles' and 66.1
percent of New York's. Not unexpectedly, at 58 percent each,
homeownership rates in New York and Los Angeles were well below the
national average of 68 percent. In contrast, Chicago (73 percent) and
Detroit (78 percent) showed above-average homeownership rates.
Table A. Percent distribution of housing expenditures, U.S. and
selected metropolitan areas, 2004-2005
---------------------------------------------------------------
Item | United| | | Los | New
| States|Chicago|Detroit|Angeles| York
---------------------------------------------------------------
Total housing | 100.0 100.0 100.0 100.0 100.0
Shelter | 57.9 60.3 58.6 65.4 66.1
Utilities, fuels & |
public services | 21.0 18.7 21.3 14.6 17.6
Household operations | 5.3 5.6 5.2 6.1 4.8
Housekeeping supplies | 4.1 4.2 3.4 3.2 2.9
Household furnishings |
& equip. | 11.7 11.2 11.5 10.6 8.6
---------------------------------------------------------------
At 16.2 percent of the total budget, transportation was the
second largest expenditure category in the Chicago area; this was
significantly below the national average of 18.0 percent. New York
households (14 percent) also spent a smaller-than-average share on
transportation while those in Detroit (18 percent) matched the U.S.
average. Of the four metropolitan areas, only Los Angeles (19.7
percent) had a greater-than-average share for transportation. (See
chart 2.)
Of the $8,875 annual expenditure on transportation in Chicago,
92.7 percent was spent buying and maintaining private vehicles; this
compared to the national average of 94.5 percent. (See table 2 for
detailed expenditure levels.) The remaining 7.3 percent of Chicago
transportation spending was spent on public transit, which includes
fares for taxis, buses, trains, subways, and planes. Nationwide,
households spent 5.5 percent of their transportation budget on public
transit. Expenditure shares for public transit in Los Angeles (5.8
percent) and Detroit (4.8 percent) were close to the national average.
However, at 13.9 percent, New York households allocated a higher
percentage of transportation dollars for public transit compared to the
typical U.S. household. (See table B.) Given the higher expenditure
shares for public transit in both Chicago and New York, it was not
surprising these metropolitan areas averaged fewer vehicles per
household (1.8 in Chicago and 1.4 in New York) than the national
average of 2.0.
Table B. Percent distribution of transportation expenditures,
U.S. and selected metropolitan areas, 2004-2005
---------------------------------------------------------------
Item | United| | | Los | New
| States|Chicago|Detroit|Angeles| York
---------------------------------------------------------------
Total transportation | 100.0 100.0 100.0 100.0 100.0
Vehicle purchases |
(net outlay) | 43.0 45.2 31.5 45.5 30.6
Gasoline and motor oil| 22.4 19.8 23.0 21.1 19.7
Other vehicle expenses| 29.1 27.8 40.7 27.6 35.8
Public transportation | 5.5 7.3 4.8 5.8 13.9
---------------------------------------------------------------
Chicago consumer units spent 11.8 percent of their budget on
food, significantly less than the 13.0-percent national average. New
York (13.5 percent), Detroit (13.2 percent), and Los Angeles (12.7
percent) all had expenditure shares for food that were not
significantly different from that for the nation.
Households in Chicago spent 53.5 percent of their annual food
budget on food prepared at home, joining Los Angeles and New York with
shares significantly lower than the 56.7-percent national average
whereas Detroit households allocated a larger share. (See table 2.)
Chicago households spent 46.5 percent of their total food budget on
food prepared away from home such as restaurant meals, carry-outs,
board at school, and catered affairs, while the average U.S. household
spent 43.3 percent. Of the four metropolitan areas, only residents of
Detroit (41.5 percent) spent a smaller portion of their total food
dollars on "eating out".
Payments for personal insurance and pensions accounted for 10.3
percent of a typical household budget in both Chicago and Los Angeles,
measurably lower than the 11.1 percent expenditure share spent
nationally. Households in Detroit exceeded the national average with
12.6 percent of their budget spent on this item, while those in New
York had a share, 11.2 percent, that was not significantly different.
Out-of-pocket health care expenses, which include health
insurance premiums, medical services, drugs (prescription and
nonprescription), and medical care supplies, accounted for 5.3 percent
of total household expenditures in Chicago, significantly below the 5.8-
percent national average. New York (4.5 percent), Detroit (4.4
percent), and Los Angeles (4.1 percent) also had measurably lower
expenditure shares for health care.
Chicago area households spent 4.8 percent of their budget on
entertainment, similar to the 5.1-percent share allocated nationally.
Expenditure shares for entertainment were also not significantly
different from the national average in Los Angeles (4.9 percent) and
Detroit (5.1 percent). In New York, households spent a significantly
smaller share of their budget on entertainment (4.3 percent) compared
to the national norm.
Consumer units in Chicago spent 4.2 percent of their budgets on
apparel and related services, not measurably different from the U.S.
average of 4.1 percent. Similar spending shares also were found in
Detroit (4.4 percent) and Los Angeles (4.3 percent). A typical New
York household had a higher-than-average expenditure share for clothing
at 5.3 percent.
Cash contributions accounted for 5.4 percent of a consumer unit's
spending in Chicago, above the national average of 3.4 percent. Cash
contributions in New York and Los Angeles were below the U.S. average
at 2.2 percent and 2.3 percent, respectively. Detroit was close to the
national average with a cash contribution share of 3.0 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 | | | Los |
Item | States |Chicago|Detroit|Angeles|New York
--------------------------------------------------------------------------
Consumer unit characteristics: |
|
Income before taxes | $56,593 $67,726 $66,189 $65,810 $74,851
Age of reference person | 48.5 50.1 48.7 46.9 50.6
|
Average number in consumer unit:|
Persons | 2.5 2.6 2.7 2.9 2.6
Children under 18 | .6 .7 .8 .8 .6
65 and over | .3 .3 .3 .3 .3
Earners | 1.3 1.4 1.4 1.5 1.4
Vehicles | 2.0 1.8 2.1 1.9 1.4
|
Percent homeowner | 68 73 78 58 58
|
Average annual expenditures | $44,928 $54,935 $51,219 $55,760 $54,121
Total (percent): | 100.0 100.0 100.0 100.0 100.0
|
Food | 13.0 11.8 13.2 12.7 13.5
|
Alcoholic beverages | 1.0 1.1 .7 .9 1.0
|
Housing | 32.5 34.5 32.2 35.7 37.1
|
Apparel & services | 4.1 4.2 4.4 4.3 5.3
|
Transportation | 18.0 16.2 18.1 19.7 14.0
|
Health care | 5.8 5.3 4.4 4.1 4.5
|
Entertainment | 5.1 4.8 5.1 4.9 4.3
|
Personal care products & |
services | 1.2 1.2 1.1 1.4 1.3
|
Reading | .3 .3 .3 .3 .3
|
Education | 2.1 2.7 2.2 1.7 3.0
|
Tobacco products & smoking |
supplies | .7 .6 .9 .3 .5
|
Miscellaneous | 1.7 1.7 1.7 1.5 2.0
|
Cash contributions | 3.4 5.4 3.0 2.3 2.2
|
Personal insurance & pensions | 11.1 10.3 12.6 10.3 11.2
--------------------------------------------------------------------------
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 | | | Los |
Item | States |Chicago|Detroit|Angeles|New York
--------------------------------------------------------------------------
Average annual expenditures: | $44,928 $54,935 $51,219 $55,760 $54,121
|
Food | 5,855 6,456 6,780 7,062 7,283
Food at home | 3,322 3,453 3,965 3,876 4,014
Cereals and bakery products | 453 473 545 492 568
Meats, poultry, fish and eggs | 822 815 1,047 976 1,109
Dairy products | 374 365 405 411 462
Fruits and vegetables | 556 609 635 749 766
Other food at home | 1,116 1,192 1,333 1,248 1,111
Food away from home | 2,533 3,002 2,815 3,185 3,269
|
Alcoholic beverages | 442 581 380 485 553
|
Housing | 14,586 18,962 16,490 19,911 20,065
Shelter | 8,448 11,440 9,656 13,030 13,271
Owned dwellings | 5,688 8,510 7,389 8,122 8,277
Rented dwellings | 2,273 2,138 1,462 4,383 4,245
Other lodging | 487 792 805 524 749
Utilities, fuels & public |
services | 3,057 3,541 3,511 2,908 3,528
Household operations | 777 1,063 864 1,224 957
Housekeeping supplies | 603 792 568 632 579
Household furnishings & equip. | 1,701 2,124 1,890 2,119 1,730
|
Apparel & services | 1,851 2,318 2,251 2,386 2,858
|
Transportation | 8,081 8,875 9,246 10,972 7,581
Vehicle purchases (net outlay) | 3,478 4,013 2,914 4,996 2,316
Gasoline & motor oil | 1,806 1,754 2,129 2,312 1,495
Other vehicle expenses | 2,354 2,464 3,759 3,029 2,716
Public transportation | 444 644 444 635 1,054
|
Health care | 2,625 2,933 2,261 2,275 2,412
|
Entertainment | 2,279 2,629 2,619 2,719 2,330
|
Personal care products & |
services | 561 664 568 798 687
|
Reading | 128 162 149 158 144
|
Education | 924 1,456 1,140 960 1,643
|
Tobacco products & smoking |
supplies | 303 346 480 179 265
|
Miscellaneous | 751 920 895 848 1,064
|
Cash contributions | 1,535 2,969 1,528 1,272 1,168
|
Personal insurance & pensions | 5,006 5,665 6,430 5,736 6,068
Life & other personal insurance| 386 384 451 298 422
Pensions & Social Security | 4,619 5,282 5,979 5,438 5,646
--------------------------------------------------------------------------------
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: October 5, 2007
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