Budget Allocation Patterns of U.S. Households across Income Levels in the 21st Century

This study examined the budget allocation patterns of U.S. households during the period 2000–2015. Four household groups—classified based on their income levels in relation to the federal poverty level—are used for the analyses. Data from the quarterly interview component of the BLS Consumer Expendi...

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Bibliographic Details
Published inThe Journal of consumer affairs Vol. 54; no. 1; pp. 342 - 387
Main Authors Boonsaeng, Tullaya, Carpio, Carlos E.
Format Journal Article
LanguageEnglish
Published Malden, USA Wiley Periodicals, Inc 01.03.2020
Blackwell Publishing Ltd
Subjects
21st century
Allocation
Budgeting
Clothing industry
Consumer Economics
Consumers
Durable goods
Expenditures
Food
Households
Medical Services
Poverty
Resource Allocation
Textile industry
Transportation
United States > US
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Summary:This study examined the budget allocation patterns of U.S. households during the period 2000–2015. Four household groups—classified based on their income levels in relation to the federal poverty level—are used for the analyses. Data from the quarterly interview component of the BLS Consumer Expenditure Survey were used in order to calculate households' annual expenditures in eight commodity groups: food, utilities, apparel and apparel services, transportation, medical care, shelter and household operations, other nondurable expenditures and services, and durable goods. An exact affine stone index (EASI) demand system was used to estimate demand relationships (i.e., price, income elasticities, and marginal effects). Overall, we find that budget allocation, consumers' responses to changes in prices and income, and the effects of sociodemographic characteristics on spending can be markedly different between income groups. The use of a representative or average household for demand analyses can mask substantial differences in economic behaviors between these four income groups.
ISSN:0022-0078
1745-6606
DOI:10.1111/joca.12273