Family Economics Review [1988, Volume 1, Number 2]

              Editor
Joan C. Courtless
Managing Editor
Sherry Lowe
Editorial Assistant
Francena A. Phillips
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~
Economics
Review
1988 No. 2
Contents:
Consumer Spending and Saving: The Outlook for 1988
Colien Hefferan and Joyce Matthews Pitts
Recent Trends in Clothing and Textiles
Joan C. Courtless
Consumer Reactions to Price Savings on Food
Jane Kolodinsky
Nationwide Food Consumption Survey 1987
Mary Y. Hama and Howard A. Riddick
Abstracts
Regional Per Capita Personal Income
Husbands in the Labor Market
Hispanic Population in the United States
Recent Reports on Housing
NCR Research Publication
Regular Features
New Publications
Cost of Food at Home
Updated Estimates of the Cost of Raising a Child
Consumer Prices
Room 442A Hyattsville. Md. 20782. Is sued May 1988
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38
Consumer Spending and
Saving: The Outlook for 19881
By Colien Hefferan and Joyce Matthews Pitts
Economist and Home economist
In the fall of 1987, the United States
entered its sixth year of sustained economic
expansion. Growth in the Gross National
Product (GNP) declined to a 2.5% annual
rate, down from a 4.8% annual rate at the
beginning of the year. However, other
measures such as real final sales and
consumer spending continued strong,
registering 6.2% and 4.8% annual increases,
respectively. 2 Despite these indicators of
economic health, the outlook for 1988 is
clouded by uncertainty resulting from a pre­cipitous
decline in stock prices, uneasiness
with the growing trade and Federal budget
deficits, and the complexity of interna-tional
monetary and exchange relationships.
The outlook is confounded further by
difficulty in forecasting consumer response
to changing economic conditions. Consumer
spending comprises two-thirds of the eco­nomic
activity in the United States; it has
driven much of the economic growth in recent
years. The question for 1988 is whether
consumers can sustain spending levels
sufficient to continue fueling economic
expansion.
This paper reviews the economic conditions
and trends influencing consumer spending and
saving. Spending is determined by both
ability and willingness to buy. Thus,
consumer prices, income and employment, and
access to credit, as well as confidence and
expectations, are reviewed. Saving is deter­mined
by the relationship of current house­hold
needs to resources; returns available
in the market, particularly interest rates;
1 This article is adapted from a paper
presented at the Annual Agricultural Outlook
Conference in December 1987 in Washington,
DC.
2 Estimates of GNP and its components are
published monthly in the Survey of Current
Business, U.S. Department of Commerce,
Bureau of Economic Analysis.
and expectations for the future. The paper,
therefore, includes a brief review of fac­tors
and constraints that influence saving.
Spending
Consumer spending moderated in October
1987 after increasing steadily during the
summer months. Most of the decline is
attributable to flat auto sales as manufac­turers
and dealers discontinued sales incen­tive
programs at the start of the new model
year. However, some components of consumer
spending were inexplicably strong during the
month. Sales of existing homes climbed 3. 2%
during October despite rising mortgage rates
early in the month and the stock market
decline later.
Month-to-month changes in spending may not
accurately reflect underlying trends, how­ever.
Many components of consumer spending
move in response to external conditions,
such as weather. For example, August
expenditures for services moved up sharply,
probably the result of high utility bills
generated by a widespread heat wave. Expen­ditures
for many other items, such as small
household appliances and gifts, children's
clothes and toys, and vacation travel, tend
to vary by season of the year or with
cultural norms.
Despite month-to-month swings in consumer
spending, the long-term trend has been
toward increased spending both in inflation­adjusted
dollars and as a proportion of
income. Between 1981 and 1987, consumption
increased an estimated 2 percentage points
as a share of the total family budget for
those at the lowest and the highest budget
levels. In 1981 families at a low level of
consumption used 79% of their budget for
consumption needs; in 1987 consumption will
claim about 81% of these families' budgets.
For families at a higher level of consump­tion,
the increase between 1981 and 1987 is
estimated to be from 65% to about 67% of the
budget. 3
Increases in consumer spending have been
driven by different commodities during the
past several years. In 1985 and 1986,
For details see Hefferan, Colien, Family
budget guidelines, Family Economics Review
1987(4):1-9.
1988 No.2 Family Economics Review
spending for durable goods spiked upward
reflecting rapid increases in the number of
new households, demand deferred from reces­sion
years early in the decade, and currency
exchange rates that made imported cars and
electronics relatively inexpensive. In 1987
services led increases in consumer spending.
Spending for durable goods is likely to
moderate in 1988, but spending for services
is projected to continue to increase.
Similarly, services are likely to claim an
increasing share of total consumer expendi­tures
through the end of the decade as both
prices and demand rise.
Prices and their rate of change are
primary determinants of consumer spending.
The Consumer Price Index for All Urban
Consumers (CPI-U) rose at an annual rate of
4. 7% in October 1987. 4 After subdued infla­tion
in 1986 (the CPI-U rose only 1. 1%),
some commodities registered sharp upturns
early in 1987. For example, energy prices,
which declined 19.7% in 1986, increased at
an annual rate of 16.7% during the first 6
months of 1987.
Food prices have increased slightly more
rapidly in 1987 than in 1986, led by
increases in prices for red meat and fresh
fruits and vegetables. However, shelter
costs have increased at about the same rate
in 1987 as in 1986, initially led by rising
house prices and later influenced by in­creasing
financing costs. Overall, inflation
across commodities has been relatively even
in 1987 without the wide variation in price .
increases that characterized past years.
This suggests there may be less opportunity
for substitution across price-elastic
products and consequently less price-induced
distortions in consumer spending patterns.
Perhaps because inflation jumped signifi­cantly
in 1987 above its historically low
level in 1986, there is some evidence of
renewed concern that prices may be poised
for a sharp increase in 1988. A prolifera­tion
of special price indices composed of
selected components of the consumer market
basket have found a place in the public
4 Monthly CPI-U data are published in News
and the CPI Detailed Report, U.S. Depart­ment
of Labor, Bureau of Labor Statistics.
Current CPI information is also available
via taped telephone message at 202-523-1239.
2 Family Economics Review 1988 No.2
debate about inflation. These indices
(including a "nuisance index" that prices
items such as movie tickets, fast food
meals, and bus fares) show large increases
in the prices of these highly visible and
frequent purchases. The special indices
typically do not show the total array of
costs faced by consumers, however.
Although inflation remains a concern, con­sensus
forecasts suggest the CPI-U will rise
between 4% and 5% in 1988, about the same
rate of increase as in 1987. Prices of
durF.~.ble goods, led by .Japanese and European
autos and electronics, may rise more rapidly
than the overall index, reflecting the
weakening U.S. dollar. Housing, transporta­tion,
and labor-intensive service costs, on
the other hand, may moderate in 1988 in
response to a general economic slowdown.
Income is the second important influ­ence
on consumer spending. Consumers are
entering 1988 with the benefit of almost
6 years of sustained growth in income. Since
1982 real personal income has increased 14%;
the rate of increase has escalated over the
period. In October 1987 nominal personal in­come
rose 1. 7%, the largest monthly advance
since June 1975. Although much of this
increase was due to a one-time surge in
Government farm subsidy payments, the
long-term pattern of income growth has been
consistent and strong.
The components of personal income have
grown at uneven rates, however. The relative
gains made in the early eighties by older
households and others dependent on Govern­ment
transfer payments have moderated during
the past 2 years. As pressures to reduce the
Federal budget deficit intensify, government
transfer payments are unlikely to increase
in real terms in 1988. Similarly, growth in
income from other nonearned sources such as
proprietor's income and interest income has
slowed relative to growth in earned income
including wages and salaries. Except for
short-term swings caused by cost-of-living
adjustments to Federal retirement and income
support programs and by pay-out schedules
for farm subsidy programs, the trend toward
more rapid growth in earned than nonearned
income is likely to continue through the
remainder of the decade. This indicates that
the income position of households headed by
current wage and salary earners, especially
those with 2 earners, will improve relative
to households with no earners. This will ex­pand
the already wide gap in income between
households headed by earners and those
headed by nonearners.
Data on family income lag that available
on aggregate personal income. Nonetheless,
information on family income for 1986 (the
latest year for which data are available)
supports the trends suggested in the aggre­gate
data. Overall, median family income
grew 4.2% (adjusted for inflation) from 1985
to 1986. Income growth was especially strong
among black and Hispanic married-couple
households, those living in the South, and
farm households. Female-headed households,
on the _other hand, suffered a 2.0% decline
in real income between 1985 and 1986.
Table 1 shows the level of income and the
percent change in real money income from
1985 to 1986 for selected household types.
Growth in employment parallels growth in
income. In October 1987 civilian employment
reached 113.2 million. During the prior 12
Table 1. Comparison of median family money income in 1986 and 1985, by selected
characteristics
---------------
Median family incone
Percent
change in
real money
in cone
Characteristic
All families .......................... .
Race of householder:
White . .•.•..•••.•.•... · · • · • • · · · · • • · · ·
·alack ......................... · · · · · ·
Spanish origin 1
Region:
Northeast .......................... .
Midwest ••••...•.•..•..•.••••••.•...•
South ............................. · ·
West ••••••••••••••••••••••••••••••••
Type of family:
Married-couple family •••••..•••••••••
Wife in paid labor force •••••••••••
Wife not in paid labor force •••••••
Male householder, no wife present •••
Female householder, no husband
present ........................... .
Farm status:
Farm •.........•.......... · · · · · · · · · • •
Nonfarm ............................ .
1986
$29,458
30,807
17,604
19,995
32,160
29,584
26,708
30,965
32,805
38,346
25,803
24,647
13,647
23,326
29,632
1 Persons of Spanish or1gm may be of any race.
2 Not statistically significant at • 05 level.
Constant
dollars
(1986)
$27,735
29,148
16,784
19,024
30,544
27,930
25,077
29,778
31,100
36,431
24,556
22,622
13,660
21,853
27,881
1985
Current
dollars
$28,269
29.713
17,109
19,393
31,132
28,467
25,560
30,351
31,698
37,110
25,029
22,751
13,923
22,273
28,417
-- --- -------
4.2
3.7
2.9
2 3.1
3.3
3.9
4.5
2.0
3.5
3.3
3.1
8.3
-2.0
4.7
4.3
Source: U.S. Department of Commerce, Bureau of the Census, 1987, Money Income of
Households, Families, and Persons in the United States: 1986, Current Population Reports,
Consumer Income, Series P-60, No. 157.
1988 No.2 Family Economics Review 3
'nonths, employment grew by 3 million, with
adult women accounting for 1.5 million;
adult men, 1.4 million; and teenagers,
120,000. Gains in employment were matched by
large increases in the labor force. Thus,
although employment grew, unemployment
remained essentially unchanged, hovering
near 6% throughout 1987. Some segments of
the workforce continue to experience very
high levels of unemployment. In October the
unemployment rate was 17.4% for teenagers;
12.0% for blacks; and 7.9% for operators,
fabricators, and laborers. At the same time,
unemployment was relatively low for other"
groups such as adult males (5 .1%), adult
females (5.2%), and managerial and
professional workers (2.7%).
The average duration of unemployment
declined to 14.3 weeks in October 1987.
Similarly, the likelihood of a household
experiencing unemployment among one or more
of its members sometime during the year de­clined
from one in five early in the decade
to an estimated one in seven in 1987. These
factors influence both the amount of income
and the level of confidence households bring
to spending decisions.
As income and employment have risen, the
number of persons in poverty has declined.
In 1986 (the latest year for which data are
available) the poverty rate was 13.6%, with
32.4 million persons below the poverty line.
Although not significantly different from
the 1985 figure, the number of poor was
significantly below the decade peak of 35.3
million reached in 1983 when the rate was
15.2%. The gap between the poverty status
of children and the elderly, which first
e;nerged in the early eighties, widened in
1986. The poverty rate among those 65 years
of age and older was 12.6%, whereas the rate
for children 18 years and younger was 17 .1%.
For children 6 years and younger, the rate
was even higher, approaching 22%.
The growing incidence of poverty among
children is closely linked to the low (and
in 1986, declining) inco:11e in households
headed by women. As the poverty thresholds
that will determine eligibility for partici­pation
in Federal assistance programs in
1988 rise to reflect 1987 price increases,
more single mothers and their children are
likely to fall below the poverty line. (See
table 2 for the 1987 poverty guidelines.)
Table 2. Federal poverty income guidelines for 1987
Poverty guidelines
Size of
family uni t 1
----------------
1 •••.•...•••••.•.•...•..•...•..
2 ••.•.••.•.•..•.••••••.•......•
3 ••••••••••••••••••••••••••••••
4 ••••.•.••••••.•••••••.•..••..•
5 •••••..•.•••••.•.•.•.•........
6
7 ••......•....•..••••.•.•......
8 .•.••••....••.•.••...•••..••..
Contiguous (48)
States and District
of Colunbia
$5,500
7,400
9,300
11,200
13,100
15,000
16,900
18,800
Alaska
$6,860
9,240
11,620
14,000
16,380
18,760
21,140
23,520
Hawaii
$6,310
8,500
10,690
12,880
15,070
17.260
19,450
21,640
------·----- ----·- ----·---------------
1For family units with more than 8 members, add the following amount for each additional
family member: $1,900 (contiguous States and the District of Columbia); $2,380 (Alaska);
$2,190 (Hawaii).
Source: U.S. Department of Health and Human Services, Social Security Administration,
1987, Social Securi_!y Bulletin 50(10):2.
4 Family Economics Review 1988 No.2
The poverty population changes from year
to year as households experience critical
events with economic consequences-­unemployment,
illness, and divorce, for
example. Households with just one adult
available to work are especially vulnerable
to economic crises. Continued growth in the
number of children living in such households
suggests that childhood poverty may become
more pervasive during the remainder of the
decade.
Credit exerts a strong influence on
consumer spending, particularly for durable
goods, autos, and housing. Consumer and
mortgage credit continued to expand in 1987,
extending a 6-year trend. In August
consumers increased their installment credit
by almost $5 billion, bringing the total
outstanding to just under $600 billion.
Also, consumers hold about $2.8 trillion in
mortgage debt. Although credit spending and
new mortgages slowed somewhat in October
1987, there is little evidence to suggest
borrowing will decline sharply as the
availability and cost of credit improves in
coming months. However, growth in credit is
likely to moderate in 1988 as fewer new
households are formed and as consumer demand
for durables is tempered by rising prices.
The composition of the consumer debt
portfolio also rnay change with growth in
mortgage-backed credit substituting for some
installment credit.
Interest rates paid by consumers declined
during the first 2 quarters of 1987, in­creased
during the third quarter, and began
to decline again in the final quarter. The
average rate for a 48-month new car loan
offered by commercial banks was 10.23% in
May 1987, compared to 11.33% in 1986. By
August 1987 the rate had increased slightly
to 10.37%. Conventional mortgage rates
declined from 9.53% in January 1987 to 9.11%
in April, compared to 10.54% in 1986.
Although mortgage rates began to climb in
May, in recent months they have declined
slightly. This trend is projected to con­tinue
in 1988 with both installment credit
and mortgage rates dropping between 1 I 2 and
1-112 percentage points.
New housing starts, as well as sales of
existing and new houses, respond quickly to
changes in interest rates. For example,
housing starts dipped to a 1.6 million
annual rate in May 1987, down from about 1.8
million in February. Auto sales also move
with interest rates. Sales spiked in August
when auto manufacturers and dealers imple­mented
discounted loan rates; sales slumped
in October when the promotions were
discontinued.
Other types of consumer credit, especially
credit cards, appear to have less influence
on spending levels but significant impacts
on financial management practices. Analyses
of the 1983 and 1986 Surveys of Consumer
Finances sponsored by the Board of Governors
of the Federal Reserve System indicate that
although consumer installment debt, parti­cularly
credit card debt, has expanded sub­stantially,
debt service payments have not
risen commensurate with this growth. 5 This
suggests that consumers may be using credit
cards as a convenient medium for transac­tions,
incurring debt that is reflected in a
high debt-to-income ratio (about 19.7% in
1987) but paying the debt quickly. Debt bur­dens
of families also vary considerably
over time, suggesting credit may be used to
align needs with expected income. The
surveys show that families with heavy debt
burdens may reduce their ratio of payments­to-
income by increasing their income. In
other words, families may meet their needs
during low-income periods by using credit,
which is subsequently paid off when income
rises (demonstrating life-cycle income
management). Finally, the surveys show that
80% of the families holding installment debt
have sufficient financial assets and home
equity to cover their debts.
Confidence is the final critical deter­minant
of consumer spending. Confidence
indices summarize the psychological and
potential behavioral impact of political,
social, and financial events that may influ­ence
consumer choices. The decline in stock
prices that began in late August 1987 and
culminated in the October 19, 1987, stock
_s ___ _
See Avery, Robert B., George E.
Elliehausen, and Arthur B. Kennickell, 1987,
Changes in consumer installment debt:
Evidence from the 1983 and 1986 Surveys of
Consumer Finances, Federal Reserve Bulletin
73(10):761-778.
1988 No.2 Family Economics Review 5
market crash is an event likely to alter
consumer confidence. Spending and other
economic decisions of consumers, regardless
of the direct or immediate consequences
experienced fro·n the actual event, are
likely to respond to changes in confidence.
The Index of Consumer Sentiment, a
reliable precursor of economic activity,
particularly retail sales, plummeted to 82.4
after the October decline in stock prices.6
In September the index registered 93.6, indi­cating
consumers were about 94% as confident
in business and financial conditions then as
in 1966, the base year for the index. The
index ebbed to 54 during the Hl80 recession
7 and reached 99.3 as recently as June 1986.
Confidence is influenced by broad economic
conditions and personal economic circum­stances,
as well as specific events. It is
difficult to predict the course of consumer
confidence for 1988; however, most factors
influencing the economic environment in
early and mid-1987 remain salient today.
Depending on how consumers weigh the range
of factors determining their economic fate,
confidence may quickly rebound in 1988.
Saving
Consumer saving rose to 4. 7% of disposable
personal income in October 1987, up from
3.0% in the previous month. Despite the
increase, saving will average about 3. 2% of
disposable personal income in 1987. This is
6The index is collected as part of the
Survey of Consumer <\ttitudes '"ly the
Institute for Social Research, University of
Michigan.
7 Other indices show similar pictures of
consumer confidence. The industry-supported,
nonprofit Conference Board's
Consumer Confidence Index fell from 116.9 to
110.4 (1986 is the base year) immediately
following the stock market plunge. The
Sindlinger Consumer Confidence Survey showed
a similar decline. The Sindlinger survey,
conducted by a private Pennsylvania-based
research firm, distinguishes attitudes of
stock investors from noninvestors.
Predictably, investors are significantly
less optimistic than noninvestors.
6 Family Economics Review 1988 No.2
a significant decline from the 4. 2 percent
rate registered in 1986 and a precipitous
drop from the 6% to 9% rates through the
early eighties.
Many explanations are proffered for the
decline in saving. Demographic changes,
including the baby boom generation's aging
to the prime spending years and increasing
nwnbers of two-earner families for who.n jobs
may substitute for the financial security
engendered by savings, lead the theories.
Also, consumer saving tends to move in a
counter-cyclical pattern. During periods of
economic expansion, consumers respond by
increasing spending and acquiring debt.
During downturns, consumers retrench, reduc­ing
spending and credit use. The current low
rate of saving may be characteristic of the
sustained economic expansion extending
through the fall of 1987. As economic uncer­tainty
prevails in early 1988, saving is
expected to rebound.
Although consumer wealth declined in
October 1987 from the high levels reached
midyear, overall household net worth
remained strong in 1987. Net worth equaled
about 375% of annual disposable income at
the beginning of 1987, up from about 350% in
1986. The total impact of the decline in
stock values is difficult to estimate. Stock
values, in the form of corporate equity
holdings or pensions, represent about 20% of
household assets. Many assets were quickly
shifted from stock investments to other
instruments. Regardless of how assessed,
household net worth probably did not decline
below the levels registered at the start of
1987. Home equity, savings accounts, and
small businesses and farms continue to
provide the base of household portfolios.
These assets are likely to increase in
relative importance to consumers in 1988.
Some consumers may be surprised to learn
that their portfolio has changed during
1g37, not only in value, but also in
composition. For example, workers holding
pensions that are invested in equities may
find retirement resources diminished. Those
holding balanced mut11al funds and related
instruments, such as managed Individual
Retirement Accounts, may find that they now
hold more bonds than stocks. For many
individuals, investments either declined or
failed to grow at expected rates. This may
further support the "flight to quality" in
consumer saving and investing that was
evident immediately following the stock
decline. Billions of dollars moved from
high-risk equity investments to low-risk,
often insured, savings instruments. Movement
toward secure liquid investments is likely
to continue in 1988.
Interest rates available to consumers were
volatile in 1987. This pattern is projected
to continue in 1988 with rates averaging
about the same as in 1987. The pattern of
returns may reverse, however, with rates
peaking early in 1988 rather than late, as
in 1987.
Outlook for 1988
Growth in consumer spending is projected
to slow in 1988 to about 3%, compared with
almost 5% in 1987. Three factors have been
identified that will contribute to this.
First, income growth, particularly nonearned
income, will slow in 1988, reducing
resources available for consumption. For
example, the stock market decline may reduce
consumer spending from wealth. Assuming a
$900 billion loss in stock values coupled
with a 5% propensity to consume from wealth,
spending will decline about $45 billion.
Second, consumer credit will moderate as
the result of a slowed rate of increase in
new household formations and in response to
tempered demand for durable goods. This will
defer consumption as some consumers may
elect to save in 1988 for future purchases
(of perhaps relatively less expensive goods)
rather than borrow to satisfy current wants
and needs.
Third, confidence is uncertain, suggesting
caution on the part of consumers as they
formulate spending plans. The quantitative
impact of this factor is difficult to
estimate.
Changes in consumer spending are unlikely
to be similar across all types of house­holds.
Linking spending data for different
types of households (as measured in the
Consumer Expenditure Survey) to aggregate
income and consumer confidence patterns
suggests several demographic groups most
likely to alter their spending and saving.
The first group is high-income households
who are most likely to hold equity invest­ments
and therefore most likely to have
experienced a decline in assets in October
1987. Households in the highest income
quintile hold 80% of stock equity. These
households have a relatively low average
propensity to consume; however, the items
they consume out of unearned income may
be discretionary and, therefore, deferred
in 1988. In so far as these high-income
households wield disproportionate spending
clout, changes in their behavior will
significantly influence overall consumer
spending levels.
A second group likely to alter spending
and saving plans in 1988 is households
headed by persons nearing retirement. These
households have relatively high asset
holdings and potential access to unearned
income. They will be faced with the double
concern of moderating levels of Federal
income-support programs and uncertainty over
asset income. Plans for the timing and style
of their retirement may be reassessed in
1988.
Consumers will enter the end of the decade
in an objectively strong economic position,
beneficiaries of sustained growth in income,
moderating prices, and high levels of
assets. Consumer confidence may be battered
by broad concerns, however, resulting in
incl'easing caution manifested by lower
growth in spending and high levels of
saving.
Note: For trends to watch in 1988, see
pp. 8-9.
1988 No.2 Family Economics Review 7
TRENDS TO WATCH IN 1988
Fast Financial Transactions
A new law, the Competitive Equality Banking Act of 1987 (P.L. 100-86), includes a
provision that requires fast check clearing. By September 1, 1988, no more than 2 or 6
business days (for local and nonlocal checks, respectively) may elapse between the day
a check is deposited and the day the funds become available for withdrawal. This will
change to 1 day for local and 4 days for nonlocal checks on September 1, 1990. Also,
there soon may be fast mortgage processing. Lenders have been experimenting with fast
loans for borrowers with excellent credit and large cash reserves. These loans typically
take 10 to 15 days from application to closing. Lenders will check credit histories but
may accept pay stubs and bank deposit statements to verify income, assets, and liabili­ties.
With a very large downpayment, borrowers may not be required to provide income
or employment verification.
Consumer Credit
A bill to set a Federal cap on credit card interest rates seems unlikely to win con­gressional
approval. However, credit card companies may be required to disclose interest
rates, grace periods, and annual fees in advance to card applicants, making it easier
for consumers to compare rates. Congress has also been reviewing open-ended home
equity lines of credit. Additional disclosure and advertising requirements may be estab­lished
for loans that are secured by a borrower's home. In the area of mortgage finance,
the Federal Reserve Board has proposed limiting the extent to which the interest rate of
an adjustable rate mortgage can rise over the life of a loan.
Child Care
Congress is addressing the problem of child care availability and costs. Several bills
recently introduced would provide funding to improve the child care industry as a whole
through higher paid and better educated staff, innovative programming designed for the
needs of the area serviced by a center, and tax breaks for family day care providers.
There is also good news for single parents. A new program that collects delinquent
child support payments from income tax refunds resulted in a record number of
8 Family Economics Review 1988 No.2
payments being received in 1986. A trend towards improved child support payments may
result from a law which mandated States to have uniform support guidelines in place by
October 1, 1987. Also, children should benefit from a bill on parental leave introduced
in Congress early in 1987 requiring companies with more than 50 employees to allow male
and female workers up to 10 weeks of unpaid leave for the care of their children and
other family members o
College Costs
College costs may become easier to manage. Congress is considering legislation that
would exclude income from U.S. savings bonds from an individual's gross income if the
money is being transferred to an educational institution as payment for tuition and
fees. Tuition prepayment plans are being offered by some private colleges and a few
States for their State colleges and universities. These plans allow parents of young
children to pay for college education now, at current tuition levels. Also, it is likely
that more students, encouraged by prospects of close-to-full employment in the future,
will acquire loans to pay for their own education.
Elder Care
Several trends are developing that may benefit the elderly and family members who
care for them. The health insurance industry is working on plans that would make it
easier for the elderly to receive at-home and nursing-home care. Congressional legisla­tion
has also been introduced that would provide long-term home care benefits under the
medicare program and allow elderly persons with mounting nursing-home bills to keep
more of their assets and still receive medicaid assistance. Also, private companies are
beginning to offer employees time off, flexible working hours, and company-sponsored
day care centers for the care of their elderly parents o
Portable Pensions
Congress has passed legislation that will reduce the time from 10 years to 5 years that
workers need to be in a job before their pension is vested. Now legislators are con­sidering
ways to make pensions portable from one job to another throughout an employee's
career. One bill under consideration would require employers to deposit an amount equal
to the current value of a departing employee's current pension value in an IRA-type
account where the money could earn tax-free interest.
1988 No.2 Family Economics Review 9
Recent 'fiends in Clothing and
Textiles1
By Joan C. CourUess
Family economist
Clothing Expenditures and Prices
In 1987 prices for apparel commodities, as
measured by the Conswner Price Index (CPO,
rose 7.3% over 1986 (table 1). This is the
third consecutive year in which the rate of
increase in clothing prices was greater than
that for the overall CPI. Women's dresses
(up 29%) and suits (up 18%) led the increase
in clothing prices; other items registering
increases over 10% include men's shirts,
women's coats and jackets, and women's
separates and sportswear. The CPI was
revised effective with the January 1987
index and reflects changes in consumer
spending patterns that have occurred over
time. Specific apparel groups that have less
weight in the revised index are men's suits,
sports coats, coats, and jackets; and sewing
materials, notions, and luggage.
Annual spending for clothing and shoes in
1987 is estimated at $724 per person accord­ing
to preliminary figures for the first
three quarters of 1987 (table 2, p. 12). This
amount exceeds 1986 spending by $29 per
person; 90% of this increase can be attri­buted
to higher prices and 10% to increased
buying. When the effect of inflation is
removed, the percentage of personal expendi­tures
for clothing and shoes shows a small,
gradual increase since 1982 (indicated by
constant dollars in table 2). In current
dollars, however, this share has remained at
6.0% for the last 5 years. Per capita expen­ditures
for clothing and shoes during this
period has increased by $188; about 65% of
this increase can be attributed to increased
buying on the part of consumers. The large
baby boom cohort (approaching peak earnings
potential) and vast numbers of women in the
1.rhis article is adapted from a paper dis­tributed
at the Annual Agricultural Outlook
Conference in December 1987 in Washington,
DC.
10 Family Economics Review 1988 No.2
labor force2 contribute to this real
increase in clothing purchases.
Trade in Textiles, Apparel, and Footwear
In 1987 the United States recorded its
32d consecutive annual textile and apparel
trade deficit. In 1986 this deficit reached
$16.2 billion, 19% higher than in 1985. The
combined textile and apparel trade deficit
for 1987 will probably exceed this amount;
for the first 8 months of 1987 it was 20%
higher than during the same period in 1986.
The trade deficit for textiles for the
January-August 1987 period was up 8% from
the same period in 1986; the trade deficit
for apparel was 22% higher for the first 8
months of 1987 than during the same period
in 1986. Volume of textile and apparel im­ports
(in square yards equivalent) was up 4%
for the first 8 months of 1987 compared with
the same period in 1986. Most of this in­creased
volume was in cotton goods, up 12%;
wool yardage increased by less than 1%, and
manmade fiber volume was down by 2%. The
following table shows the import share of
the total U.S. apparel market (13):
Year Cotton Wool Manmade
1981 ......... 40.9 39.8 22.9
1982 ......... 38.6 46.8 25.9
1983 ......... 43.0 45.5 28.5
1984 ......... ')0.8 54.6 38.2
1985 ......... 51.0 68.0 42.3
1986 ......... 51.3 60.0 44.1
During the first 6 months of 1987, China
was responsible for 13.5% of textile and
apparel imports and half of the increase
over 1986 levels (_~). The bilateral trade
agreement between the United States and
China _expired in 1987, and intensive nego­tiations
are underway. Bilateral agreements
regarding textile and apparel trade have
been completed with Malaysia, Indonesia, and
Egypt. Other countries whose bilateral
agreements expired in 1987, in addition to
China, include Mexico, Romania, and Costa
Rica (1). Talks were also held with the
~he dollar value of women's apparel com­prises
a 53% share C.!Q_) of the total apparel
market.
U.S.S.R. concerning their exports of cotton
sheeting material at an annual rate of 10
million square yards. An agreement with
Canada, to create a Free Trade Area between
the two countries, would provide for unre­strained
trade with no duties imposed. The
American Textile Manufacturers Institute,
Inc., is cooperating with the Canadian Tex­tile
Institute and U.S. Government agencies
to formulate rules of origin that will pre­vent
transshipments from third countries <..V.
United States duty free. Intended to promote
economic and political stability in the CBI
countries, a duty-free and quota-free access
to the American market would attract private
investors, both U.S. and Asian.
Supplies, Prices, and Consumption of
Fibers
The 1987 mill consumption of total fibers
Legislation has been introduced in
Congress to allow clothing made in Caribbean
Basin Initiative (CBI) countries from fabric
made in the United States to enter the
is estimated at 53.0 pounds per capita. This
includes 15.5 pounds of cotton, 0.6 pound of
wool, and 36.9 pounds of manmade fibers.
Per capita use in 1986 was 50.0 pounds,
including 13.5 pounds of cotton, 0.6 pound
of wool, and 35.9 pounds of manmade fibers.
1
Table 1. Percent change in prices of apparel commodities, December 1986 to September 1987
-------------------------
Group and it an
All items ........................................................ .
Apparel commodities .•.........•......................•.....•...
Men's and boys' •.....•.......•...............................
Men's ••••••••••••••• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Suit, sport coats, coats, and jackets •••••••••••••••••••••
Furnishings and special clothing ••••••••••••••••••••••••••
Shirts ................................ · · · · • • · . • · · • · · · · · • · •
Dungarees, jeans, and trousers •••••••••••••••••••••••••••
Boys' ...................... • • • · • • • • • • • • • • • • • • • • • • • • • • • • • · • •
Women's and girls' ...........................•................
Women's ••••••••••••••••••••••••••••••••••••••••••••••••••••
Coats and jackets ....................................... .
Dresses ............................. · · • • · · · · · · · • · • · · · • · · •
Separates and sportswear •••••••••••••••••••••••••••••••••
Underwear, nightwear, hosiery, and accessories ••••••••••
Suits ................................ · • · · • • • • • • • • • • • · • • · • •
Girls' ...................... • • • • • · · · • · • · • · • • • • • • • • • • • • • · • • · •
Infants' and toddlers' ...•...•......•...•.........••..........
Other apparel commodities ••••••••••••••••••••••••••••••••••••
Sewing materials, notions, and luggage •••••••••••••••••••••
Watches and jewelry ...........•...............•...•........
Footwear •.......•.•.............. • • • • • • • • • • • • • · • • • • · • • • • • • • • •
Men's ••••••••••••••••••••••••••••••••••••••••••••••••••••••
Boys' and girls' •........•...•...•....•......... • • • • • .. • • • • •
\Vomen's ••••••••••••••••••••••••••••• • • • • • • • • • • • • • • • • • • • • • • •
Percent change
(annualized)
------------- ·---
5.5
7.3
3.4
5.8
5.4
1.2
10.9
5.4
-4.4
11.6
H.8
11.6
~9.0
11.4
-0.3
18 .1
6.2
1).5
9.6
0.7
11.6
3.1
1.8
3.3
4.0
1
Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Source: Calculated from the CPI Detailed Report, December 1986 and September 1987, U.S.
Department of Labor, Bureau of Labor Statistics.
1988 No.2 Family Economics Review 11
Cotton. The 1987 U.S. cotton crop is
estimated at 13.9 million bales, 43% higher
than in 1986. Cotton prices have strength­ened
since August 198fi, averaging 64 cents
a pound in October 1987; world prices have
risen similarly over the same period, reach­ing
76 cents a pound in October. Although
textile imports have remained at a record
level3 and prices for manmade fibers have
been competitive with cotton, U.S. mills are
expected to use more cotton in 1987/88 (7 .8
million bales) than at any time since
1971/72. Domestic cotton consumption (mill
consumption plus textile imports) may exceed
22 pounds per capita, a level last reached
in the late sixties. Exports for 1987/88 are
estimated at 7. 2 million bales, giving the
3In 1987 textile imports may amount to
over 40% of total domestic cotton consumption.
United State<; a 30% share of the world
cotton trade, compared with 26% in 1986/87.
In 1986, as in other recent years, most
U.S. cotton textile imports were shipped
from countries that bought little or no U.S.
raw cotton. About 70% of all cotton textile
imports were shipped from countries that
purchased only about 20% of total U.S. raw
cotton exports. Remaining imports came from
countries that purchased no U.S. cotton.
Countries dominating the U.S. cotton textile
import market were Hong Kong, 16%; China,
1fi%; Taiwan, 11%; and Korea, 8%. More than
one-half of all cotton textiles imported
into the United States in 1986 were in the
form of apparel.
Cotton's share of the apparel and home
furnishings market (excluding floor
coverings) for 1986 was 46%, up from 44% in
1985 (!.i). Specific items with market share
increases for cotton include women's
Table 2. Annual expenditures on clothing and shoes 1
Year
Per capita
expendi tures2
Constant
dollars
( 1982)
Current
dollars
Percent of
personal
consunption
expenditures
Constant
dollars
(1982)
Current
dollars
Aggregate
expenditures
Bill ions
of
constant
dollars
(1982)
Billions
of
current
dollars
-------·------------------------·------·---·--
1982
1983
1984
1985
19863 •••••••.••••.
1987 ••••.•..•.•.
536
566
601
619
655
1358
536 6.1
577 6.2
620 6.3
658 6.3
695 6.4
724 6.4
6.1 124.4 124.4
6.0 132.6 135.1
6.0 142.2 146.7
6.0 147.9 157.2
6.0 158.0 167.5
6.0 160.1 176.2
·------------·---------
1 Includes yard goods, but excludes services such as cieaning and repairing clothing and
shoes.
2 Calculated by dividing aggregate expenditures for each year by population figures for July
of each year.
3Preliminary figures--average of estimates for first 3 quarters of 1987 (i.e., seasonally
adjusted quarterly totals at annual rates).
Sources: Calculated from U.S. Department of Commerce, Bureau of the Census, 1987,
Population estimates and projections, Current P_o_£~l_a_t_!Q!_l_~~ort~, Series P-25, and personal
communication; and U.S. Department of Commerce, Bureau of Economic Analysis, 1987, Susvey
of Current Business 67(7):31 (tables 2.2 and 2.3), and personal communication.
12 Family Economics Review 1988 No. Z
sweaters (34% in 1986, compared with 24% in
1985) and women's socks (33% in 1986, up
from 24% in 1985) (_~). Fleece has joined
denim as a perennial cotton favorite.
Wool. Mill consumption of apparel wool
during the first 6 months of 198 7 was 11%
above the 1986 level. U.S. farm prices for
wool averaged 27% above 1986 levels for the
first 7 months of 1987. Imports of raw wool
during the first 6 months of 1987 were 13%
above a year earlier. Wool textile imports
in 1987 are expected to be nearly 10% higher
than the record level in 1985.
The domestic wool knitting industry is
expected to benefi.t from the declining value
of the dollar (which makes foreign wool more
expensive) and the ability to provide a
quick turnaround time to retailers (6 to 8
weeks from order to delivery). Consumer
preference for natural fibers, appreciation
of quality, and the draping characteristics
of wool jersey are increasing the demand for
wool knitted garments.
Mohair. World production of mohair is
estimated at 55.5 million pounds, about 14%
higher than in 1986. U.s. production will
increase by 11% to maintain a 28% share of
the world market. American exports of mohair
are expected to be at the highest level
since 1972 because this year's fiber quality
is superior to South African mohair.
However, world demand for mohair is down
because the depressed European economies
are substituting less expensive manmade
fibers. Also, the brushed look in apparel
has been replaced by a fashion silhouette
that requires softer, finer yarns with
excellent draping capabilities.
Manmade fibers. Shipments of manmade
fibers by U.S. producers during the first
8 months of 1987 were 7% above shipments a
year earlier (_!__!). Rayon is supplanting
nylon tricot as an alternative to cotton for
intimate apparel.
Developments in American Textile, Apparel,
and Footwear Manufacturing
The decline in the value of the dollar has
not improved the American trade position
because most textile, apparel, and shoes are
imported from .<\sian nations with currencies
pegged to the dollar. In an effort to
compete with imports, American manufacturers
have invested heavily in new technologies to
ma"ke their plants more efficient and improve
product quality. In addition, the domestic
industry has found it important to emphasize
marketing and customer services. The Con­gressional
Office of Technology Assessment
(_~) has determined that public policy ac­tion
will be needed in the next few years to
maintain a viable U.S. textile and apparel
industry. Goals of such Federal action could
be (1) to protect domestic industries
against unfair trading practices by foreign
firms, (2) to act to stem the tide of
imports while the U.S. industry works to
rebuild itself, (3) to foster an economic
climate conducive to innovation, and (4) to
help firms retrain workers as production
techniques change.
The U.S. shoe industry is fighting to re­tain
a share of the domestic market. Since
1968 shoe production has declined by 64%,
and over 600 shoe factories have closed. In
1986 over 80% of the shoes purchased by
American consumers were imported. Labor
costs can be contained somewhat and deliv­eries
can be speeded up through com­puterized
production techniques. The shoe
industry is using computer-aided design
(CAD) systems and computerized stitching
machines. Designers create and modify
three-dimensional shoe styles on video
display terminals and then the design is
transferred by computer to a laser-powered
machine that automatically cuts patterns to
desired shoe sizes. Future applications in
computer-aided manufacturing may include
automatic leather-cutting, the use of
robots to attach soles and fit insoles, and
microprocessor-controlled lasting. An
operator will be needed, however, to control
these machines. Another method that speeds
up the manufacturing process and improves
1988 No.2 Family Economics Review 13
quality control is "modular manufacturing,"
whereby the old assembly line procedure is
replaced by a quality circle or module where
a shoe is passed from one worker to the next
in a continuous flow. Workers are trained in
more than one operation and authorized to
make decisions in the absence of their
supervisor.
Developments in Fibers and Fabrics
A wide variety of style and color must be
offered by retailers to satisfy consumer
demand. Garment dyeing is being promoted by
Cotton, Inc., as a way to ensure quick re­sponse
to retailers' needs. "Quick Response"
is becoming an industry-wide slogan as a
means by which domestic manufacturers can
claim an advantage over foreign sources.
Garment dyeing permits tighter inventory
management (fewer closeouts) and closer
color coordination among garment components.
Also, the fabric wasted in cutting is less
expensive because it has not been dyed or
finished (!.).
Cotton, Inc., is participating in research
initiated by the International Institute for
Cotton that seeks to develop a method for
predicting the shrinkage and dimensional
properties of finished, knitted cotton
fabrics (_~_). A new blend of polyester and
cotton with dual denier fiber construction
has 70% more open structure in the yarn.
Called Light Spirit Blend, the open
structure permits air to flow through more
easily, enhancing breathabUity. A second
comfort-producing attribute of this yarn is
the ability to quickly absorb moisture, draw
it away from the skin by means of a patented
process called Hydromax, and move it to the
fabric surface where it evaporates. Fabrics
qualifying for this certification mark will
be available in topweight and bottomweight
goods (!).
A new certification program for Thermax
thermal-wear, two-layer fabrics permits
manufacturers to knit Thermax in combination
with other fibers as long as the layer worn
next to the skin is 100% Thermax. This
allows the Thermax fibers to trap heat
radiated from the body and to wick moisture
away from the skin (!.).
14 Family Economics Review 1988 No.2
Softec Dacron, a patented family of fila­ment
polyester fibers, has yarn properties
that improve on traditional Dacron. These
include softness, a lux1Irious hand, excel­lent
draping qualities, and the ability to
dye and nap more easily (~).
HighTrek is a yarn blenderl of Orlan,
Hollofil, and wool. Sweaters made of
IfighTrek offer the thermal protection of
wool at less cost (~).
A yarn of 75% Orion acrylic and 25% nylon,
with the certification mark "Duralon," has
been developed for use in socks. Socks made
from Duralon are expected to wear twice as
long as those made of Acrilan II, 50% wool
and 50% acrylic, or 100% cotton, in addition
to being very soft (~).
Comfort Fiber polyester, available for
almost 6 years in knitted goods, will be
available in spring '88 woven garments. Re­engineered
and chemically modified, Comfort
Fiber is reputed to be more breathable and
durable than cotton, washable with less
shrinkage than cotton, but priced similarly (8).
USDA Research on Fibers and Fabrics
Chemists at USDA's Southern Regional
Research Center (SRRC) in New Orleans are
continuing their study of temperature­adaptable
fabrics. These fabrics are treated
with polyethylene glycols (PEG's) that can
be chemically attached to most natural and
synthetic fibers. Treated fabrics store and
release heat at various temperatures by the
reversible melting and crystalization of
PEG's. The treatment, named Polytherm, is
being tested to discover how much chemical
is needed to produce a noticeable retention
or release of heat, and how long the thermal
effect lasts in different environments.
Means to increase durability are also being
studied. Polytherm has many potential appli­cations
in apparel, household furnishings,
and building insulation products.
Other work at the S R RC has made it possi­ble
for cotton and other cellulosic fibers
to be treated to accept almost all classes
of dyes, under a wider range of pH condi­tions
than was formerly possible. Untreated
cellulosic fibers do not accept disperse
dyes (used for synthetic fibers) or acid
dyes (used for wool and some synthetic
fibers). Treated fibers can be blended with
wool and polyester, and the fabric dyed with
one dye to produce a uniform shade, or with
two different types of dye to produce a
bicolored fabric (each fiber accepting a
different dye). In addition to reducing the
number of dye steps, this new treatment
makes the fabric more colorfast than one
made with untreated yarns.
Studies to improve the quality of American
wool are being undertaken by ARS scientists
at the Eastern Research Center in Philadel­phia.
Because most U.s. raw wool is a
by-product (sheep are raised primarily for
meat), it receives less care and frequently
contains urine stains, vegetation matter,
and black hairs that must be removed by
the textile mill. Mills are willing to pay a
higher price for Australian wool without
these problems. In 1985, 80 million pounds
of clean wool were imported, up from 27
million pounds in 1974. Domestic production
of clean wool dropped to 46 million pounds
in 1985, from 88 million pounds in 1970.
Current research is directed toward finding
new methods for (1) bleaching pigmented wool
without hurting its quality, which will re­move
the yellow stains of urine; (2) extrac­ting
bits of debris without weakening the
fiber or affecting its hand; and (3) removing
grease, particularly by using compressed
carbon dioxide to separate the grease into
more useful components.
Apparel Consumption and the Outlook for
Retailing
In 1986, consumers, in the aggregate,
purchased 8.4% more items of apparel and
spent 7. 5% more for those items than in
1985. Also, on average, each individual
consumer bought more garments in 1986 than
in 1985. Women's apparel grew at the fastest
rate (11.1% in units, 9.8% in dollars).
Active wear (warmup suits, sweat shirts,
sweat pants, and sweat shorts) increased by
almost 45%, both units and dollars. Total
footwear purchases reached 1. 04 billion
pairs in 1986 (up 6% from 1985), selling for
$18.9 billion dollars (up 5% from 1985).
Women's shoes accounted for one-half of shoe
sales in both unit and dollar volume. Almost
one-third of all men's shoes and over
two-fifths of all footwear purchased for
children were athletic (_!,§_).
Department stores and department chain
stores sold 36% of apparel units and
collected 45% of all the dollars spent on
clothing in 1986. Discounters obtained a
unit market share of 31% but only 17% of the
dollar value. Specialty stores sold only 12%
of all garments but collected a 23% share of
the dollars spent on apparel <..!&).
About 70% of all adults shop at a regional
mall at least once a week. Men make up
one-third of the adult mall shoppers. Adults
average 6 hours shopping per week; teenage
girls spend 4 hours and teenage boys,
2 hours. One survey of 34,300 mall shoppers
determined that only one-fourth had come in
search of a specific item; the others viewed
shopping as a kind of pastime or hobby (!1).
The market for regional malls in the United
States is becoming saturated. New malls need
to feature some unique approach. One of the
largest malls, planned for Minneapolis, will
offer an indoor amusement park with a roller
coaster, water slides, a hotel, and 800
stores and 100 restaurants. Other malls have
no department store anchor but many
specialty and food shops. Also, developers
are returning to the cities. A mall is
planned on the site of a former Gimbels in
Manhattan. This mall will feature 100 stores
on multiple levels, accessible by escala-tors,
with gourmet foods on the top retail
level and offices above (l.Q_).
Retailers are finding it more profitable to
specialize. Department stores will no longer
carry the variety of merchandise lines once
believed necessary. On October 28, 1987,
J .c. Penney Co., Inc., announced a decision
to discontinue selling ho11e electronics,
hard sporting goods, and photographic equip­ment
in all retail stores effective spring
1988, and to make more space available for
women's clothing. Major appliances, sewing
goods, and toys are a few of the other cate­gories
that have disappeared in many depart­ment
stores. Remaining lines are increasingly
segmented, and the successful department
stores will be those that feature ambience
and special boutiques throughout.
J .c. Penney Co., Inc., will offer a home
shopping service called Teleaction. Viewers
tune in the appropriate cable channel, dial
1988 No.2 Family Economics Revie·o'l 15
a local phone number, enter a personal iden­tification
number, select the category of
products (by using telephone push buttons),
and then place the order. In addition to
goods from Penney's, items will be sold by
Marshall Field & Co., Spiegel Inc.,
Abercrombie and Fitch, and American
Airlines. Sears, Roebuck & Co. is another
major retailer with plans to offer products
for sale via cable television. QVC network
has exclusive rights at this time to present
selected Sears products (including many not
offered in Sears stores or ca talogs) to 26
major cable systems.
Video kiosks are expected to handle sales
worth $350 million by 1990 (_;!_). To place an
order, the customer slides a credit card
into a slot on the machine, presses a series
of keys to call up pictures of the merchan­dise
and another series to make a s election,
enters the address to whic11 the order should
be delivered, and picks up a receipt. In
several hundred Florsheirn stores, a video
kiosk insures than none of the 300 styles of
shoes is ever out of stock in any size or
color (15). If the store doesn't have the
exact style, color, and size needed by the
customer, interactive video makes it
possible to have the shoes delivered to the
customer's horne within a week. Sears,
Roebuck & Co. is another retailer selling by
means of interactive video. Window treat­ments
(11,000 types and sizes of curtains,
blinds, and shutters) too numerous for any
store to stock can be ordered in this manner
in selected test markets (15).
REFERENCES
1.
2.
3.
American Textile Manufacturers Insti­tute,
Inc., Economic Information Divi­sion.
1987. r£..~:1£!_i!.~_Hi-Lights. June issue.
- - - -----· 1987. T~xtile l_ii-~ights.
September issue.
~~l_!~umer Reports. 1987. New-age
shopping: The video kiosk. October
issue.
4. DiGate, Lisa. 1987. E.I. duPont de
Nemours & Co. Inc. [Personal
communication on October 15.]
5. Gross, David. 1986. Cotton showing
increasing strength among domestic
knitters, consumers. _!S_!?.i_tting -~!Pes
55(12) :13-16.
16 Family Economics Review 1988 No.2
6. Kni_!.!!ll_g__:!_l_mes. 1987. Vol . 56, No. 1,
p. 56.
7. --------. 1987. Vol. 56, No. 3,
PP• 23-24, 66.
8. ---- ---·- . 1987. Vol. 56, No. 4,
PP• 59-66, 70. 9. ------. 1987. Vol. 56, No. 9, P• 38.
10. Lowenstein, Roger. 1987. Regional-mall
developers try new tactics as market
shrinks. !_ll_e __ ~~ll Str~L-!.<2-~rnal,
September 2 issue.
11. Morris, Betsy. 1987. As a favored
pastime, shopping ranks high with mos t
Americans. The \~~lL~!!:~et _lQurnal,
July 30 issue.
12. Pyatt, Rudolph A., Jr. 1987. Textile
market erodes. Th~-_!Y_~~hingtor:! _ ~S?.§!,
April 24 issue.
13, Tex!_i!~Q_!'_g_!l_!IOn. 1987. Vol. 58, No. 4,
p. 7 3.
14. • 1987. Vol. 58, No.9,
pp. 207, 226.
15. Therrien, Lois. 1987. Birth of a sales­man:
How video is revving up retailing.
!!usin~_§§ __!Veek, September 7 issue.
16. Tugman, John. 1987. Apparel 1986: The
state of the market. MR_~~S_oj_!__9_~~<!~
!_T!_formatio'L_~~r:_~i__c_e_ _R ep2_rts. April
issue.
17. U.S. Depart.nent of Agriculture, Agricul­tural
Research Service. 1987. Making
fabric more colorful. :~ricul_!ural
Research 35(2):16.
18. ------· 1987. Cleaning wool's
rep uta tio n • A g r_is;~_!!_u ra"!___l!_~~ ~~!'-c h
35(4): 10-11.
19.
20.
21.
• 1987. Smart fabrics watch
the temperature. Agric~ltt!_!:_~"!__ _l!_~~eaz:ch
35(4):14-15.
______ , Economic Research Service.
1987. Cotton and Wool Situation and
Outloo~_R.:_eport. CWS-48.
!_ig_!l_~nd Out_!2_<2_~_}'_e__!l_!E_90k. CWS-49; and
personal communication with John Lawler.
Consumer Reactions to Price
Savings on Food 1
'3y Jane Kolodinsky
Assistant professor
The University of Vermont
Obtaining low prices for groceries
continues to be mentioned by over 90% of all
consumers as the major reason for choosing
their supermarket (_1_Q). There is great
potential in the market today for consumers
to save on their food bills. Savings can be
obtained on groceries through the use of
coupons distributed by retail outlets and
manufacturers, by taking ar:lvantage of sales,
and hy comparison shopping. Expenditures on
food away from home may also be affected by
savings on groceries. This study examines
how expenditures on grocery items and food
away from home are affected by perceptions
of savings available on grocery items in
dual-earner households.
Dual-earner households currently repre­sent
a large and expanding segment of the
U.S. population. In the last 20 years this
segment has grown from 37% to 45% of the
population. In adciition, dual earners have
a high level of disposable income compared
with other households. In constant 1986
dollars, disposable income for this group
has increased from $23,099 in 1966 to
$36,717 in 1986 (_!.;!_). When two adults are
employed in the labor market, increased
demands are likely to be placed on the time
they have available for household activi­ties,
including grocery shopping. Moreover,
increases in income permit a wider selection
of goods and services from which to choose
and purchase.
Given the increased time demands and
relatively high incomes of dual-earner
households, this group would not be expected
to react strongly to price savings on food
items. Any one food item in a grocery basket
represents a small percentage of the total
l.rhis article is condensed from a paper
presented at the Annual !\gricultural Outlook
Conference in December 1987 in Washington,
DC.
z
share of income spent on food. Despite
expectations, it appears that dual earners
do react to savings available on food. Kaitz
(J_) found that 52% of employed women checked
the food ads and 22% shopped at more than
one store. These figures were obtained
during a period of high inflation for food
items. Between 1977 and 1879, food prices
increased an average of 10% per year. In
dual-earner households sampled by the author
in 1986, 95% of shoppers reported reading
food ads, 92% clipped coupons, and 39%
shopped at more than one store. These tech­niques
were used to save money on grocery
bills even though food prices had increased
an average of only 3% per year since 1984.
Saving on the family food bill appears to be
becoming more popular despite low inflation
for food items.
CONCEPTUAL FRAMEWORK AND DATA
One way to examine the effect of price
changes on consumer behavior is to observe
the reaction of consumer expenditures to
changes in savings. In this study consu'Tler
price information search and expenditures on
food goods are modeled in a framework that
combines household production theory and the
economics of information (4, 9). In house­hold
production theory, t~e ~nd goods are
combined to produce commodities that yield
satisfaction. For example, meals are pro­duced
using time and food inputs. The
completed meal produces satisfaction, not
the food purchased at the superwarket. Price
information is included as a home-produced
gooci, using time inputs and purchased in­puts,
such as newspapers and transportation
costs necessary to locate lower prices.
In cross-section analysis, prices are
usually assumed to be constant. However,
because price dispersion exists during a
single time period, cross-section data can
be used for estimation. The data used in
this study were collected during summer 1986
__2 _ __
All food purchases represent about 14.7%
of disposable income for the general
population <.!l) .
1988 No.2 Family Economics Review 17
from a sample drawn from 0 nondaga County,
NY. A telephone survey, followed up by a
mail survey, yielded 95 completed question­naires.
All the households consisted of two
adult part- or full-time workers, with or
without children. A comparison of the sample
with the general population of dual earners
revealed no significant differences in mean
incomes or number of children, although the
sample over-represented persons with pro­fessional
occupations and college educations
(]:1). This is not unusual in survey
research, especially when time and money
constraints prohibit recontacting nonrespon­dents
more than three times. Considering
only the dual-earner population, certain
inferences can be made regarding this
particular market segment. The table below
presents summary statistics.
Summary statistics of the Onondaga County, NY, dual-earner sample
Variable Mean Standard
deviation
------------ ------------------
Annual family income ..................•...................
Weekly nonwage income (includes salary of nonshopper) ••••
Perceived dollar savings on weekly dairy groceries ••••••••
Actual dollar savings on weekly dairy groceries •••••••••••
Perceived dollar savings on weekly nondairy
convenience groceries .•.•••.••••••...•..•.•.••.•••.......
Actual dollar savings on weekly nondairy
convenience groceries ................................... .
Weekly expenditures on dairy fast-food away from home
(purchased at restaurants, cafeterias, etc., that do
not offer table service .................................. .
Weekly expenditures on dairy full-service food away
from home (table service is offered) ••••••••••••••••••••••
Weekly expenditures on nondairy food a way from home •••••
Weekly expenditures on nondairy convenience foods ••••••••
Weekly expenditures on dairy groceries ••••••••••••••••••••
Price of search time ...................................... .
Percentage of shoppers who have completed college 1
•••••••
Percentage of shoppers holding a professional or
administrative position 1 ••••••••••••••••••••••••••••••••••
Weekly number of hours spent by major shopper
searching for lower prices ................................ .
Age of major shopper (years) ••••••••••••••••••••••••••••••
Number of children 12 years and over living in household ••
Number of children under the age of 12 years living
in household . ............................................ .
$40,359.40
460.43
.1)3
.66
4.11
3.10
4.42
4.87
11.55
24.58
5.88
5.79
44
52
2.33
37 0 7 4
.64
0 73
$14,175.52
225.81
.42
.98
2.76
2.39
6.02
9.09
12.80
12.18
4.33
4.76
4.19
9.47
.93
.92
1For variables measured as dummy variables, the proportion of the sample satisfying the
specified condition is presented instead of the mean value.
18 Family Economics Review 1988 No.2
EMPIRICAL FRAMEWORK AND RESULTS
Equations were estimated for the share of
full food income 3 spent on dairy groceries,
nondairy convenience groceries, 4 dairy fast
food away from home, dairy full-service food
away from home, nondairy food away from
home, and price information search. Expen­diture
shares were estimated as a function
of wage rate, perceived savings, nonwage
income, number of young and older children,
whether a person ate food away from home
for social or business reasons, whether the
major shopper in a household completed
college, a measure of the quality of conve­nience
food items, and a measure of the
enjoyment a shopper obtains from search
time.
The effects on share of full income spent
for food were determined from savins:rs on 0
dairy and nondairy groceries and changes in
the price of search time (since consumers
"produce" savings via price information
search). 5 Because some respondents reported
zero expenditures on dairy groceries and
food away from home, these equations were
estimated using the Tobit maximum likelihood
technique, which corrects for bias created
when using censored samples (~_). Ordinary
least squares was used for estimation of
nondairy convenience groceries and search
time equations because all respondents re­ported
positive expenditures. Coefficients
on variables in expenditure share equations
3 Full food income consists of the value
of all time and purchased inputs used in
food price information search and meal
preparation.
4 Nondairy convenience foods consist of
frozen and canned fruits and vegetables;
dry mixes; prepared soups and sauces; cold
and instant cereals; bakery products; meats
already boned, skinned, canned, or cooked;
and frozen dinners and entrees.
5 In the model estimated, the price of
search time is not equal to the market wage
but equals the wage rate minus marginal
savings available in the market. The estima­ted
coefficients allow the effect of the
price of search time to be examined sepa­rately
from the effect of a change in the
price of other uses of time, measured by the
wage rate.
were transformed into marginal changes in
expenditures and then used to calculate
savings and price of search time elasticities.
Six significant results were found for
consumers who had positive expenditures on
dairy groceries and nondairy convenience
groceries during the survey week:
1. A 10% increase in perception of savings
on dairy foods leads to a 2.8% decrease
in expenditures on dairy foods. It appears
that consumers actually save money on their
dairy food expenditures when perceptions of
savings for dairy foods increase. They do
not overcompensate for increases in per­ceived
savings by increasing the quantities
purchased by more than the savings
available.
2. A 10% increase in perceptions of
savings on nondairy convenience foods leads
to a 2.8% increase in expenditures for
dairy foods. Consumers apparently utilize
"income" generated through the production of
savings on nondairy convenience foods to
increase expenditures on dairy foods. This
is good news for the dairy industry, which
is trying to persuade consumers to increase
consumption of dairy foods. It is potentially
good news for consumers who are interested
in the nutrition provided by dairy foods as
compared with other convenience foods.
3. A 10% increase in perceptions of
savings on nondairy convenience foods leads
to a 1.8% decrease in expenditures for
dairy fast food away from home. Consumers
may be substituting food at home for dairy
fast food away from home as the price of
nondairy convenience food becomes relatively
cheaper because of available savings. Thus,
the total time and monetary cost of pro­ducing
meals at home using convenience items
may become a more desirable alternative than
eating fast food away from home to save
time.
4. A 10% increase in the price of search
time leads to a 0.9% increase expenditures
for dairy foods.
5. A 10% increase in the price of search
time leads to a 2.4% increase in expenditures
for nondairy convenience foods.
6. A 10% increase in the price of search
time leads to a 1. 7% increase in expenditures
for dairy fast food away from home.
1988 No.~ Family Economics Review 19
The last three results indicate that as
the price of search time increases, so do
certain expenditures. As the price of search
time increases, the demand for search time
should decrease. Consumers who spend less
time in price information search may pay
higher prices. In addition, as the price of
search time increases, the price of other
time uses may increase as well. Consumers
may increase the use of dairy foods, non­dairy
convenience foods, and fast food away
from home to save time in meal preparation.
OUTLOOK
The general outlook for consumers wishing
to save money on their food bills is opti­mistic.
As long as consumers continue to
engage in price information search, we are
likely to see an inelastic decrease in food
expenditures as a response to increases in
savings. In addition, if one can infer that
increases in price information search have
taken place since 1978 (by comparing Kaitz'
results (J_) with those of the present study),
there is evidence that price information
search may increase even if all other fac­tors
remain constant. Reactions of consumers
to price savings, however, will depend on
general economic conditions, the actions of
food manufacturers and retailers, and
consumer sentiment.
The October 1987 Survey of Consumer
Sentiment indicated that consumers are less
optimistic about the economy (_§). Surveys .
conducted by Advertising Age (.!_, _!) during
the weeks of October 19 and October 27,
1987, indicated that about 25% of consumers
expect to decrease spending on groceries and
close to 33% expect to decrease spending on
food away from home in the near future.
However, as of November 3, 1987, these
figures had fallen to 12% and 16%, respec­tively
(!). It is likely, given the above
indicators, that price information search
will rise as consumers attempt to moderate
food expenditures.
Consumers are likely to be sensitive to
future price increases. Given low inflation
levels for groceries during the eighties,
any price increases may be seen as
"irregular" and immediately noticed. If food
prices do rise, consumers will probably en­gage
in both cutting down on food purchases
20 Family Economics Review 1988 No.2
and increasing savings on their food bills
through price information search. Con­venience
items, for which consumers pay a
premium to achieve time savings, may be
among the first items curtailed. In response,
food manufacturers are likely to increase
savings available to consumers on these
items by increasing available coupons or
offering incentives to supermarkets to place
these types of items on "special," making
price information search more profitable for
consumers. In this scenario, searching for
lower prices may become more important for
consumers wanting to moderate food
expenditures.
Consumers who wish to obtain savings on a
market basket should continue to engage in
price information search. This study focused
exclusively on dual-earner households, where
shoppers generally have higher prices of
time than shoppers in households with single
earners •6 The price of search time for
unemployed shoppers will remain lower than
that of employed shoppers, provided they
perceive similar savings available in the
food market. If price dispersion persists in
the future, all groups of consumers can con­tinue
to benefit from savings available on
groceries through price information search.
6 Bryant and Zick (~) found that nonem­ployed
consumers had consistently lower wage
rates than employed consumers when using
either the reservation wage or market alter­native
approaches to pricing home work
time.
REFERENCES
1. Advertising_ Age. 1987. Most buys put on
hold. October 26 issue.
2. -~--· 1987. Consumer worry keeps
on rising. November 3 issue.
3. • 1987. Good news: Consumers
bounce back. November 10 issue.
4. Becker, Gary. 1965. A theory of the
allocation of time. -Jo-u-rn-al- o-f -P-ol-iti-ca-l
-~S:2~omy, Vol. 75, pp. 493-517.
5. Bryant, W. Keith, and Cathleen D. Zick,
1983. Alternative strategies for pricing
homework time. Home Economics Re-s-ea-r-ch-
Journal 12(2): 133-144.
6. Economic Outlook. (Various issues.)
Survey Research Center, Institute for
Social Research, University of Michigan.
7. Kaitz, Evelyn. 1979. Getting the most
from your food dollar. Na!!_onal:_!._s>od
Review, NFR-6, pp. 26-29 (Winter issue).
U.S. Department of Agriculture, Economic
Research Service.
8. Maddala, G.S. 1985. Limited-Dependent
and Qualitative Variables in Ecgno­metrics,
Cambridge University Press,
Cambridge, MA.
9. Stigler, George. 1961. The economics of
information. Journal of Political
Economy 69(3) :213-225.
10. Trends: Consumer Attitudes and the
~~-ermarket. [Various years.] Food
Marketing Institute Research Division.
11. U.S. Department of Agriculture, Eco­nomic
Research Service. 1987. -N-at-io-na-l
Food Review, Yearbook, NFR 37.
12. U.S. Department of Commerce, Bureau
of the Census. 1986. Earnings in 1983 of
Marr!_ed-:_Co~le Families by Characteris­tics
of Husbands and Wives. Current
Population Reports. Consumer Income.
Series P-60, No. 153.
13. • [Various years.] Money
Income and Po~erty Status of_~amilies
and Persons in the United States.
Current Population Reports. Series P-60.
Regional Per Capita Personal
Income1
Regional differences in per capita person-al
income have widened since 1979, reversing
a 50-year trend of narrowing differences,
according to a report by the Bureau of
Economic Analysis (BEA), U.s. Department of
Commerce. Per capita personal income for a
region can change relative to the U.S.
average if its total personal income, its
1Per capita personal income of a region is
the total personal income earned by its
residents divided by the number in the popu­lation.
Total personal income is the sum of
before-tax income received by persons from
all sources, less personal contributions for
social insurance.
population, or both grow at a faster or
slower rate than the U.S. average. For
example, between 1979 and 1986 the below­average
gain in per capita personal income
in the Far West region (6 .8%, compared with
7.1% for the Nation) reflected rapid growth
in population (2.0%, compared with 1.0% for
the U.S.). This population growth in the Far
West more than offset rapid growth in per­sonal
income (8.9%, compared with 8.2% for
the country). Regional per capita income
gains between 1979 and 1986, and changes in
population size and total personal income by
region are provided in the BEA report. Also,
industries that had a strong affect on
changes in total personal incomes are
enumerated.
Per capita income gains in the Mideast
and in New England were higher than
national average gains between 1979 and 1986
(table). Total personal income grew rapidly
in these regions, boosted by large increases
in earnings in service industries such as
banking, brokerage, legal, business, and
health. In New England, large earnings
increases were also realized in the elec­tronic,
computer, and defense industries.
Population growth was deterred by relatively
high housing costs, which discouraged
workers from migrating to these regions
despite increased job opportunities.
Slow growth in total personal income in
the Great Lakes region and an unchanging
population size accounted for a below­average
gain in per capita income. Older
manufacturing industries, such as iron and
steel, yielded only small increases in
earnings. Additionally, earnings increases
in construction and trade were small, as
zero-population growth adversely affected
the demand for housing and consumer goods.
Per capita personal incomes for the Rocky
Mountain and Plains regions also showed
below-average gains. Growth in total per­sonal
income was dampened by small earnings
increases in industries affected by farming
and by oil prices and production. Rapid pop­ulation
growth in the Rocky Mountain region
also contributed to that region's below­average
per capita personal income growth.
In the Southwest as well, there was a
below-average gain in per capita income. An
above-average gain in total personal income
1988 No.2 Family Economics Review 21
from 1979 to 1982 resulted from the boom
conditions associated with rising oil
prices. Beginning in 1982, however, slow
growth in total personal income, in conjunc­tion
with continued rapid population growth,
more than offset this gain.
In the Southeast region there was an
above-average gain in per capita personal
income. Above-average per capita gains in
Tennessee (see table) and the Atlantic Coast
States offset below-average gains in the
other States. Atlantic Coast States sus­tained
a rapid growth in population, but
earnings increases in banking, business,
health, and defense-related industries
compensated for population growth. In the
Per capita personal income, by State and region, 1986
Region
United States
New England:
Connecticut ••••••••••
Massachusetts ••••••••
New Hampshire •••••••
Rhode Island •••••••••
Vermont ............. .
Maine ••••••••••.• • • • ·
Mideast:
New Jersey •••••••••••
District of Columbia ••
New York ••••••••••••
Maryland •••••••••••••
Delaware ............ .
Pennsylvania •••••••••
Far West:
California ••••••••••••
Nevada •••••••••••••••
Washington •••••••••••
Oregon . ............. .
Great Lakes:
Illinois ............. .
Michigan ••••••.••.•••
Ohio .•....•..........
Wisconsin .•.••...•....
Indiana ...•..........
Plains:
Minnesota,,,,,,,,,,,,
Kansas ••••••••••••••.
Missouri ............ .
Nebraska •••••••••••••
Iowa ......... · • • · · • · ·
North Dakota •••••••••
South Dakota •••••••••
Southwest:
Texas ............... .
Arizona ............. .
Oklahoma •••••••••••••
New Mexico •••••••••••
Amount
(dollars)
14,641
19,600
17 '7 22
15,911
14,579
1'3,348
1~.790
113,626
19,397
17,111
16,864
15,010
14,249
16,904
15,437
15,009
13,328
15,586
14,775
13,933
13,909
13,136
14,994
14,650
13,789
13,742
13,348
12,472
11,814
1'3,478
1'3,474
12' 283
11,422
22 Family Economics Review 1988 No.2
------·----------
Percent of
national average
100
134
121
109
100
91
87
127
132
117
115
103
97
115
105
103
91
106
101
95
95
90
102
100
94
94
91
85
81
92
92
84
78
Average annual percent
change, 1979-86
7.1
9.0
9.4
9.0
8.1
8.0
8.2
8.9
8.0
8.6
8.3
7.3
6.8
7.0
5.7
6.2
5.5
6.4
6.4
6.5
6.3
6.1
7.2
6.7
6.9
6.5
5.6
5.8
5.6
6.2
7.1
5.6
6.3
States with below-average gains in per capita
income, slow growth in total personal income
was the major restraining factor. (Population
growth also was slow.) Personal income
growth was adversely affected by small
earnings increases in farming, coal mining,
and in related manufacturing industries,
including food processing and primary metals.
The table delineates per capita income by
region and State, in dollar amounts, as well
as in other measures.
Source: U.S. Department of Commerce,
Bureau of Economic Analysis, 1987, Regional
Differences in Per Capita Income Widen in
the 1980's, News, BEA 87-39.
Per capita personal income, by State and region, 1986--continued
Region
Rocky Mountain:
Colorado •••••••••••••
Wyon:ting • •••••••••••••
Montana .•••••••••••••
Idaho ................
Utah •••••••••••••••••
Southeast:
Virginia ..............
Florida ...............
Georgia ..............
North Carolina •••••••
Tennessee ••••••••••••
Alabama .•........•...
South Carolina .......
Kentucky •••••••••••••
Louisiana .. ...........
Arkansas •••••••••••••
West Virginia •••••••••
Mississippi •••••••••••
Louisiana .. ...........
Arkansas •••••••••••••
West Virginia •••••••••
Mississippi •••••••••••
Alaska .................
Hawaii . ••...............
BEA Regions:
New England •••••••••••
Mideast ................
Far West ...............
Great Lakes ••••••••••••
Plains ............. • • • • •
South west ••••••••••••••
Rocky Mountain ••••••••
Southeast ••••••••••••••
Amount
(dollars)
15,234
12,781
11,803
11,223
10,981
15,408
14,646
13,446
12,438
12,002
11,336
11,299
11,238
11,193
11,073
10,576
9,716
11,193
11,073
10,576
9,716
17,796
14,886
17. 166
16,565
16,348
14,467
13,992
13,195
13,146
12,694
Percent of
national average
104
87
81
77
75
105
100
92
85
82
77
77
77
76
76
72
66
76
76
72
66
122
102
117
113
112
99
96
90
90
87
Average annual percent
change, 1979-86
7.1
3.3
5.4
5.3
5.8
8.5
7.7
8.5
7.9
7.2
7.0
7.3
6.2
5.6
6.9
5.6
6.0
5.6
6.9
5.6
6.0
5.2
6.6
9.0
8.1
6.8
6.4
6.6
6.3
6.1
7.4
Source: U.s. Department of Commerce, Bureau of Economic Analysis, 1987, Regional
Differences in Per Capita Income Widen in the 1980's, News, BEA 87-39.
1988 No.2 Family Economics Review 2J
Nationwide Food Consumption
Survey 1987
By Mary Y. Hama and Howard A. Riddick
Economist and Nutritionist
Nutrition Monitoring Division
Human Nutrition Information Service
A nationwide study of the food consumption
and dietary levels of households and of food
and nutrient intake of individuals began in
April 1987. The Nationwide Food Consumption
Survey (NFCS) 1987 is the seventh in a
series of food consumption surveys conducted
by USDA's Human Nutrition Information
Service (HNIS) and its predecessor agencies.
Data from earlier surveys (1935-36, 1942,
1948, 1955, 1965-66, and 1977-78) have
provided major sources of data in evaluating
and developing national food and nutrition
policies.
The NFCS 1987 included a sample of about
6, 000 households of all incomes and a sample
of 3, 600 households of low incomes. The
Survey included the following two parts:
1. Household phase. Respondents were
asked to provide information on household
characteristics, the food used by the house­hold
for a 7 -day period, and the cost of
that food. In this phase of the Survey, food
quantities and money values were determined
for items used from the home food supply.
Usage was reported in the form in which
foods entered the kitchen and by source
(purchased, home produced, or received as
gift or pay). Consumption was measured in
an economic context--that is, all foods that
were used or that "disappeared" fro:n the
household food supply during the 7 -day
period.
2. Individual intake phase. Household
members were asked to provide 3 successive
days of information of their food intake.
This information was collected using a 1-day
dietary recall followed by a 2-day food
record. Respondents were asked to describe
foods and beverages and to identify them by
source, such as home food supplies, school
lunch, or restaurant meal. In this phase,
the quantities were recorded for amounts of
food eaten at home and away from home.
24 Family Economics Review 1988 No.2
The NFCS 1987 is one of several Federal
surveys that provide national statistics on
food consumption. Also, NFCS 1987 is a major
component of the National Nutrition Monitor­ing
System (NNMS), a set of related Federal
activities instituted to provide regular
information on the nutritional status of the
population. 1 NNMS activities are centered
primarily in the USDA and the U.S. Depart­ment
of Health and Human Services.
Why New Information Is Needed
Every major USJJA survey has shown
changes in the patterns of food consumption.
Between the 1935-36 and the 1948 studies,
great strides were made in the distribution
and storage of food products, most notably
in home refrigeration. Such changes affected
the way people purchased and used food.
Between the 1955 and 1965-66 studies, the
availability and consumer acceptance of many
new food products that offered convenience
changed the cooking patterns in many Ameri­can
households. Mixes for bakery products,
such as cakes and muffins, and readymade
bakery products are examples. Because of the
decline in "baking from scratch," substan-tial
decreases were noted in the household
consumption of flour, sugar, and other basic
baking ingredients.
The period between 1965-66 and 1977-78 saw
the proliferation of new products. Techno­logical
changes (such as freeze-dried coffee
and a variety of co1nmercially frozen foods)
reflected breakthroughs in food processing
and packaging. Chan~es in lifestyles (such
as increases in the proportion of wornen
employed outside the home) appear to have
decreased the time spent in meal preparation
and increased the demand for convenience
foods and fast-food-restaurant meals.
The NFCS 1987 may also show changes in
the pattern of food consumption reflecting
economic changes in incomes, relative food
prices, and demographic effects. There have
been changes in household composition, par­ticularly
a trend toward smaller families,
--1P~~;rkin, Betty B., and Robert L. Rizek,
1984, National Nutrition Monitoring System,
Family Economi_9_§_!l_eview 1984(2): 15-19.
and shifts in the age distribution. Other
factors may also contribute to changing
patterns of food consumption--an increased
frequency of eating away from home, a
greater emphasis on ethnic foods, and
popular use of aseptically packaged milk and
beverages. The period since the last survey
has been a time of increased concern about
the relationship between diet and health,
resulting in a greater variety of low-sodium
and low-fat products becoming available in
the market. Also, revisions in food program
policies may have influenced food intakes of
participants in programs such as the Food
Stamp Program; School Lunch Program; and
Women, Infants, and Children p·rograrn.
The Background
National Analysts (Division of Booz,
Allen and Hamilton, Inc.) under contract
with HNIS, collected the data, provided pre­liminary
data processing services, and
delivered the final data tapes to HNIS. The
final data will be tabulated for publication
in a series of reports and statistical hand­books.
The contract was carried out under
detailed specifications developed by USDA.
Technical information used in data computa­tions
and codings was supplied by the
Department. USDA food and nutrition special­ists
participated actively in developing
operating manuals, training programs, and
computer software, as well as in monitoring
the survey.
A number of organizations contributed to
the development of the NFCS 1987 question­naire.
These include USDA agencies; U.S.
Department of Health and Human Services;
other Federal agencies; regional, State, and
local groups such as Public Health Service
nutrition directors; food industry and trade
associations; universities; and nutrition
and social action organizations.
Operating procedures used in the Survey
were, in general, the same as those used in
the NFCS 1977-78. The Survey was designed
to provide a multistage stratified area proba­bility
sample representative of the 48
conterminous States. The sampling frame was
organized using estimates of the U.S.
population in 1980 updated to 1987. The
stratification plan took into account geo­graphic
location and degree of urbanization.
Each successive sampling stage selected in­creasingly
smaller, more specific locations.
Households were drawn from the 9 geo­graphic
divisions and 3 urbanization classes
in the 48 conterminous States as defined by
the U.S. Bureau of the Census. The Survey
consisted of two -~~arate samples:
1. An area probability sample that was
self-weighting and sufficient to produce
without substitution 6, 000 completed house­hold
questionnaires in a 1-year period
beginning in April 1987.
2. An area probability sample of low­income
households adequate to provide infor­mation
from at least 3, 600 sample households
with incomes not to exceed 130% of the
poverty income levels. A special screening
procedure was implemented to assure that a
proper and adequate number of households
were sampled in a 1-year period beginning
in April 1987.
The NFCS 1987, like earlier USDA surveys,
was designed to make effective use of quali­fied
interviewers who may or may not have
professional training in foods and nutrition.
Emphasis was given to interviewer selection,
training, and follow up. Each interviewer
was trained in an intensive 5-day session.
The Survey
The NFCS 1987 involved three visits with
participants: (1) An initial visit to
identify respondents, describe the survey,
and provide material on keeping notes on
household food used during the survey
period; (2) a personal interview 7 days
later to conduct the household phase of the
survey, to obtain a 1-day dietary recall
from individual members of the household,
and to leave a 2-day dietary record for
individual household members to complete;
and (3) a final contact 2 days later to help
complete the survey, if needed, and collect
the 2-day dietary record.
At the initial visit, an introductory
letter was given to the household. Inter­viewers
made an appointment, at least 7 days
later, for an interview with the household
member(s) responsible for food planning and
preparation. The respondent was requested to
keep notes, grocery store receipts, package
labels, and other helpful reminders of foods
used during the 7 days before the interview.
Special receipt holders were provided.
1988 No.2 Family Economics Review 25
During the second visit, the interviewer
collected information about the household-­such
as the age and sex of the members,
education, employment, and income--and then
administered the 7-day recall of food
consumption. Upon completion, the interview­er
began the 3-day food intake record for
individuals, which included a 1-day recall
(of the previous day) and a 2-day record (of
that day and the next). The interviewer
obtained 1-day recalls of food intake from
all eligible household members present--or
for young children, from the homemaker.
Concurrently, the interviewer trained house­hold
members in completing the intake
records, which were left with the household
for completion. The interviewer returned 2
or 3 days later to review the food-intake
schedules for completeness and legibility
and to assist in their completion when
needed.
Some methodological changes were intro­duced
in the NFCS 1987 to improve and
expand the data collection and processing.
These include the following:
Interviewing. In the household phase, the
interview was conducted with the use of a
laptop computer. It was expected that this
procedure would reduce data processing time
and make the survey results available on a
more timely basis than in previous surveys.
In the individual phase, intake records were
collected from all members, whereas in 1977-
78, data from all members were collected in
spring and from selected members in the
other seasons.
Questionnaire. More comprehensive ques­tions
were asked in both the household and
individual phases of the NFCS 1987 than in
the 1977-78 Survey. Race and ethnicity were
requested for each household member rather
than for just the respondent; education,
employment status, and occupation were asked
for all household members 15 years and older
rather than for only the household heads.
Additional questions affecting food intakes
were asked, such as sources of nutritional
information, smoking habits, and levels of
physical activity. In the individual intake
phase, the interviewers probed more for in­formation
on the amount and type of fat, on
salt, and on "forgotten" items than they did
in 1977-78.
26 Family Economics Review 1988 No.2
Food coding. In the individual intake
phase, the food coding system that was
introduced in the 1985 Continuing Survey of
Food Intakes by Individuals (CSFII) was
2 used. The system can be updated on a
continuing basis to include new products in
the market. Most of the 1977-78 food codes
can be adjusted to fit into the new system.
Nutrient data. The nutrient data base
used in 1987 has been updated and expanded
since 1977. The data base in 1977-78
included food energy and 14 nutrients:
protein, total fat, carbohydrate, vitamin A
(in international units), vitamin C, thiamin,
riboflavin, niacin, vitamin 86, vitamin 812,
calcium, phosphorus, magnesium, and iron.
Thirteen additional nutrients and dietary
components were included in 1987--saturated
fat, monounsaturated fat, polyunsaturated
fat, cholesterol, dietary fiber, vitamin A
(in retinol equivalents), carotenes,
vitamin E, folacin, zinc, copper, sodium,
and potassium. Other changes in the nutrient
data base resulted from improved data
(especially for iron, magnesium, vitamin
86, and vitamin 812), changed enrichment
standards for iron; higher fortification of
some foods with calcium, phosphorus, and
other nutrients; and changes in foods such
as the higher vitamin A content of new
varieties of carrots, and the lower fat of
some meats and meat products.
Uses of the Data
The NFCS 1987 meets a wide and expanding
range of needs for national data--on consum­ers,
foods, and nutritional content of
diets--that are not available from other
sources. The Survey aims to link consumers
with their food in terms of (1) nutritional
content and dietary adequacy and (2) factors
associated with acquisition, preparation,
and use of these foods. The following is a
summary of the uses of data from the
Survey.
2The individual intake phase of NFCS 1987
is similar to the USDA's CSFII. This smaller,
special purpose survey conducted in 1985 and
1986 obtained information only on adults 19
to 50 years of age and children 1 to 5 years
old. The NFCS 1987 includes individuals of
all ages.
USES OF DATA FROM NATIONWIDE FOOD
CONSUMPTION SURVEYS
Dietary Intake
Provide detailed benchmark data on
food and nutrient intake of population.
Monitot' the nutritional quality of diets.
Determine the size and nature of
populations at risk.
Identify intervention (food assistance),
fortification, or education most appro­priate
for populations at risk.
Identify socioeconomic factors associated
with diets.
Economics of Food Consumption
Assess demand for agricultural products,
marketing facilities, and services.
Determine the effects of socioeconomic
factors on the demand and expenditure for
food.
Determine the importance of home food
production.
Determine the demand for food away from
home and its effects on adequacy of diets.
Food Programs and Guidance
Determine factors affecting participation
in food programs and the effect of parti­cipation
on food expenditures and quality
of diet.
Determine change in participation and the
effects that would result from modifications
in food programs.
Determine the effect of food programs on
demand for food.
Identify populations at risk for possible
intervention programs.
Identify changes in food and nutrient
consumption that would reduce risk.
Develop food guides and plans that
reflect food consumption practices and
meet nutritional and cost criteria
(Thrifty Food Plan used as basis for
allotment for the Food Stamp Program).
Determine levels for food distribution
programs.
Food Safety
Determine intake of incidental con­taminants,
food additives, and naturally
occurring toxic substances.
Identify extrerne and unusual patterns
of intakes of foods or food ingredients
including additives.
Determine number of food items in which
a food additive may be permitted and in
what amounts.
Determine the need to modify regulation
in response to changes in consumption.
Identify size and nature of population
at risk from use of particular foods and
food products.
Identify patterns of use of foods and food
components in the diets of a population.
Historical Trends
Correlate food consumption and dietary
status with incidence of disease over time.
Follow food consumption through the life
cycle.
Predict changes in food consumption and
dietary status as they may be influenced
by economic, technological, and other
developments.
1988 No.2 Family Economics Review 27
Husbands in the Labor Market
Historically, married men have experienced
higher earnings and lower unemployment than
other major groups in the labor force.
Although husbands' labor force participation
rate is higher than that for never-married
or formerly married men (see table belm-v),
it has been falling for several decades.
Data from recent Current Population Surveys
1 (CPS) were used to examine this long-term
downward trend and other labor force charac­teristics
associated with married men.
Contraction in labor force participation
rate: A trend
The labor force participation rate of
husbands declined from 91% in 1955 to 79%
in the 1985-87 period. The participation
rate fell most rapidly between 1970 and
1975. Recent figures indicate that the rate
1 The CPS is the monthly household survey
(presently including 59,500 households) con­ducted
for the Bureau of Labor Statistics
by the Bureau of the Census. Information
obtained from the survey relates to the
employment status of the noninstitutional
population 16 years old and over.
Employment status of men, by marital status
Employment and Total,
marital status 16 years
and over
Labor force participation rate:
Husbands ••••••••••••••••••• 78.5
Never married . .............. 71.7
Other marital status ••••••••• 67.9
Unemployment rate:
Husbands .••••••••••••.••••• 4.5
Never married . .............. 12.9
Other marital status ••••••••• 9.2
and
16-24
years
95.3
65.2
87.6
7.4
15.5
13.1
has plateaued, at least temporarily. The
long-term decline in the labor force par­ticipation
rate of husbands, although fairly
pervasive by age, was led by older men.
The rate for husbands 65 years and older
fell roughly 27 percentage points over the
1955-85 period. The decline for 55- to
64-year-olds was nearly as dramatic
(18 points).
Increases in the level and availability of
nonemployment income (such as Social Securi­ty
retirement benefits, private pensions and
disability benefits) over the past several
decades have allowed men to retire at
younger ages. In fact, the substantial real
increases in Social Security payments that
occurred during the early to mid-seventies
are frequently cited as one reason for the
accelerated rate of decline in labor force
activity among older men during the same
period.
Private pension plans, another major
source of retirement income, covered 49% of
all private sector workers in 1979 compared
with 24% in 1950. In addition, these plans
have become increasingly liberal in their
provisions for early retirement. Evidence
indicates that more workers are taking
advantage of these options to leave the
labor force at younger ages.
age, March 1987
---·-----
25-34 35-44 45-54 55-64 65 years
years years years years and over
----
97.1 96.2 93.7 70.6 17.5
88.0 83.7 71.7 56.0 16.3
92.9 91.1 86.1 58.2 11.1
5.0 4.1 4.5 4.0 3.1
10.4 9.4 9.7 5.1 2.3
10.0 9.2 8.9 7.6 4.9
Source: Hayghe, Howard V., and Steven E. Haugen, 1987, A profile of husbands in
today's labor market, MonJ.!J...!X Labor Revl_ew 110(10):12-17, U.S. Department of Labor,
Bureau of Labor Statistics.
28 Family Economics Review 1988 No.2
Labor Force Characteristics of Married Men
Husbands (three of five men) have labor
force characteristics different from those
of other men. In almost all age groups,
husbands are more likely to have completed
high school than single or formerly married
men (as shown below), and the more years of
school completed, the more likely a man will
be in the labor force.
Men having completed
Age high school~-~98~
(years) Husbands Single Formerly
(percent) married
20 to 24 78 85 67
25 to 34 87 86 80
35 to 44 87 82 84
45 to 54 79 68 73
55 to 64 69 54 53
65 and over •• 54 44 40
Employed husbands are more likely than
other men to be in jobs associated with
higher pay. In 1987 about half of all
husbands worked in three occupational
categories--precision production, craft, and
repair (21%); executive, administrative,
and managerial (16%); and the professional
specialties (13%). For other men, the cor­responding
proportions were 18%, 9%, and 9%.
This concentration is reflected in earnings;
in 1986, about 46% of husbands who were
full-time wage and salary workers had weekly
earnings of $500 or more, compared with 25%
of other men.
For men, both unemployment and labor
force participation generally peak early in the
life cycle and then decline with age. Unem­ployment
rates decline as persons accumulate
work experience and settle in a career,
whereas labor force participation rates
usually remain high until health problems
limit the ability to work or until retire-ment.
Husbands are older, on average, than
other men and their unemployment rates are
much lower than those of other men (see
table, p. 28). In contrast, husbands with
children under 18 are, on average, younger
than husbands without children; fathers
typically have both higher labor force
participation rates and higher unemployment
rates than husbands without children.
The median age of Hispanic husbands in
1987 was 39 years, compared with 44 years
for black and 45 years for white husbands.
Reflecting their younger age, Hispanic hus­bands
experience higher rates of unemploy­ment
(7. 7% in March 1987) than do either
black (6.9%) or white (4.3%) husbands and
higher labor force participation rates than
those of white and black husbands. However,
the unemployment rate for young (16- to
24-year-old) black husbands is much higher
than that for their white or Hispanic
counterparts.
White husbands are more likely to work all
year at full-time jobs and less likely to
experience unemployment than blacks and
Hispanics. Also, black and Hispanic husbands
are concentrated in occupational categories
that are typified by relatively low wages.
About half the employed black and 40% of
Hispanic husbands are either in service jobs
or work as operators, fabricators, or
laborers. In contrast, slightly fewer than
one-fourth of white husbands are in such
jobs. These two factors contribute to a
higher median income in 1986 for married
white couples ($33,630) than for either
black couples ($26, 780) or Hispanic couples
($23,790).
In March 1987 about 56% of all husbands
had wives in the labor force. Of those
husbands who are employed, 63% have
employed wives. This compares with 56% of
unemployed husbands who have wives who
are employed. When each spouse is employed,
both the husband and wife tend to work in
similar occupations, which influences family
earnings. Earnings were generally highest
(more than $40,000) in families with both
spouses in managerial or professional
specialty occupations.
Husbands no longer constitute the majority
of the labor force. This dramatic shift
results from husbands' falling labor force
participation rates, the rise in wives' partici­pation,
and changes in marital patterns
resulting in increased numbers of divorced,
separated, and never-married persons.
Source: Hayghe, Howard V., and Steven E.
Haugen, 1987, A profile of husbands in
today's labor market, Monthly Labor Review
110 ( 10): 12-17, U.S. Department of Labor,
Bureau of Labor Statistics.
1988 No.2 Family Economics Review 29
Hispanic Population in the
United States
In March 1987 there were 18.8 million
1 . Hispanics in the United States, an mcrease
of 4.3 million persons (30%) since 1980.
During the same period, the non-Hispanic
population increased by only 6%. The Bureau
of the Census has revised the estimating
procedures for the Hispanic (Spanish) popu­lation
by (1) adding an allowance for net
undocumented immigration since 1980, and
(2) increasing the estimate for emigration
from the United States by legal residents.
The first Census Bureau report that uses
these adjusted figures compares demographic,
social, and economic characteristics of the
Hispanic and non-Hispanic populations in the
eighties. Hispanic population totals from
both the March 1986 and March 1987 Current
Population Surveys (CPS) were adjusted, but
not the data from the March 1982 CPS.
Subgroups of the Hispanic population are
also described. Mexicans accounted for 63%
(11.8 million persons) of the U.S. Spanish
population. Puerto Ricans, Central or South
Americans, Cubans, and other Hispanics 2
each constituted 5% to 12% of the Hispanic
population (see table, p. 31). Among these
subgroups, the highest rate of growth
between 1982 and 1987 was found in the
Central or South American population:
Growth rate between 1982 and 1987
Percent
Central or South American.......... 40
Other Hispanics • • • • • • • • • • • • • • • • • • • • 33
Mexicans • • • • • • • • • . • • • • • • • . • • • • • • • • • 22
Puerto Ricans • • • • • • • • • • • • • • • • • • • • • • ll
Cubans ........... · .... • • • • • • • • · • • · • 7
1 Estimates are based on the civilian
noninstitutional population and U.S. Armed
Forces members and families who reside in
the United States.
2 "Other Hispanics" include those whose
origins are from Spain, or they are persons
of Spanish origin who identify themselves as
Spanish, Spanish-American, Hispano, Latino,
or the like.
30 family Economics Review 1988 No.2
Social and economic characteristics high­lighted
in the report are summarized below.
Educational Attainment
Hispanics' educational attainment has im­proved
since 1982 but lags behind that of non­Hispanics.
A greater proportion of Spanish
persons age 25 years or older had completed
at least 4 years of high school in 1987 than
in 1982 (51%, compared with 45%). However,
there was not a significant difference in
the proportion of Hispanics age 25 years or
older who had completed 4 or more years of
college in 1982 and 1987. Non-Hispanics that
completed 4 years or more of high school
made comparable gains. Furthermore, unlike
Hispanics, they also made gains in the pro­portion
completing 4 or more years of college.
Family
The proportion of married-couple families
among Hispanics was lower in 1987 than in
1982 (71%, compared with 74%). A similar
change was evident for non-Hispanics. The
proportions of families maintained by a man
or a woman, with no spouse present, were
larger in 1987 than in 1982 for both
Hispanics and non-Hispanics.
Employment and Earnings
Employment rates among Hispanics and
non-Hispanics 16 years or older increased
between 1982 and 1987. However, the unem­ployment
of Hispanics (10%) remained higher
than that of non-Hispanics (7%).
Median earnings of Hispanic persons 15
years or older remained lower than those of
non-Hispanics. In 1986 the median earnings
of Hispanic men ($11,958) was 61% of that of
non-Hispanic men ($19, 588). Hispanic women's
earnings were 82% of other women's earnings.
Income
After adjusting for inflation, no signifi­cant
change was evident in the real money
income of Hispanic families between 1981 and
1986. In contrast, non-Hispanic families
experienced a 10% increase in real money
income during this period. However, when
1982 (the final year of the most recent
recession) is used as a base year, the real
income of Spanish families shows a 9%
increase (from $18,321 to $19,995 in 1986).
Non-Hispanics experienced an 11% increase in
real median family income over the same
post-recession period (not statistically
different from the increase experienced by
the Hispanic families).
Poverty
The poverty rate of Hispanic families was
24.7 in 1986, compared with a rate of 9.9
for non-Hispanic families. Even though the
poverty rate has not changed significantly
since 1981, the number of poor Hispanics
increased by 24% between 1981 and 1986
because of population growth. Of the 1.1
million Hispanic families that were living
below the poverty level in 1986, 49% were
maintained by women with no husbands pre­sent.
About 62% of the Hispanic families
below the poverty level in 1986 were headed
by householders who had completed less than
4 years of high school.
Source: U.S. lJepartment of Commerce,
Bureau of the Census, 1987, The Hispanic
~OQUlation in the United .§ ta tes: March _19R6
and 1987 (Advanced ReQort), Current Popula­tion
Reports, Population Characteristics,
Series P-20, No. 416.
Characteristics of persons of Hispanic origin and non-Hispanic origin, March 1987
Characteristic
Non-Hispanic
Total persons (thousands) •••
Median age (years) ••••••••••
Age (percent): 2
Under 18 years ••••••••••••
18 years and older ••••••••
65 years and older ••••••••
Male (percent) ••••••••••••••
Female (percent) ••••••••••••
Family size (mean) ••••••••••
Labor force status:
Total, 16 years and
older (thousands) ••••••••
Civilian labor force
(thousands) ............. .
Percent ................. .
Unemployed (percent) •••••
Median family income in
1986 (dollars) ••••••••••
Families below poverty level
in 1986 (thousands) ••••••••
Percent .................. .
219,999
32.6
25.7
74.3
12.3
48.5
'>1.5
~L1
170,320
109,832
64.5
6.8
30,231
5,938
q,9
Total
Hispanic origin
Mexican Puerto Central
Rican or South
American
Cuban Other1
Hispanic
--------------------
18,790 11,762
25.1 23.5
35.5 38 .9
64.5 61.2
4.9 4.2
50.1 51.6
49.9 48.4
3.8 4.0
12,772 7,642
8,302
65.0
10.2
19,995
1,085
24.7
5, 072
66.4
11.7
19,326
649
24.9
2. 284
24.3
38.2
61.7
3.6
46.4
53.6
3.6
1,499
808
53.9
11.0
14,584
226
38.1
2,139
27.3
28.6
71.2
2.8
47.0
53.0
3.7
1, 581
1,127
71.3
7.9
22,246
97
18.7
1,017
35.8
19.6
80.4
12.1
50.3
49.7
3.2
839
560
63.7
5.5
26,770
39
13.3
1,588
30.9
26.4
73.5
9.6
48.4
51.6
3.5
1,212
735
60.7
5.6
22,240
75
19.4
1
"0ther Hispanic" include those whose origins are from Spain, or they are persons of
Spanish origin who identify themselves as Spanish-American, Hispano, Latino, or the like.
2Percentages may not add up to 100 due to rounding.
Source: U.S. Department of Commerce, Bureau of the Census, 1987, The f!.i§_Qanic
PoQulation in the United States: March 1986 and 1987 (Advanced Report), Current
Population Reports, Population Characteristics Series P-20, No. 416.
19BB No.2 Family Economics Review 31
Recent Reports on Housing
PROGRAMS OF HUD
U.s. Department of Housing and Urban
Development, 1987
This 116-page booklet, which is updated
periodically, contains a brief description
of each HUD program. Included is informa­tion
on community planning and development,
public and Indian~ousing, fair housing and
equal opportunity, mortgage and loan insur­ance,
housing for the handicapped, and
policy development and research. Information
is also included on two new programs, Rental
Rehabilitation Housing Development and
Housing Voucher Demonstration. Single copies
of Pr<2g!'_~p_s__2_f_I-_I_!:ID, HUD-214-PA(13), are
available free from HUD, Office of the
Assistant Secretary for Public Affairs, Room
9246, 451 Seventh Street SW., Washington,
DC 20410.
HOUSING AND DISABLED PEOPLE:
A BASIC RIGHT
U.S. Department of Housing and Urban
Development, 1985
Two of the three booklets in this informa­tion
kit answer questions concerning the
housing rights of disabled persons and their
housing providers under Section 504 of the
Rehabilitation Act of 197 3. This Act pro­hibits
discrimination by reason of handicap
in programs or activities conducted by the
Federal Government or receiving Federal
financial assistance. The third booklet
summarizes current HUD programs pertaining
to the disabled and describes ways these
programs can be utilized by persons with
disabilities, as well as service providers,
public officials, and others interested in
facilitating the availability of housing
opportunity for the disabled. The kit is
free and may be obtained from the Special
Adviser for Disability Issues, Office of
Intergovernmental Relations, U.S. Department
of Housing and Urban Development, Room
10140, 451 Seventh Street, SW., Washington,
DC 20410.
32 Family Economics Review 1988 No.2
HOUSING REHABILITATION: PROGRAMS,
TECHNIQUES, AND RESOURCES
Hud User
U.S. Department of Housing and Urban
Development, 1987
This new resource guide offers an overview
of housing rehabilitation for both resi-dences
and commercial buildings in central
cities, an important strategy for reversing
urban decline. HUD documents, commercially
published books, and journal articles are
included. The guide covers general issues,
Federal programs, rehabilitation technology,
and historic preservation. Also provided is
a list of organizations, journal titles, and
other resources. The guide, PDR-1086, may
be purchased for $5 from HUD USER,
P.O. Box 280, Germantown, MD 20874-0280.
HOME EQUITY CONVERSION MECHANISMS
Hud User
U.S. Department of Housing and Urban
Development, 1985
Various means by which the elderly can
generate cash-flow from their home equity
while remaining in their homes are examined.
This 129-page report also discusses the
potential size of the home equity conversion
market among the elderly, develops a reverse
mortgage pricing model, and examines tax
issues involved in constructing a valid
sale-leaseback. _Home Equity_9_~nve!:sion
Mechanisms, PDR-1017, may be purchased for
$5 from HUD USER (address above).
AMERICAN HOUSING SURVEY, 1982 and 1983-­SUMMARY
OF HOUSING CHARACTERISTICS
FOR SELECTED METROPOLITAN AREAS
Hud User
U.S. Department of Housing and Urban
Development, 1986
These two supplementary reports, one
covering 1982 (109 pp.) and the other 1983
(110 pp.), present summary statistics on
housing and household characteristics from
the American Housing Survey (AHS). Informa­tion
is provided for the United States, for
the four geographic regions, and for 15
Standard Metropolitan Statistical Areas.
Included are data on financial characteris-tics
and neighborhood characteristics for
owner- and renter-occupied housing units,
selected characteristics of new construction
units, characteristics of housing units
removed from the inventory, and selected
characteristics of housing units occupied by
recent movers. Both summaries include data
tables (for all races, for black household-ers,
and for Hispanic householders),
methodological data, definitions and expla­nations
of subject characteristics, maps,
and a facsimile of the housing survey
questionnaire. American Hous!_ng Survey
Supplementi!_~Y_B-_eport No. _!_:..._!_98 2, RP4671,
and American Hol!sir!S: Survey Sup_.P!.~mentary
Re_P.ort No. 1: 1983, RP4672, may be purchased
for -$13 each from HUD USER (address above).
NCR Research Publication
To what extent has home economics research
contributed to improving the well-being of
families and individuals? This question is
often asked by administrators and policy
makers. In 1982 the Research Committee of
the North Central Association of Experiment
Station Directors 1 approved the establish­ment
of a regional research committee
(NC R-133) on home economics research
evaluation. This committee was directed to
critically examine the components and
methodologies of research evaluation and to
develop a written account of its
deliberations.
A framework, utilizing both quantitative
and qualitative measures, was developed to
encourage and assist home economics
researchers in designing and reporting
studies so that the impact of the research
on family and individual well-being is more
easily identified. A monolith describing
this framework, Home Economics Research
Impacts: Framework for Evaluation, Research
Bulletin No. 1182, has been published by the
Ohio Agricultural Research and Development
Center. For information on obtaining copies
of this publication, call Justin Besancon,
216-263-3775, or write to: Ohio Agricultural
Research and Development Center, The Ohio
State University, 1680 Madison Avenue,
Wooster, Ohio 44691-4096.
1 Agricultural Experiment Stations of
Illinois, Indiana, Iowa, Kansas, Michigan,
Minnesota, Missouri, Nebraska, North Dakota,
Ohio, South Dakota, and Wisconsin, and the
u.s. Department of Agriculture cooperating.
1988 No.2 Family Economics Review 33
New Publications
The following are for sale from the Super­intendent
of Documents, U.S. Government
Printing Office, Washington, DC 20402.
(202)783-3238:
Fact Book of United States Agriculture,
1987. August 1987. MP-1063.
SN001-000-04496-6. $4.25.
Yearbook of Agriculture. Our American
Land. November 1987. SNOO 1-000-04494-0.
$9.50.
The following is available free from the
Consumer Information Center. Write to
Consumer Information Center, Dept. 582T,
Pueblo, CO 81009.
Consumer's Resource Handbook. 1988
Edition.
Single copies of the following are avail­able
free from the U.S. Department of Agri­culture,
Agricultural Research Service, Room
227, Building 003, Beltsville, MD 20705:
The Beltsville Agricultural Research
Center--And Other Beltsville Area
Research Activities. Program Aid
No. 1389.
* * * * * *
Major Statistical Series of the United
States Department of Agriculture.
AH-671
*
Agriculture and Rural Economy Division
Economic Research Service
The Economics Research Service, USDA, is
updating its handbook Major .£~1!tis_!ic~
Series of the _ll_!.S. Department of Agriculture
for the first time since 1972. Originally
published during the period 1957-60, each
volume of the handbook will include changes
and a description of that particular series,
and identification of some titles in that
series that are no longer published. The
first 3 volumes of the 12-volume set are now
available from the Superintendent of
34 Family Economics Review 1988 No.2
Documents, U.S. Government Printing Office,
Washington, DC 20402, as follows:
Major Statistical Series of the United
States, Vol. 4: Agricultural Marketing
Costs and Charges. SN-001-019-001523-8.
$2.00.
Major Statistical Series of the United
States, Vol. 10: International Agricul­tural
Statistics. S N -001-019-00525-4.
$1.50.
Major Statistical Series of the United
States, Vol. 12: Costs of Production.
SN-001-019-00533-5. $1.25.
The complete 12-volume set can be ordered
for $20 from the Economic Research Service,
USOA, Room 208, 1301 New York Avenue,
NW., Washington, DC 20005-4778,
(202)786-1512. Individual volumes will be
sent as published; the complete set will
include the following:
Agricultural Prices.
.<\gricultural Production and Efficiency.
Farm Income.
Agricultural Marketing Costs and Charges
Consumption and Utilization of Agri-cultural
Products
Land Values and Land Use
Crop and Livestock Estimates
Farmer Cooperatives
Market News
International Agricultural Statistics
The Balance Sheet and Farm Finance
Costs of Production.
"' CXl
CXl
z
0
N
-.,
3"... '. .
.....
'<
...,
0
0
::J
0
3... ..
0
([)
;o
C1>
<.... .
C1>
:0:
""""
Cost of food at home estimated for food plans at 4 cost levels, February 1988, U.S. average
Sex-age group
FAMILIES
2
Family of 2:
';!0-50 years ••••••••••••••••••••••••
51 years and over ••••••••••••••••••
Family of 4:
Couple, 20-50 years and children--
1-2 and 3-5 years ••••••••••.•••••
6-8 and 9-11 years •••••••••••••••
IN"DIVIDUALS '
Child:
1-2 years •••••.•••..•....•..•••..•.
3-5 years ••••••••••••••••••••••••••
6-8 years ••••••••••••••••...•••••••
9-11 years ••.••••••••••..••••••••••
Male:
12-14 years •••••••••.••••••••••••••
15-19 years ••••••••••••••••••••••••
20-50 years ••••••••••••••••••••••••
51 years and over ••••••••••••••••••
Female:
12-19 years ••••••.••.•••••••..•.•••
20-50 years ••••••••••••••.•.••••••.
51 years and over .................
Thrifty
plan
$40.60
38.40
58.90
67.60
10.60
11.40
14.00
16.70
17.40
18.00
19.40
17.60
17.40
17.50
17.30
-------- ----------------
Cost for 1 week
Low-cost ~derate- Liberal
plan cost plan plan
$51.')0 $63.70 $79.30
49.30 61.20 73.40
73.90 90.50 111.30
86.90 108.90 D1.40
12.90 15.10 18.20
14.20 17.50 21.00
18.80 23.50 27.50
21.30 27.50 31.80
24.20 30.20 35.50
25.10 31.20 36.10
24.90 31.20 37.80
23.60 29.20 35.10
20.90 25.50 30.90
21.90 26.70 34.30
21.20 26.40 31.60
Cost for 1 month
1brifty Low-cost Moderate- Liberal
plan plan cost plan plan
$175.90 $223.10 $276.00 $343.70
166.30 213.80 265 .oo 317.60
255.40 320.10 392.00 48 2. 50
292.90 376.50 471.90 569.30
45.90 55.90 65.30 78.90
49.60 61.40 75.80 91.10
60.80 81.30 101.90 119.00
72.20 92.40 119.10 137.80
75.50 104.80 131.10 154.00
78.10 108.60 135.10 156.40
83.90 107.80 135.30 163.80
76.10 102.50 126.60 152.00
75.30 90.70 110.50 133.80
76.00 95.00 115.60 148.70
75.10 91.90 114.30 136. 71)
1
Assumes that food for all meals and snacks is purchased at the store and prepared at home. Estimates for the thrifty food
plan were computed from quantities of foods published in Famgy_ ECQ!]!?.:.nics R_E!_~i_e~. 1984(1). Estimates for the other plans were
computed from quantities of foods published in Fami!Y_EcQ_!)ornj~~-RE!_.view, 1983(2). The costs of the food plans are estimated by
updating prices paid by hnuseholds surveyed in 1977-78 in USDA's Nationwide Food Consumption Survey. USDA updates these
survey prices using information from the Bureau of Labor Statistics, C~Qeta!]~_9_ _1 !_~ort, table 3, to estimate the costs for
the food plans.
2 10 percent added for family size adjustment. See footnote 3.
3 The costs given are for individuals in 4-person families. For individuals in other size families, the following adjustments
are suggested: 1-person--add 20 percent; 2-person--add 10 percent; 3-person--add 5 percent; 5- or 6-person--subtract
5 percent; 7- or more-person--subtract 10 percent.
()
0
5!1.
9.
~
0
0.
Q
.-+
::z::
0
~
Updated Estimates of the Cost of Raising a Child
The cost of raising urban children: 1981 annual average; moderate-cost level1
Region and
age of child
(years)
MIDWEST:
Under 1
1 ••••••••••••••.•
2-3 ••••••••••••••
4-5 ••••••••••••••
6 ••••••••••••••••
7-9 ••••••••••••••
10-11 ••••••••••••
12 •••••••••••••••
13-15 ••••••••••••
16-17 ••••••••••••
Total ••••••••••
NORTHEAST:
Under 1 •••••••••
1 •••.••.•••••.•••
2-3 ••••••••••••••
4-5 ••••••••••••••
6 ••••••••••••••••
7-9 ••••••••••••••
10-11 ••••••••••••
12 •••••••••••••••
13-15 ••••••••••••
16-17 ••••••••••••
Total
SOUTH:
Under 1 •••••••••
1 ••••••••••••••••
2-3 ••••••••••••••
4-5 ••••••••••••••
6 ••••••••••••••••
7-9 ••••••••••••••
10-11 ••••••••••••
12 •••••••••••••••
13-15 ••••••••••••
16-17 ••••••••••••
Total
WEST:
Under 1 •••••••••
1 ••••••••••••••••
2-3 ••••••••••••••
4-5 ••••••••••••••
6 ••••••••••••••••
7-9 ••••••••••••••
10-11 ••••••••••••
12 .............. .
13-15 ••••••••••••
16-17 ••••••••••••
Total
Total
Food
at
heme"
Food
away
fran
hane
Clothing Medical
care
Educa­tion
Transpor­tation
All
other4
$4.699 $613 $0 $148 $2.016 $343 $0 $8 74 $705
4,838 752 0 148 2,016 343 0 874 705
4. 505 752 0 241 1, 771 343 0 761 637
4, 774 863 158 241 1, 771 343 0 761 637
5,013 836 158 334 1,680 343 163 761 738
5. 207 1, 030 158 334 1, 680 343 163 761 738
5. 402 1, 225 158 334 1, 680 343 163 761 738
5,762 1,253 189 483 1,741 343 163 818 772
5. 902 1, 393 189 483 1, 741 343 163 818 772
--~~L.4~6~6~--~1c,5~6~0 _____ ~1~8~9 ___ ~6~68~----~1 802 ____ ~3~4~3 ______ ~1~63~------~9~0~2 ___ ~8~3~9 _ _
95,933 19,523 2,398 6,532 31,764 6,174 1,956 14,434 13,152
4. 659 724 0 148 2. 046 343 0 761 637
4,826 891 0 148 2,046 343 0 761 637
4, 705 863 0 260 1,863 343 0 705 671
4,975 975' 158 260 1,863 343 0 705 671
5. 373 975 189 353 1,832 343 204 705 772
5,568 1,170 189 353 1,832 343 204 705 772
5,818 1,420 189 353 1,832 343 204 705 772
6,163 1,420 189 520 1,893 343 204 789 805
6,330 1,587 189 520 1,893 343 204 789 805
--~6~78~2~--~1L7~5~5------~2~2~1 ___ ~6~5~0 ___ ~1L9~2~4~--~3~4~3 _____ ~2~.4~------~8~4~6 ___ ~3_9 __ _
101,275 22,307 2,648 6,834 33,956 6,174 2,448 13,420 13,488
5,120
5,260
4,936
5,177
5,521
5,688
5,911
6,294
6. 461
6 928
104,546
668
808
780
863
863
1,030
1,253
1,253
1,420
1 560
19,854
0
0
0
158
189
189
189
221
221
221
2,776
5,045 668 0
5,213 836 0
4,952 808 0
5. 252 919 189
5,670 891 221
5,865 1,086 221
6,116 1,337 221
6,443 1,337 221
6,582 1,476 221
--~7~21~6~--~1~6~71~ ___ 252
106,784