Family Economics Review [1994, Volume 7, Number 3]

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I F I A IMI I I L I y I
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Editor
Joan C. Courtless
Editorial Assistant
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E c
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N 0 M I C
II II
1994 Vol.? No.3
Feature Articles
s PROPER I Y Of THE
LIBRARY
AUG 15 1994
UniverSity of North Carolina
at Greensboro
2 Expenditures on a Child by Families, 1993
Mark Lino
20 Income and Consumer Expenditures of Rural Elders
F. N. Schwenk
28 Trends in Tobacco Use
Joan C. Courtless
Research Summaries
0 . r rr
40 Housing Vacancies and Home Ownership
OF THE
RY
42 Job-Related Education and Training
'\ ;'; ~ 1994
Regular Items • Umver 1 1 ot I nrth f.arolin"
~t irE nstt r~l'
44 Recent Legislation Affecting Families
45 Data Sources
46 Charts From Federal Data Sources
48 Journal Abstracts and Book Summary
49 Poverty Thresholds
50 Cost of Food at Home
51 Consumer Prices
2
Feature Articles
Expenditures on a Child
by Families, 1993
By Mark Lino
Economist
Family Economics Research Group
Child-rearing expenses consume a large proportion of a family's income.
Using data from the 1990 Consumer Expenditure Survey, updated to 1993
dollars, this study examines expenditures on a child in husband-wife and
single-parent families with two children. Estimates are provided for major
components of the budget by age of child, family income, and region of
residence. Overall expenses on a child increase with the age of the child
and family income. Housing makes up the largest share of total expendi­tures
on a child regardless of the child's age or household income. Families
in the urban West generally have the highest child-rearing expenses. Also,
families spend more or less on a child depending on the number of other
children in the household and economies of scale. Results of this study
should be of use in developing State child support guidelines and foster
care payments as well as in family educational programs.
[[]
ince 1960, the Family
Economics Research Group
of the U.S. Department of
Agriculture (USDA) has
provided estimates of expenditures on
a child from birth through age 17. These
estimates are used in setting child sup­port
guidelines, foster care payments,
and in educational programs on parent­hood.
Recent estimates have been
based on 1987 expenditure data, up­dated
using the Consumer Price Index
(5,6). Because household expenditure
patterns change, new estimates were
derived using 1990 expenditure data
updated to 1993 dollars. This study
presents these new estimates for husband­wife
and single-parent families. It briefly
describes the data and methods used in
calculating child-rearing expenses 1 and
then discusses the estimated expenses.
1The report. "Expenditures on a Child by Familie ,
1993: Technical Report," provides a more detailed
description of the data and methodology. To ob­tain
a copy, contact: USDA, ARS, Family Economics
Research Group, Federal Building, Room 439A,
6505 Belcrest Rd. , HyattSv ille, MD 20782
(Telephone number: 30 1-436-8461 ).
To partially adj ust for price differentials
and varying patterns of expenditures,
the child-rearing expense estimates for
husband-wife families are provided for
urban areas in four regions (Northeast,
South, Midwest, and West) and rural
areas throughout the United States-as
well as for the United States overall.2
For single-parent families, estimates
are provided only for the United States
overall because of sample size limita­tions.
Expenditures on a child are
estimated for the major budgetary
components: housing, food, transporta­tion,
clothing, health care, child care
and education, and other miscellaneous
goods and services. The box on p. 3
describes each expenditure component.
2Urban areas are defined as Metropolitan Statistical
Areas (MSA' s) and other places of 2.500 or more
people outside an MSA; rural areas are places of
less than 2,500 people outside an MSA.
Family Economics Review
Source of Data
Data used to estimate expenditures on
a child are from the 1990 Consumer
Expenditure Survey (CE), administered
by the Bureau of Labor Statistics (BLS).
The CE collects information on socio­demographic
characteristics and income
of households as well as expenditures.
The CE, ongoing since 1980, interviews
about 5,000 households each quarter
over a 1-year period. Each quarter is
deemed an independent sample by BLS,
bringing the total number of households
in the 1990 survey to about 20,000.
From these households, the following
husband-wife and single-parent families
were selected for this study: those (l)
with at least one own child age 17 or
under in the household, (2) with six or
fewer children, (3) with no other related
or umelated people present in the house­hold
except own children, and (4) who
were complete income reporters. Com­plete
income reporters are households
that provided values for major sources
of income, such as wages and salaries,
self-employment income, and Social
Security income. Quarterly expendi­tures
were annualized. The sample was
weighted to reflect the U.S. population.
Methodology
The CE collects overall household
expenditure data for some budgetary
components (housing, food, transporta­tion,
health care, and other miscellaneous
goods and services) and child-specific
expenditure data for other components
(clothing, child care, and education).
Multivariate analysis was used to esti­mate
household and child-specific
expenditures, controlling for income
level, family size, and age of the younger
of two children so estimates could be
made for families with these varying
characteristics. Regional estimates were
derived by controlling for region. The
1994 Vol. 7 No.3
Housing expenses include shelter (mortgage interest, property taxes, or rent;
maintenance and repairs; and insurance), utilities (gas, elecuicity, fuel, telephone,
and water), and house furnishings and equipment (furniture, floor coverings,
major appliances, and small appliances). It should be noted that for homeowners,
housing expenses do not include mortgage principal payments; such payments
are considered in the CE to be a part of savings. Therefore, total dollars allocated
to housing by homeowners are underestimated in this report.
Food expenses include food and nonalcoholic beverages purchased at grocery
stores, convenience stores, and specialty stores; dining out at restaurants; and
school meals.
Transportation expenses include the net outlay on purchase of new and used
vehicles, vehicle finance charges, gasoline and motor oil, maintenance and
repairs, insurance, and public transportation.
Clothing expenses include children's apparel items such as diapers, shirts, pants,
dresses, and suits; footwear; and clothing services such as dry cleaning, alteration
and repair, and storage.
Health care expenses include medical and dental services not covered by insurance,
prescription drugs and medical supplies not covered by insurance, and health
insurance premiums not paid by employer or other organization.
Child care and education expenses include day care tuition and upplies; baby­sitting;
and elementary and high school tuition, books, and supplies.
Other miscellaneous expenses include personal care items, entertainment, and
reading materials.
three income groups of husband-wife
households (1990 before-tax income
under $28,900, between $28,900 and
$48,900, and over $48,900) were deter­mined
by dividing the sample for the
overall United States into equal thirds.
For each income level, the estimates
were for husband-wife families with
two children, with the younger child in
one of six age categories (0-2, 3-5, 6-8,
9-11, 12-14, and 15-17 years). House­holds
with four members (two children)
were selected as the standard since this
was the average size of two-parent
families in 1990. The focus was on the
younger child in a household since the
older child was sometimes over age 17.
It should be noted that the estimates in­clude
two-parent households with and
without pecific expenses; so for some
families, the mean e timates may be
higher or lower depending on whether
they incur the expen e or not. This
particularly applies to child care and
education estimates-about 50 percent
of families in the study had no expendi­tures
for this budgetary component.
Also, the estimates only cover out-of­pocket
expenditures on a child made
by the parents and not by others such as
grandparents or friends. In addition, the
three income categories were calculated
for the overall United State by dividing
the sample into equal thirds. Regional
income categories are based on the e
national income categories and may not
represent equal thirds in each area.
3
After the various overall household
and child- pecific expenditures were
estimated, these total amounts were
allocated among the four family mem­ber
(husband, wife, older child, and
younger child). Since the estimated
expenditures for clothing and child care
and education were only for children,
allocations of these expenses were made
by dividing the estimated expenditures
by two (the number of children in the
household).
Because the CE did not collect expendi­tures
on food and health care by family
member, data from other Federal studies
were used to apportion these budgetary
components to a child by age. Food
budget shares as a percentage of total
food expenditures, for the younger child
in a husband-wife household with two
children, were determined using the
1992 USDA food plans (8). These
shares were estimated by age of the
child and household income level. The
food budget shares were then applied to
estimated household food expenditures
to determine food expenses on a child.
Health care shares as a percentage of
total health care expenses for the younger
child in a husband-wife household with
two children were calculated from the
1987 National Medical Expenditure
Survey (4). These shares were estimated
by age of the child and applied to esti­mated
household health care expendi­tures
to determine expenses on a child.
Unlike food and health care, no authori­tative
base exists for allocating estimated
household expenditures on housing,
transportation, and other miscellaneous
goods and services among individual
hou ehold members. Two of the most
common approaches for allocating these
expenses are the marginal cost method
and the per capita method. The marginal
cost method measures expenditures on
a child as the difference in expenses
between a couple with children and an
4
equivalent childless couple. The method
depends on development of an equiva­lency
measure; however, there is no
universally accepted measure. Various
measures have been proposed, each
yielding different estimates of expendi­tures
on children.3 Some of the marginal
cost approaches assume that parents
do not alter their expenditures on them­selves
after a child is added to a house­hold.
In addition, couples without
children often buy homes larger than
currently needed in anticipation of
children. Comparing the expenditures
of these couples to similar couples with
a child could lead to underestimating
the expenditures on a child.
For these reasons, the per capita method
was used for this study. The per capita
method simply allocates expenses
among household members in equal
proportions. Although the per capita
method has its limitations, these limita­tions
were considered less severe than
those of the marginal cost approach.
A major limitation of the per capita
method is that expenditures for an
additional child may be less than average
expenditures. Because of this, adjust­ment
formulas for cases of one child or
three or more children were devised for
use when estimating expenditures on a
child for households of different sizes.
These formulas are discussed later on.
Transportation expenses resulting from
employment activities are not related to
expenses on a child, so these costs were
excluded from the estimated household
transportation expenses using data from
a 1990 study by the U.S. Department of
Transportation (12 ).
3For a review of equivalency measures and
estimates of expenditures on chi ldren resulting
from them, see U.S. Department of Health and
Human Services, Administration for Children
and Families, 1990, Estimates of Expenditures
on Children and Child Support Guidelines (II).
Estimated Expenditures
on a Child
Estimates of family expenditures on the
younger child in a husband-wife house­hold
with two children for the overall
United States, urban regions of the
country, and overall rural areas are
presented in tables 3-9 on pp. 13-19.
Income levels of households were up­dated
to 1993 dollars using the all-items
category of the CPI-U, and expenditures
were updated using the CPI for the
corresponding item (that is, the CPI's
for housing, food, etc.). Regional esti­mates
were updated to 1993 dollars
using the regional CPI's. Given the
large amount of information in the
tables, the following subsections high­light
the child-rearing expense estimates
for the younger child in a two-child
household for the overall United States
by income level, budgetary component,
and age of the child, as well as expense
estimates by region.
Income Level
Estimated expenses on a child vary
considerably by household income level
(fig. 1). Depending on age of the child,
the expenses range from $4,960 to
$6,260 for families in the lowest income
group ( 1993 before-tax income less
than $32,000), from $6,870 to $8,300
for families in the middle income group
( 1993 before-tax income between $32,000
and $54,100), and from $10,210 to
$1 I ,790 for families in the highest .
income group ( 1993 before-tax income
more than $54,100). On average, house­holds
in the lowest group spent 27 per­cent
of their before-tax income on a
child, those in the middle income group,
17 percent, and those in the highest
income group, 13 percent. The range
in these percentages would be narrower
if after-tax income were considered,
since a greater proportion of income in
higher income households goes toward
taxes.
Family Economics Review
Figure 1. Estimated 1993 annual family expenditures on a child,
by before-tax income level and age of child1
Dollars
12,000
10,000
8,000
6,000
4,000
2,000
0
0-2 3-5 6-8 9-11 12-14 15-17
Age of child
0 Less than $32,000 $32,000-$54,100 • More than $54,1 00
1U.S. average for younger child in two-child family.
Although families in the highest income
group spent slightly less than twice the
amount that families in the lowest income
group spent on a child, on average, the
amount varied by budgetary component.
In general, expenses on a child for goods
and services considered to be necessities
(such as food) did not vary as much as
those considered to be discretionary
(such as other miscellaneous expenses)
among households in the three income
levels. For example, food expenses on a
child age 15-17 averaged $1,490 in the
lowest income group and $2, 140 in the
highest income group, a 44-percent dif­ference.
Other miscellaneous expenses
on the same age child averaged $540 in
the lowest income group and $1,370 in
the highest income group, a 154-percent
difference.
1994 Vol. 7 No.3
Budgetary Component
As a proportion of total child-rearing
expenses, housing accounted for the
largest share; figure 2 shows this for
families in the middle income group.
Based on an average for the six age
groups, housing accounted for 31 per­cent
of child-rearing expenses for a
child in the lowest income group, 33
percent in the middle income group,
and 36 percent in the highest income
group. Food was the second largest
average expense on a child for families
regardless of income level, accounting
for 20 percent of child-rearing expenses
for a child in the lowest income group,
18 percent in the middle income group,
and 16 percent in the highest income
group. Transportation was the third
largest child-rearing expense, making
up 14 to 17 percent of child-rearing
expenses across income levels.
• In general, expenses
on a child for goods
and services consid­ered
to be necessities
{such as food) did
not vary as much
as those considered
to be discretionary
{such as other
miscellaneous
expenses) ...
5
6
Expenditures on a
child were lower in
the younger age
categories and
higher in the older
age categories.
This held across
income groups ...
----------------------------------
Figure 2. Estimated 1993 family expenditures on a child through
age 17, by budgetary share1
Food
Other
Child Care & Education
Clothing Health
1U.S. average for middle income families (1993 before-tax income between $32,000 and
$54,100).
Clothing was the fourth largest expense
on a child for families in the lowest in­come
group (10 percent of child-rearing
expenses), whereas other miscellaneous
goods and services (personal care items,
entertainment, and reading materials)
made up the fourth largest expense on a
child for families in the middle (10 per­cent
of child-rearing expenses) and high­est
(12 percent) income groups. Clothing
accounted for 8 and 7 percent of expenses
on a child for families in the middle and
highest income groups. These estimates
of children's clothing expenses do not
include clothing received in the form
of gifts or hand-me-downs. Child care
and education were 6 to 9 percent, and
health care 5 to 7 percent of child-rearing
expenses across income groups.
For health care, these estimated expendi­tures
include only out-of-pocket expenses
and not that portion covered by health
insurance.
Age of Child
Expenditures on a child were lower in
the younger age categories and higher
in the older age categories. This held
across income groups (figure 3 depicts
this for families in the middle income
group) even though housing expenses,
the highest child-rearing expenditure,
generally declined as the child grew
older. The decline in housing expenses
reflects diminishing interest paid by
homeowners over the life of a mortgage.
Payments on p1incipal are not consid­ered
part of housing costs in the CE.
Child-rearing food, transportation,
clothing, and health care expenses
generally increased over age of a chi ld
for all three income levels. Transporta­tion
expenses were highest for a child
age 15-17, when he or she would start
driving. Child care and education ex­penses
were highest for a child under
age 6. Most of this expense may be
attributable to child care at this age.
The estimated expenses for child care
and education may seem low for those
with the expense. However, as pre­viously
discussed, households with
and without the expense are included
in the estimates.
Family Economics Review
Figure 3. Estimated 1993 annual family expenditures on a child,
by age and budgetary share 1
Percent $6,870 $7,220 $7,460
100
$6,980 $7,390 $8,300
Other
t----; Child Care & Education
80 Health
Clothing
60 Transportation
40 Food
20
Housing
0
0-2 3-5 6-8 9-11 12-14 15-17
Age of child
1U.S. average for middle income families (1993 before-tax income between $32,000 and
$54,100).
Region
Child-rearing expenses in the various
regions of the country reflect patterns
observed in the United States overall.
In each region, expenses on a child
increased with income level of the
household and, generally, with age
of the child. Overall child-rearing ex­penses
were highest in the urban West,
followed by the urban Northeast, urban
South, and rural areas; figure 4 shows
total child-rearing expenses by region
and age of a child for middle income
families. Child-rearing expenses were
lowest in the urban Midwest; households
in the urban Midwest had child-rearing
expenses that averaged 2 to 3 percent
below those of households in rural
areas. This is contrary to previous
estimates by the Family Economics
Research Group where rural areas
had the lowest child-rearing expense
estimates and the urban Midwest the
second lowest.
1994 Vol. 7 No. 3
Much of the difference in expenses on
a child among regions was related to
housing costs. Total housing expenses
on a child were highest in the urban West
and lowest in rural areas. However,
child-rearing transportation expenses
were highest for families in rural areas.
This likely reflects the longer distances
that must be traveled and the lack of
public transportation in these areas.
Adjustments for Older Children
and Household Size
The expense estimates on a child repre­sent
expenditures on the younger child
at various ages in a husband-wife house­hold
with two children. It cannot be
assumed that expenses for the older
child are the same at these various ages.
Expenses may vary by birth order. To
determine whether a difference exists,
the extent of this difference, and how
the expenditures may be adjusted to
estimate expenses on an older child,
the method described on pp. 3-4 was
repeated, with the focus being on
the older child in each of the same age
categories as used with the younger
child. A family with two children was
again used as the standard. Household
income and region of residence were
not held constant, so findings are appli­cable
to all families .
It was found that, on average, husband­wife
household with two children spent
about the same amount on a younger
and older child (except for differences
caused by age). So, the figures in tables
3-9 reflect expenditures on either child
in a two-child family. Thus, annual
expenditures on children in a husband­wife,
two-child family may be estimated
by summing the expenses for the two
appropriate age categories. For example,
annual expenditures on children ages
9-11 and 15-17 in a husband-wife family
in the middle income group for the over­all
United States would be $15,280
($6,980 + $8,300).
The estimates should also be adjusted if
a household has only one child or more
than two children. Families will spend
more or less on a child depending on
the number of other children in the
household and economies of scale. To
derive these adjustments, multivariate
analysis was used to estimate expendi­tures
for each budgetary component
controlling for household size and age
of the younger child, but not household
income level and region of the country,
so the results are applicable to all families.
These expenditures were then assigned
to a child using the method previou ly
described. Compared with expenditures
for each child in a husband-wife, two­child
family, husband-wife households
with one child spent an average of 26
percent more on the single child, and
those with three or more children spent
an average of 22 percent less on each
child.
7
Therefore, to adju t the figures in
table 3-9 to estimate annual overall
expenditures on an only child, 26 percent
should be added to the total expense for
the child's age category. To estimate
expenditures on three or more children,
22 percent should be subtracted from
the total expense for each child's age
category and the e totals should be
summed. As an example of adjustments
needed for different numbers of children,
the total expenses for a middle income
family in the overall United States on a
child age 15-17 with no siblings would
be $10,460 ($8,300 x 1.26) and the
total expense on three children ages
3-5, 12-14, and 15-17 would be $17,870
(($7,220 + $7,390 + $8,300) X .78).
Expenditures by
Single-Parent Families
The estimates of expenditures on a
child by husband-wife families do not
apply to single-parent families, which
account for an increasing percentage
of families with children. Therefore,
separate estimates of child-rearing
expenses in single-parent households
were made using CE data. Most si ngle­parent
families in the survey (91 per­cent)
were headed by a woman.
The method used in determining child­rearing
expenses for two-parent house­holds
was followed. Multivariate
analysis was used to estimate expendi­tures
for each budgetary component,
controlling for income level, household
size (a single parent with two children
was used as the standard), and age of
the younger child (the same age catego­ries
as used with children in two-parent
families).
Income groups of single-parent house­holds
(1990 before-tax income under
$28,900 and $28,900 and over) were
selected to correspond with the income
groups used in estimating child-rearing
expenditure in husband-wife house­holds.
This income includes child
support payments. The two higher
8
Figure 4. Estimated 1993 annual family expenditures on a child,
by region and age 1
1993 dollars
9,000
8,500
8,000
7,500 ·-- ----
7,000
6,500
j('
_, -"
----
A
/
/ ,-11
/
//
6,000 ';;--::;:---::;-;:------:;:-;::------;:::--:;-7----:;-;::--:;-::----:;-;::~
0-2 3-5 6-8 9-11 12-14 15-17
Age of child
Urban Midwest Rural Urban South Urban Northeast Urban West - -
1U.S. average for middle income families in 1993.
income groups of two-parent fami lies
( 1990 before-tax income between
$28,900 and $48,900 and over $48,900)
were combined because only 16 percent
of single-parent households had a 1990
before-tax income of $28,900 and over.
The sample was weighted to reflect the
U.S. population.
Children's clothing and child care and
education expenditures were divided
between the two children in the one­parent
household. For food and health
care, household member shares were
calculated for a three-member house­hold
(single parent and two children,
with the younger child in one of the six
age categories) using the USDA food
plans and the 1987 National Medical
Expenditure Survey findings. These
shares for the younger child in a single­parent
family were then applied to
estimated food and health care expendi­tures
to determine expenses on the
younger child in each age category.
• -
Housing, transportation, and other
miscellaneous expenditures were
allocated among household members
on a per capita basis. Transportation
expenses were adjusted to account for
nonemployment-related activities in
single-parent families. Income and
expenses were updated to 1993 dollars.
Child-rearing expense estimates for­single-
parent families are in table 9.
For the lower income group ( 1993
before-tax incomes less than $32,000),
a comparison of estimated expenditures
on the younger child in a single-parent
family with two children with those in
a husband-wife family is presented in
table I; as previously discussed, 84
percent of single-parent familie and
33 percent of husband-wife fami lies
were in this lower income group. More
single-parent than husband-wife families
fell in the bottom range of this lower
income group. Average income for
single-parent families in the lower
Family Economics Review
Table 1. A comparison of estimated 1993 expenditures on a child by
single-parent and husband-wife families 1
Single-parent Husband-wife
Age of child households households
0-2 $4,310 $4,960
3-5 4,970 5,260
6-8 5,710 5,520
9- II 4,980 5,070
12- 14 5,350 5,500
15 - 17 6,400 6,260
Total (0 - 17) $95,160 $97,710
1 Estimate> are for the younger child in a two-child family in the overall United States with 1993 before­tax
income less than $32,000.
income group was $13,700, compared
with $20,000 for husband-wife families
in this income group. However, total
expenditures on a child through age 17
were, on average, only 3 percent lower
in single-parent households than in two­parent
households.
Single-parent families in this lower
income group, therefore, spend a larger
proportion of their income on children.
On average, housing and clothing ex­penses
were higher, whereas transporta­tion,
health care, child care and education,
and other miscellaneous expenditures
on a child were lower in single-parent
than in husband-wife households. Child­related
food expenditures were similar,
on average, in single-parent and in two­parent
families.
For the higher income group of single­parent
families (1993 before-tax income
of $32,000 or over), child-rearing ex­pense
estimates were about the same as
those for two-parent households in the
before-tax income group of $54,100 or
over: Total expenses for the younger
child through age 17 were $192,930 for
single-parent families versus $192,780
for husband-wife families. Therefore,
child-rearing expenses for the higher
income group of single-parent families
1994 Vol. 7 No. 3
also consume a larger proportion of
income than in husband-wife families.
It appears that expenditures on children
do not differ very much between single­parent
and husband-wife households.
What differs is household income levels.
As single-parent families have one less
potential earner (the absent partner), on
average, their total household income is
lower and child-rearing expenses are a
greater percentage of this income.
Estimates only cover out-of-pocket
child-rearing expenditures made by the
parent with primary care of the child
and do not include child-related expendi­tures
made by the parent without
primary care or others, such as grand­parents.
Such expenditures could not
be estimated from the data. Overall
expenses by both parents on a child in a
single-parent household, therefore, are
likely greater than this study's estimates.
To determine the extent of the difference
in expenditures on an older child in
single-parent households, the previous
procedure was essentially repeated with
the focus being on the older child.
A family with two children was used as
the standard. On average, single-parent
households with two children spent
about 8 percent le s on the older than
0
It appears that
expenditures on
children do not differ
very much between
single-parent and
husband-wife
households. What
differs is household
income levels.
9
on the younger child (in addition to dif­ferences
caused by age). This contrasts
with husband-wife households that
spent about the same amount on the
older and younger child.
A with husband-wife households, more
or less is spent if a single-parent house­hold
has only one child or three or more
children. To determine these differences,
multivariate analysis was used to esti­mate
expenditures for each budgetary
component controlling for household
size and age of the younger child.
These expenditures were then assigned
to a child using the previous method.
Compared with expenditures for the
younger child in a single-parent, two­child
family, single-parent households
with one child spent about 37 percent
more on the single child, and those with
three or more children spent about 28
percent less on each child.
Comparisons With
Past Estimates
The child-rearing expense estimates
presented in this study are based on
data from the 1990 CE updated to 1993
dollars. Previous expense estimates of
the Family Economics Research Group
were based on the 1987 CE updated to
1992 prices (9). Table 2 compares the
1992 and 1993 overall U.S. estimates of
expenditures on the younger child in a
two-child household for husband-wife
and single-parent families.
The before-tax income of the bottom
third income group was slightly lower
in 1993 than in 1992. This represents a
decline in real income for lower income
families. For husband-wife households
in the lower income group, although the
real income of these families declined,
estimated expenses on children increased
by about 6 percent from 1992 to 1993.
This increase was greater than the infla­tion
rate of 3 percent over this period (1 0).
10
---- ------------------------~~~
Table 2. Comparison of estimated 1992 and 1993 total (from birth to
age 18) expenditures on a child by husband-wife and single-parent
families, overall United States 1
1992 1993
Before-tax income Total expenditures Before-tax income Total expenditures
Husband-wife families
Less than $32,100 $92,070 Less than $32,000 $97,710
$32,100 to $51,900 $128,670 $32,000 to $54, I 00 $132,660
More than $51 ,900 $180,690 More than $54,100 $192,780
Single-parent families
Less than $32,100 $96,630 Less than $32,000 $95,160
$32,100 or more $179,730 $32,000 or more $192,930
1 Estimates are forthe younger child in a two-child family.
The middle income group of husband­wife
families experienced a 3-percent
increase in child-rearing expenses and
the higher income group a 7-percent
increase.
In addition to increases in expenditures
by husband-wife families on the younger
child in a two-child household, there
have been changes in expenses on the
older child and expenses on an only
child or three or more children. Findings
based on the 1987 CE showed that
husband-wife households spent about
3 percent more on an older child than a
younger child (in addition to differences
caused by age). In contrast, when the
1990 CE and more current data for allo­cating
various budgetary components
were used, no difference in expenses
between the older and younger child
was found. Also, using the 1990 CE,
husband-wife families spent 26 percent
more on an only child than on a child
in a two-child family, compared with
21 p·ercent more using the 1987 CE.
Husband-wife families with three or
more children spent 22 percent less on
each child using either the 1987 or the
1990 CE.
Based on the more recent expenditure
data and more recent sources for allocat­ing
food, transportation, and health care
expenses, single-parent families in the
lower income group spent 2 percent less
on a younger child in a two-child family
in 1993 than in 1992, whereas those in
the higher income group spent 7 percent
more. Single-parent families spent 8
percent less on an older child using the
1990 CE, compared with 11 percent
less using the 1987 CE. Using either
the 1987 or the 1990 CE, single-parent
households spent 37 percent more on
an only child than on a child in a two­child
family. In cases of three or more
children, single-parent families spent
28 percent less on each child than in a
two-child family using the 1990 CE,
whereas they spent 26 percent less on
each child using the 1987 CE.
These differences in child-rearing ex­pense
estimates show the need to update
such estimates using the most recent
expenditure data and the most recent
studies to allocate various budgetary
components among family members.
Parental expenditures on children not
only change with the general cost of
living but with different economic and
social conditions.
Family Economics Review
Estimating Future Costs
The estimates presented in this study represent household expenditures on a child of a certain age in 1993. To estimate these
expenses for the first 17 years, future price changes need to be incorporated in the figures. To do this, a future cost formula
is used such that:
CJ= Cp(l + i)"
where:
Cj= projected future annual dollar expenditure on a child of a particular age
Cp =present (1993) annual dollar expenditure on a child of a particular age
i =projected annual inflation (or deflation)
n = number of years from present until child will reach a particular age
An example of estimated future Estimated annual expenditures on a child born in 1993, by income group1
expenditures on the younger child
in a husband-wife family with two
Income group
children for each of the three in-
Year Age Lowest Middle Highest
come groups for the overall United
States is presented. The example
assumes a child is born in 1993, 1993 <1 $4,960 $6,870 $10,210
reaching age 17 in the year 2010, 1994 1 5,260 7,280 10,820
and the average annual inflation
1995 2 5,570 7,720 11,470
rate over this time is 6 percent (the
average annual inflation rate over 1996 3 6,260 8,600 12,660
the past 20 years) (10). As can be 1997 4 6,640 9,120 13,420
seen, total family expenses on a
1998 5 7,040 9,660 14,230
child through age 17 would be
$170,920,$231,140, and $334,590 1999 6 7,830 10,580 15,250
for households in the lowest, mid- 2000 7 8,300 11 ,220 16,160
die, and highest income groups,
2001 8 8,800 11,890 17,130
respectively. In 1993 dollar values,
these figures would be $97,710, 2002 9 8,570 11,790 17,230
$132,660, and $192,780. 2003 10 9,080 12,500 18,270
Inflation rates other than 6 percent
2004 11 9,620 13,250 19,360
could be substituted into the for- 2005 12 11 ,070 14,870 21,490
mula if projections of these rates 2006 13 11,730 15,760 22,780
vary in the future. Also, it is some-what
unrealistic to assume that
2007 14 12,430 16,710 24,150
households remain in one income 2008 15 15,000 19,890 28,260
category as a child grows older. For 2009 16 15,900 21,080 29,950
most families, income rises over 2010 17 16,860 22,350 31,750
time. In addition, such projections
assume child-rearing expenditures Total $170,920 $231,140 $334,590
change only with inflation. Com-parisons
of the estimates using the 1 Estimates are for the younger child in a husband-wife family with two chi ldren for the overall United
1987 CE and 1990 CE show that States.
parental expenditure patterns
change over time.
1994 Vol. 7 No.3 11
Other Expenditures
on Children
Expenditures on a child estimated in this
study were composed of direct parental
expenses made on a child through age 17
for seven major budgetary components.
These direct expenditures excluded
costs related to childbirth and prenatal
health care. In 1991, these particular
health care costs averaged $4,720 for
a normal delivery and $7,826 for a
cesarean delivery (3). These costs may
be reduced by health insurance.
One of the largest expenses related to
a child after age 17 is for a college edu­cation.
The College Board (2) estimated
that in 1993-94, average annual tuition
and fees were $2,240 at 4-year public
colleges and $9,516 at 4-year private
colleges; annual room and board was
$3,566 at 4-year public colleges and
$4,226 at 4-year private colleges. For
2-year colleges in 1993-94, average
annual tuition and fees were $1,271 at
public colleges and $5,991 at private
ones; annual room and board was
$3,820 at 2-year private colleges (no
estimates were given for 2-year public
colleges). Other parental expenses on
a child after age 17 could include those
associated with a child living at home
and gifts and contributions to a child
after this age.
Indirect costs involved in the rearing
of children were also not included in
the estimates. Although these costs are
typically more difficult to measure than
direct expenditures, they may be sub­stantial.
The time involved in rearing
children is considerable. The dollar
value of household work done by non­Black
married women in 1988 was
estimated to be between $8,750 and
$10,830; that of non-Black males was
estimated to be between $3,200 and
$7,080 (1). In addition, earnings and
12
future career opportunities may be
diminished because time in the labor
force for one or both parents is reduced
to care for children. For women who
References
gave birth, one study found that the
earnings foregone in the year of birth
and in the two subsequent years
averaged $14,400 in 1986 dollars (7).
1. Bryant, W.K., Zick, C.D., and Kim, H. 1992. The Dollar Value of Household
Work. College of Human Ecology, Cornell University.
2. The College Board. 1993. News from the College Board. September 22 issue.
3. Health Insurance Association of America. 1992. Source Book of Health Insurance
Data. [1992 ed.] Washington, DC.
4. Lefkowitz, D., and Monheit, A. 1991. Health Insurance, Use of Health Services,
and Health Care Expenditures (AHCPR Pub. No. 92-0017). National Medical
Expenditure Survey Research Findings 12, Agency for Health Care Policy and
Research, Public Health Service, Rockville, MD.
5. Lino, M. 1990. Expenditures on a child by husband-wife families. Family
Economics Review 3(3):2-18.
6. Lino, M. 1991. Expenditures on a child by single-parent families. Family
Economics Review 4(/):2-7.
7. Spalter-Roth, R.M., and Hartmann, H.l. 1990. Unnecessary Losses: Costs to
Americans of the Lack of Family and Medical Leave. Institute for Women's Policy
Research, Washington, DC.
8. U.S. Department of Agriculture, Human Nutrition Information Service. 1992.
Cost of food at horne. Family Economics Review 5(3):37.
9. U.S. Department of Agriculture, Agricultural Research Service, Family Economics
Research Group. 1993. Expenditures on a Child by Families, 1992.
I 0. U.S. Department of Commerce, Bureau of the Census. 1993. Statistical Abstract
of the United States, 1993. [113th ed.]
11. U.S. Department of Health and Human Services, Office of the Assistant Secretary
for Planning and Evaluation. 1990. Estimates of Expenditures on Children and
Child Support Guidelines.
12. U.S. Department of Transportation, Federal Highway Administration. 1990
Nationwide Personal Transportation Study (forthcoming).
Family Economics Review
Table 3. Estimated annual expenditures on a child by husband-wife families,
overall United States, 19931
Child care
Transpor- Health and
Age of child Total Housing Food tation Clothing care education Othe,2
Income: Less than $32,000 (Average income=$20,000)
0- 2 . . .. . . .. 4,960 1,870 730 720 380 330 530 400
3- 5 ... .. . .. 5,260 1,910 830 740 380 330 600 470
6- 8 . . .. .. .. 5,520 1,830 1,040 960 450 370 290 580
9- 11 . ... .. . 5,070 1,490 1,240 810 450 410 180 490
12-14 ....... 5,500 1,530 1,220 1,010 720 380 110 530
15-17 ....... 6,260 1,550 1,490 1,270 730 460 220 540
Total (0- 17) . . 97,710 30,540 19,650 16,530 9,330 6,840 5,790 9,030
Income: $32,000 to $54,100 (Average income=$42,600)
0- 2 .. . . . . . . 6,870 2,560 870 1,080 450 410 840 660
3-5 . ..... . . 7,220 2,600 1,020 1 '100 440 400 930 730
6-8 ... .. . . . 7,460 2,520 1,270 1,320 530 470 510 840
9- 11. . .... . 6,980 2,190 1,500 1,170 520 510 340 750
12- 14 ... . ... 7,390 2,220 1,490 1,370 830 470 220 790
15-17 . . . .. . . 8,300 2,250 1,750 1,650 850 560 440 800
Total (0- 17) .. 132,660 43,020 23,700 23,070 10,860 8,460 9,840 13,710
Income: More than $54,100 (Average income=$79,400)
0-2 . .... . . . 10,210 4,050 1,200 1,330 600 480 1,320 1,230
3-5 .. . . . . . . 10,630 4,090 1,370 1,360 600 480 1,430 1,300
6-8 . . ...... 10,750 4,010 1,620 1,580 700 560 870 1,410
9- 11 . . . ... . 10,200 3,670 1,870 1,430 690 600 620 1,320
12- 14 . ..... . 10,680 3,710 1,890 1,630 1,090 570 430 1,360
15-17 ....... 11 ,790 3,730 2,140 1,920 1 '11 0 660 860 1,370
Total (0- 17) . . 192,780 69,780 30,270 27,750 14,370 10,050 16,590 23,970
1 Estimates are based on data from the 1990 Consumer Expenditure Survey updated to 1993 dollars using the
CPI-U. The figures represent estimated expenses on the younger child in a two-child family. Estimates are about
the same for the older child, so to calculate expenses for two children, figures should be summed for the appropriate
age categories. To estimate expenses for an only child, multiply the total expense for the appropriate age category
by 1.26. To estimate expenses for each child in a family with three or more children, multiply the total expense
for each appropriate age category by 0.78. (For expenses on all children in a family, these totals should be summed.)
20ther miscellaneous expenses include personal care items, entertainment, and reading materials.
1994 Vol. 7 No. 3 13
Table 4. Estimated annual expenditures on a child by husband-wife families,
urban West, 19931
Child care
Transpor- Health and
Age of child Total Housing Food tation Clothing care education Other2
Income: Less than $32,100 (Average income=$20,200)
0- 2 . ....... 5,470 2,230 770 820 380 290 550 430
3-5 . .... ... 5,730 2,250 870 850 370 280 610 500
6-8 ....... . 6,030 2,200 1,090 1,060 450 320 300 610
9- 11 ....... 5,650 1,920 1,300 910 440 360 190 530
12-14 ....... 6,000 1,900 1,270 1,120 700 330 110 570
15-17 ..... .. 6,800 1,960 1,540 1,380 710 400 230 580
Total (0- 17) .. 107,040 37,380 20,520 18,420 9,150 5,940 5,970 9,660
Income: $32,100 to $54,400 (Average income=$42,900)
0- 2 .... . ... 7,410 2,920 910 1,200 440 360 880 700
3-5 . ....... 7,760 2,950 1,070 1,220 440 360 960 760
6-8 ........ 8,000 2,900 1,330 1,440 520 410 520 880
9- 11 .. ... .. 7,590 2,620 1,570 1,290 520 450 350 790
12-14 .. ..... 7,930 2,600 1,540 1,500 810 420 230 830
15-17 ....... 8,870 2,660 1,810 1,770 830 500 460 840
Total (0- 17) .. 142,680 49,950 24,690 25,260 10,680 7,500 10,200 14,400
Income: More than $54,400 (Average income=$79,900)
0-2 ........ 10,690 4,330 1,230 1,450 590 440 1,380 1,270
3-5 ........ 11,110 4,360 1,400 1,480 590 440 1,500 1,340
6-8 ........ 11,200 4,300 1,660 1,700 680 510 900 1,450
9- 11 ... . ... 10,740 4,020 1,930 1,540 680 550 650 1,370
12-14 ....... 11 '130 4,000 1,930 1,750 1,070 520 450 1,410
15-17 ....... 12,320 4,060 2,190 2,040 1,090 600 920 1,420
Total (0- 17) .. 201 ,570 75,210 31 ,020 29,880 14,100 9,180 17,400 24,780
1 Estimates are based on data from the 1990 Consumer Expenditure SuNey updated to 1993 dollars using the regional
CPI-U. The figures represent estimated expenses on the younger child in a two-child family. Estimates are about
the same for the older child, so to calculate expenses for two children, figures should be summed for the appropriate
age categories. To estimate expenses for an only child, multiply the total expense for the appropriate age category
by 1.26. To estimate expenses for each child in a family with three or more children, multiply the total expense for
each appropriate age category by 0.78. (For expenses on all children in a family, these totals should be summed.)
20ther miscellaneous expenses include personal care items, entertainment, and reading materials.
The Western region consists of the following States:
Alaska Nevada
Arizona
California
Colorado
Hawaii
Idaho
Montana
14
New Mexico
Oregon
Utah
Washington
Wyoming
Family Economics Review
Table 5. Estimated annual expenditures on a child by husband-wife families,
urban Northeast, 19931
Child care
Transpor- Health and
Age of child Total Housing Food tation Clothing care education Other2
Income: Less than $32,100 (Average income=$20,100)
0-2 ........ 5,130 2,070 830 700 380 320 420 410
3- 5 ........ 5,390 2,100 930 730 380 310 470 470
6- 8 ...... .. 5,770 2,040 1,160 950 450 360 220 590
9- 11 . ... ... 5,400 1,760 1,380 790 450 390 130 500
12-14 .. . . . . . 5,820 1,750 1,350 1,010 720 370 80 540
15-17 ... . ... 6,550 1,800 1,620 1,260 730 430 160 550
Total (0- 17) .. 102,180 34,560 21 ,810 16,320 9,330 6,540 4,440 9,180
Income: $32,100 to $54,300 (Average income=$42,800)
0-2 .. ...... 7,030 2,770 970 1,080 450 400 690 670
3-5 ....... . 7,370 2,800 1,120 1,110 440 390 770 740
6- 8 . . ... . .. 7,690 2,740 1,400 1,330 530 450 390 850
9 - 11 ....... 7,320 2,460 1,640 1,170 530 490 260 770
12- 14 ....... 7,710 2,440 1,630 1,380 840 460 160 800
15-17 .. .. ... 8,580 2,500 1,890 1,660 850 540 330 810
Total {0- 17) .. 137,100 47,130 25,950 23,190 10,920 8,190 7,800 13,920
Income: More than $54,300 (Average income=$79,800)
0- 2 ........ 10,250 4,170 1,280 1,340 600 480 1,130 1,250
3-5 . .. . .... 10,640 4,200 1,460 1,370 600 470 1,230 1,310
6-8 . ....... 10,840 4,150 1,720 1,590 690 550 710 1,430
9- 11 ....... 10,420 3,870 2,000 1,430 690 590 500 1,340
12-14 ... .... 10,860 3,850 2,000 1,640 1,090 560 340 1,380
15-17 . ...... 11,920 3,900 2,260 1,930 1,110 640 690 1,390
Total {0- 17) . . 194,790 72,420 32,160 27,900 14,340 9,870 13,800 24,300
1 Estimates are based on data from the 1990 Consumer Expenditure Survey updated to 1993 dollars using the regional
CPI-U. The figures represent estimated expenses on the younger child in a two-child family. Estimates are about
the same for the older child, so to calculate expenses for two children, figures should be summed for the appropriate
age categories. To estimate expenses for an only child, multiply the total expense for the appropriate age category
by 1.26. To estimate expenses for each child in a family with three or more children, multiply the total expense for
each appropriate age category by 0.78. (For expenses on all children in a family, these totals should be summed.)
20ther miscellaneous expenses include personal care items, entertainment, and reading materials.
The Northeastern region consists of the following States:
Connecticut New York
Maine Pennsylvania
Massachusetts Rhode Island
New Hampshire Vermont
New Jersey
1994 Vol. 7 No.3 15
Table 6. Estimated annual expenditures on a child by husband-wife families,
urban South, 19931
Child care
Transpor- Health and
Age of child Total Housing Food tation Clothing care education Othe~
Income: Less than $31,800 (Average income=$20,000)
0-2 ... 0 0 0 0 0 4,850 1,830 690 580 410 380 590 370
3-5 0 0 0 0 0 0 0 0 5,120 1,860 790 610 400 370 650 440
6- 8 0 0 0 0 0 0 0 0 5,390 1,800 990 820 480 430 330 540
9 - 11 0 0 0 0 0 0 0 5,010 1,530 1 '190 670 480 470 210 460
12-14 ....... 5,380 1,510 1 '160 880 760 440 130 500
15-17. ······ 6,160 1,560 1,420 1,130 770 510 260 510
Total (0 -17) .. 95,730 30,270 18,720 14,070 9,900 7,800 6,510 8,460
Income: $31,800 to $53,900 (Average income=$42,400)
0- 2 0 0 0 0 0 0 0 0 6,800 2,520 840 950 480 460 920 630
3-5 0 0 0 0 0 0 0 0 7,130 2,540 980 980 480 460 1,000 690
6- 8 0 0 0 0 0 0 0 0 7,370 2,490 1,230 1,200 560 530 560 800
9- 11 0 0 0 0 0 0 0 6,930 2,210 1,450 1,040 560 570 380 720
12- 14. 0 0 0 0 0 0 7,310 2,200 1,430 1,250 880 540 250 760
15-17 ..... 00 8,260 2,250 1,690 1,520 900 620 510 770
Total (0- 17) .. 131 ,400 42,630 22,860 20,820 11,580 9,540 10,860 13,110
Income: More than $53,900 (Average income=$79,100)
0-2 0 0 0 0 0 0 0 0 10,050 3,900 1,150 1,210 640 550 1,410 1,190
3- 5 0 0 0 0 0 0 0 0 10,440 3,930 1,310 1,240 640 550 1,520 1,250
6-8 0 0 0 0 0 0 0 0 10,560 3,880 1,550 1,450 740 640 940 1,360
9- 11 0 0 0 0 0 0 0 10,090 3,600 1,810 1,300 730 680 690 1,280
12- 14. 0 0 0 0 0 0 10,500 3,580 1,810 1,510 1,150 640 490 1,320
15-17 ... . ... 11 ,710 3,640 2,060 1,780 1,180 730 990 1,330
Total (0- 17) . . 190,050 67,590 29,070 25,470 15,240 11,370 18,120 23,190
1 Estimates are based on data from the 1990 Consumer Expenditure Survey updated to 1993 dollars using the regional
CPI-U. The figures represent estimated expenses on the younger child in a two-child family. Estimates are about
the same for the older child, so to calculate expenses for two children, figures should be summed for the appropriate
age categories. To estimate expenses for an only child, multiply the total expense for the appropriate age category
by 1.26. To estimate expenses for each child in a family with three or more children, multiply the total expense for
each appropriate age category by 0.78. (For expenses on all children in a family, these totals should be summed.)
20ther miscellaneous expenses include personal care items, entertainment, and reading materials.
The Southern region consists of the following States:
Alabama Kentucky South Carolina
Arkansas Louisiana Tennessee
Delaware Maryland Texas
District of Columbia Mississippi Virginia
Florida North Carolina West Virginia
Georgia Oklahoma
16 Family Economics Review
Table 7. Estimated annual expenditures on a child by husband-wife families,
urban Midwest, 19931
Child care
Transpor- Health and
Age of child Total Housing Food tation Clothing care education Othe,-2
Income: Less than $31,800 (Average income=$19,900)
0-2 ...... .. 4,570 1,750 650 620 360 290 520 380
3-5 .. . ... . . 4,850 1,780 750 650 350 290 580 450
6-8 . .. . .. .. 5,120 1,720 940 860 430 330 280 560
9- 11. ... . . . 4,740 1,440 1,140 710 430 360 180 480
12- 14 .. .... . 5,090 1,430 1,100 920 680 340 110 510
15-17 . . .... . 5,850 1,480 1,370 1,170 690 400 220 520
Total (0- 17) .. 90,660 28,800 17,850 14,790 8,820 6,030 5,670 8,700
Income: $31,800 to $53,800 (Average income=$42,400)
0-2 .. . . . . . . 6,500 2,440 800 990 430 370 830 640
3- 5 . ....... 6,840 2,470 940 1,020 420 370 910 710
6-8 ... ... .. 7,050 2,410 1,180 1,230 500 420 490 820
9- 11 . . .... . 6,650 2,140 1,400 1,080 500 460 330 740
12- 14 ....... 7,000 2,120 1,380 1,290 800 430 210 770
15-17 ... ... . 7,880 2,170 1,640 1,550 810 500 430 780
Total (0- 17) .. 125,760 41 ,250 22,020 21,480 10,380 7,650 9,600 13,380
Income: More than $53,800 (Average income=$79,000)
0- 2 .. . .. . .. 9,720 3,830 1 '11 0 1,250 570 450 1,300 1,210
3 - 5 . . . . .. . . 10,110 3,860 1,270 1,270 570 450 1,410 1,280
6-8 ........ 10,200 3,800 1,510 1,480 660 510 850 1,390
9- 11 . .. .... 9,760 3,530 1,770 1,330 660 560 610 1,300
12-14 .. . . . . . 10,150 3,510 1,760 1,540 1,050 520 430 1,340
15-17 . ...... 11 ,280 3,560 2,020 1,810 1,070 610 860 1,350
Total (0- 17) .. 183,660 66,270 28,320 26,040 13,740 9,300 16,380 23,610
1 Estimates are based on data from the 1990 Consumer Expenditure Survey updated to 1993 dollars using the regional
CPI-U. The figures represent estimated expenses on the younger child in a two-child family. Estimates are about
the same for the older child, so to calculate expenses for two children, figures should be summed for the appropriate
age categories. To estimate expenses for an only child, multiply the total expense for the appropriate age category
by 1.26. To estimate expenses for each child in a family with three or more children, multiply the total expense for
each appropriate age category by 0.78. (For expenses on all children in a family, these totals should be summed.}
20ther miscellaneous expenses include personal care items, entertainment, and reading materials.
The Midwestern region consists of the following States:
Illinois Missouri
Indiana Nebraska
Iowa North Dakota
Kansas Ohio
Michigan South Dakota
Minnesota Wisconsin
1994 Vol. 7 No. 3 17
Table 8. Estimated annual expenditures on a child by husband-wife families,
Rural, 19931
Child care
Transpor- Health and
Age of child Total Housing Food tation Clothing care education Othe~
Income: Less than $31 ,700 (Average income=$19,900)
0-2 ........ 4,700 1,480 740 840 380 340 520 400
3-5 ........ 4,960 1,510 830 860 370 340 580 470
6-8 ........ 5,270 1,460 1,040 1,080 450 390 280 570
9- 11 ....... 4,910 1,180 1,250 930 450 430 180 490
12- 14 ....... 5,290 1,170 1,220 1,130 730 400 110 530
15-17 ....... 6,060 1,220 1,480 1,390 740 470 220 540
Total (0- 17) .. 93,570 24,060 19,680 18,690 9,360 7,110 5,670 9,000
Income: $31,700 to $53,700 (Average income=$42,400)
0-2 ........ 6,630 2,170 880 1,210 450 430 830 660
3-5 ........ 6,960 2,200 1,030 1,230 440 420 920 720
6-8 ........ 7,210 2,150 1,280 1,450 520 490 490 830
9 - 11 . . ..... 6,820 1,870 1,510 1,300 530 530 330 750
12- 14 ....... 7,190 1,850 1,490 1,500 850 500 210 790
15-17 ....... 8,110 1,910 1,750 1,780 860 580 430 800
Total (0- 17) .. 128,760 36,450 23,820 25,410 10,950 8,850 9,630 13,650
Income: More than $53,700 (Average income=$78,900)
0-2 ........ 9,840 3,550 1,190 1,460 600 510 1,310 1,220
3- 5 ........ 10,230 3,580 1,350 1,490 590 510 1,420 1,290
6-8 ....... . 10,360 3,530 1,600 1,700 690 590 860 1,390
9 - 11 ..... . . 9,910 3,250 1,860 1,550 690 630 620 1,310
12- 14 ....... 10,340 3,240 1,860 1,760 1,100 600 430 1,350
15-17 ....... 11,470 3,290 2,110 2,040 1,120 680 870 1,360
Total (0- 17) .. 186,450 61 ,320 29,910 30,000 14,370 10,560 16,530 23,760
1 Estimates are based on data from the 1990 Consumer Expenditure Survey updated to 1993 dollars using the regional
CPI-U. The figures represent estimated expenses on the younger child in a two-child family. Estimates are about
the same for the older child, so to calculate expenses for two children, figures should be summed for the appropriate
age categories. To estimate expenses for an only child, multiply the total expense for the appropriate age category
by 1.26. To estimate expenses for each child in a family with three or more children, multiply the total expense for
each appropriate age category by 0.78. (For expenses on all children in a family, these totals should be summed.)
20ther miscellaneous expenses include personal care items, entertainment, and reading materials.
Rural areas throughout the United States are represented and are defined as places of less than 2,500 people
outside a Metropolitan Statistical Area.
18 Family Economics Review
Table 9. Estimated annual expenditures on a child by single-parent families,
overall United States, 19931
Child care
Transpor- Health and
Age of child Total Housing Food tation Clothing care education Othe,.-2
Income: Less than $32,000 (Average income=$13,700)
0-2 ........ 4,310 1,570 830 690 450 190 380 200
3-5 ........ 4,970 1,870 860 760 430 270 490 290
6-8 ........ 5,710 2,090 1,060 630 550 390 530 460
9 - 11 .. ..... 4,980 1,910 1,170 580 530 420 120 250
12-14 . ...... 5,350 1,830 1,200 670 750 420 160 320
15-17 . ...... 6,400 2,130 1,420 820 1,010 530 150 340
Total (0- 17) . . 95,160 34,200 19,620 12,450 11 '160 6,660 5,490 5,580
Income: $32,000 or more (Average income=$47,900)
0- 2 ........ 9,600 3,630 1,350 1,570 600 330 950 1,170
3- 5 ........ 10,370 3,920 1,420 1,630 570 440 1,140 1,250
6-8 ........ 11 ,320 4,140 1,730 1,500 720 600 1,200 1,430
9 - 11 .. .. ... 10,310 3,960 1,930 1,450 690 650 420 1,210
12- 14 ....... 10,860 3,890 1,940 1,550 960 640 600 1,280
15-17 ....... 11,850 4,180 2,150 1,590 1,260 790 580 1,300
Total (O- 17) 192,930 71 '160 31,560 27,870 14,400 10,350 14,670 22,920
1 Estimates are based on data from the 1990 Consumer Expenditure Survey updated to 1993 dollars using the
CPI-U. The figures represent estimated expenses on the younger child in a two-child family. For estimated
expenses on the older child, multiply the total expense for the appropriate age category by 0.92. To estimate
expenses for two children, the expenses on the younger child and older child-after adjusting the expense on the
older child downward-should be summed for the appropriate age categories. To estimate expenses for an only
child, multiply the total expense for the appropriate age category by 1.37. To estimate expenses for each child in
a family with three or more children, multiply the total expense for each appropriate age category by 0.72-after
adjusting the expenses on the older children downward. (For expenses on all children in a family, these totals
should be summed.)
20ther miscellaneous expenses include personal care items, entertainment, and reading materials.
1994 Vol. 7 No.3 19
20
Income and Consumer
Expenditures of Rural Elders
By F.N. Schwenk
Research Leader
Family Economics Research Group
Poverty statistics indicate that nonmetro elderly are more likely to be
poor than metro elderly. This study provides additional information on
differences in the economic status of rural and urban elderly households.
The Consumer Expenditure Interview Survey data for 1990 and 1991 were
used to provide income and expenditure information on rural and urban
elderly households. Findings show that rural elders had 84 percent as much
income and spent 85 percent as much as urban elders. Rural elderly women
living alone had 69 percent as much income and spent 79 percent as much
as urban elderly women living alone. Rural elderly women living alone are
particularly at risk economically. Policy planners and service providers may
need to be especially aware of their needs.
[QJ ne of four Americans who
are 65 years or older lives
in a nonmetropolitan area 1
(4). Thus, nonmetro elders
are an important segment of the elderly
population. Various studies have
reported that these elders tend to fare
less well than metro elders.
A recent publication (5) of the Inter­agency
Forum on Aging-Related
Statistics reports data on nonmetro
elders from several national surveys.
These data on poverty, housing, health,
and other measures of well-being indi­cate
that nonmetro elderly may be less
well-off than urban elderly. The report
states that "a higher percent of non­metro
elderly than metro elderly are
impoverished; one-half of nonmetro
1 "Nonmetropolitan" refers to counties outside a
metropolitan area. A metropolitan area is a county
(or counties) containing a place or urbanized area
of 50,000 people or more with a total population
of at least I 00,000, including adjacent counties
that have a high degree of economic and social
integration with the central county.
elderly are in poor, near-poor, or low
income families." Although nonmetro
elderly are more likely to own their
home, the homes are of lower value
and in poorer physical condition than
homes owned by metropolitan elders.
The report indicates that nonmetro
elderly are not healthier nor more active
than metro elderly persons. There is no
difference in the percentage who smoke
heavily, drink heavily, eat healthful
diets, or are overweight. And, although
the social support network may be a
little larger, there is little evidence that
nonmetropolitan elderly have a more
closely knit community than metropolitan
elderly.
"Aging," a publication of the U.S.
Department of Health and Human
Services' Administration on Aging,
had a special issue on rural elderly,
which also challenged the image of
rural America as a "happy, healthy,
and tranquil place to live" {1). It re­ported
that the rural elderly have a
greater incidence of chronic health
Family Economics Review
conditions (arthritis, cardiovascular
disease, hypertension, and diabetes)
than urban elderly. Also, the 1990 U.S.
poverty rate for elders was 8 percent in
the suburbs, 15 percent in central cities,
and 16 percent in nonmetropolitan areas
(1). Another study (3) that used five
separate indicators of poverty to com­pare
the economic status of metro and
nonmetro elders documented that
nonmetro elderly are more likely than
metro elderly to be poor. This was the
case even when age, sex, race, marital
status, and living arrangements were
controlled by statistical procedures.
Since previous studies and national
poverty rates have shown that nonmetro
elders experience a lower level of eco­nomic
security than do metro elders,
this study was designed to provide addi­tional
information on these differences.
The measures of economic status are
average income and expenditures,
rather than poverty measures. The
measure of population density is rural/
urban rather than nonmetro/metro.
The rural households in this study are
a subset of the nonmetro population
that live in areas with less than 2,500
population.2 In addition, a particularly
vulnerable subgroup of rural elders is
analyzed. Because elderly women who
live alone tend to have fewer financial
resources than married couples or men
who live alone, this study describes both
the economic status of elderly rural
households and the economic status of
elderly women who live alone in rural
areas.
2Urban households in this study include any rural
hbuseholds that are within metro areas.
1994 Vol. 7 No. 3
Sample and Data
Data for the study are from the Consumer
Expenditure (CE) Interview Surveys for
1990 and 1991. The CE is an ongoing
survey that collects data on household
expenditures, income, and major socio­economic
and demographic charac­teristics.
A national sample of consumer
units3 is interviewed once each quarter
for five consecutive quarters; the first
interview is used only for bounding
purposes. Using a rotating sample
design, about one-fifth of the sample
is replaced each quarter. Each year of
CE data contains information from
about 20,000 quarterly interviews.
Income data are annual, and quarterly
expenditure data are multiplied by four
to provide estimates of annual expendi­tures.
The data are weighted to repre­sent
the U.S. noninstitutionalized
population.
Consumer units with a reference person4
65 years or older were selected. There
were 8,600 consumer units in the sample;
for the analysis of women living alone,
there were 3,022 reference persons.
Using the weighted numbers, 16 percent
of the elderly units lived in rural areas;
13 percent of the elderly women living
alone were in rural areas.
3 A consumer unit consists of either: (I) all members
of a particular housing unit who are related by
blood, marriage, adoption, or other legal arrange­ments;
(2) two or more people living together
who pool their incomes to make joint expenditure
decisions; or (3) a person li ving alone or sharing
a household with others or living as a roomer in
a private home or lodging house or in permanent
living quarters in a hotel or motel, but who is
financially independent. To be considered finan­cially
independent, at least two of the three major
expense categories (housing, food, and other living
expenses) have to be provided by the respondent.
In this paper, the term household refers to con­sumer
unit.
4Reference person is the first member mentioned
when the respondent was asked to "start with the
name of the person or one of the persons who
owns or rents the home."
Characteristics of Rural
Elderly
Household Type
Rural elderly consumer units were more
likely than urban units to consist of
married couples (table I, p. 22). Over
half of rural households were husband
and wife, compared with 43 percent of
urban households. A smaller percentage
of rural households were women living
alone-27 percent of rural, compared
with 36 percent of urban households.
Some rural women move to county-seat
towns or other urban areas (2,500 or
more population) when they are wid­owed
to be nearer services and to find
housing suitable to their needs. It is the
women who live alone and remain in
rural areas that are highlighted in table I.
Income
Rural units had lower income than
urban units. Table I shows the distribu­tion
among income categories. Thirty­eight
percent of rural units and 30
percent of urban units had income
under $10,000. For women living
alone, 68 percent of rural and 52 per­cent
of urban households had income
less than $10,000.
Age
For consumer units with a reference
person age 65 or older, the age of the
reference person in rural households
was not much different than that in
urban households, as shown in table I.
The average age was 74.4 years,
compared with 74.1 years for urban
reference persons. However, for women
living alone, rural women were older
than urban women. On average, rural
women were 77.3 years old, compared
with urban women's average of 76.2
years old. Forty-two percent of rural
women living alone were 80 years or
older, compared with 33 percent of
urban women. This has implications for
programs that serve rural households.
People who are 80 years or older and
living alone are likely to have needs for
transportation, health, and other services.
21
Race Table 1. Characteristics of rural and urban elderly 1 consumer units,
There was less race diversity in rural 1990-91
areas than in urban areas. Among eld-erly
units (and the subset of women All elderl~ Women living alone
living alone), a lower percentage of Characteristic Rural Urban Rural Urban
rural household heads were non-White.
Sample size 1,069 7,531 284 2,738
Education
Percent
Rural reference persons were less likely
Household type
than their urban counterparts to have
a high school education. Three of five Husband and wife 52 43
rural elders had not completed high Female living alone 27 36 100 100
school. For rural women living alone, Male living alone 12 10
the percentage who had not completed Other 9 II
high school was slightly higher (62 Household income
percent). <$5,000 10 5 22 10
$5,000- $9,999 28 25 46 42
Work Status $10,000-$14,999 17 17 14 19
As expected, most elders reported that $15,000-$19,999 11 11 1 7
they were retired or not working. Less $20,000- $29,999 15 14 5 7
than one of five reported an occupation. $30,000- $39,999 5 7 2
Rural women living alone were even $40,000 - $49,999 2 3
more likely to be retired or not working $50,000 or more 3 5
(91 percent). Incomplete income reporters 9 13 12 11
Housing
Reference person
Age (years)
Eighty-eight percent of rural elders and
65-69 29 30 20 21
75 percent of urban elders owned their
home. Women living alone were less 70-74 28 27 20 23
likely than other elders to own their 75 -79 20 21 18 23
homes, but still the majority were 80+ 23 22 42 33
owners (78 percent of rural women Race
and 61 percent of urban women). White 93 86 90 88
Black 6 9 10 9
Usually, these homes were detached, Other 5 0 3
single-family dwellings. In rural areas, Education
79 percent of elders lived in a detached Not high school graduate 59 43 62 43
home. Rural elders were more likely High school graduate 23 30 23 32
than their urban counterparts to live in Some college 18 27 15 25
detached homes or mobile homes and Work status
were much less likely to live in multiple Reports occupation 18 18 9 13
units. The pattern held true for rural
Retired, not working 82 82 91 87
women who lived alone. Three-quarters
of rural women living alone lived in Housing
detached, single-family dwellings, Housing tenure
whereas only half of urban women did. Own 88 75 78 61
Rent 12 25 22 39
Owning a detached, single-family home Type of home
affects the financial decisions of elders. Single family, detached 79 66 76 51
The equity of home ownership provides Multiple unit 12 29 15 44
financial security. Yet, the expense and Mobile home 14 5 9 5
effort associated with a single-family
1 Reference person 65 years or older.
22 Family Economics Review
Figure 1. Income 1 of all elderly consumer units and elderly
women who live alone, 1990-91
All elderly
consumer units
$16,743
$19,851
Elderly women
who live alone
$8,209
$11,869
D Rural DUrban
1For the 88 percent of consumer units that report their income.
dwelling may strain the resources of
some elders. The houses of rural elders
are often of lower market value than
those of urban elders. Also, they are
more likely to need repairs, and they
are larger-thus more expensive to heat
and maintain. In some rural communities,
the option of multiple units is not avail­able.
Personal preferences likely play a
part in housing decisions also.
Income of Rural Elderly
Households
Income
The income of elderly households in
rural areas was less than that of their
urban counterparts (fig. I). Rural house­hold
income reporters had an average
annual income of $16,743 or 84 percent
as much as the $19,851 reported by
urban households. This pattern was
more pronounced among women who
lived alone. Rural women had an average
income of $8,209, only 69 percent as
much as the $11 ,869 income of urban
women.
1994 Vol. 7 No.3
If income needs are similar in rural and
urban areas, rural elderly households
were disadvantaged relative to urban
households. It is not clear whether needs
are similar. Urban needs for income
may be greater than rural needs if the
cost of living is higher in urban areas.
It is widely believed that urban housing
costs are higher-at least in some areas.
However, differences in prices of such
commodities and services as health
care, automobiles, or food cannot be
easily verified.5 Rural families may
have greater transportation needs since
they travel greater distances to markets
and services. Also, rural families may
have fewer options available for housing,
health services, vehicles, or clothing
and so need to pay whatever locally
available products and services cost,
whereas urban families may have a
wider range of prices from which to
choose.
5The Federal Government does not publish
statistics that compare prices among cities,
regions, or rural areas; the Consumer Price Index
measures changes in prices since the base period
for each selected city, not differences among cities.
0
... among women
who lived alone[,]
Rural women had
an average income
of ... only 69 percent
as much as ... urban
women.
23
Table 2. Sources of income of rural and urban elderly units, 1990-91
Average income1
All Women living alone
Income source Rural Urban Rural Urban Rural
Before-tax income $16,743 $19,851 $8,209 $11,869 100
After-tax income 15,844 18,426 8,103 11,279
Social Security and 8,601 8,608 5,812 6,615 94
Railroad Retirement
Pensions and annuities 2,182 3,566 855 1,910 34
Interest and dividends 1,776 2,444 867 1,861 38
Earnings 3,859 4,770 404 1,108 25
Other 325 462 270 376 16
1 For the 88 percent of consumer units that reported their income.
Sources of Income
Social Security
There was little difference between
rural and urban elderly households in
the amount of Social Security they
received (table 2). About 95 percent of
each group had Social Security income
that averaged about $8,600 per house­hold.
This represented over half (51
percent) of rural household income
and about 43 percent of urban house­hold
income (fig. 2).
For elderly rural women living alone,
Social Security was an especially impor­tant
source of income. About 95 percent
of both rural and urban women received
Social Security; rural women averaged
$5,812 in Social Security income, and
urban women averaged $6,615. For
rural women, Social Security provided
71 percent of their total income. For
urban women, it was a smaller, though
still important, share of total income
(56 percent). Thus, policy decisions
regarding Social Security profoundly
affect the economic well-being of
elderly women, especially elderly
rural women.
24
Pensions and Annuities
Rural elders were less likely than urban
elders to receive pension or annuity
income. Thirty-four percent of rural
families received such income, compared
with 42 percent of urban families. The
average income from pensions or annuities
was $2,182 for rural elderly and $3,566
for urban elderly. This difference be­tween
rural and urban families was ex­pected
since the work histories differ.
Rural elders were more likely to have
been farmers, self-employed, or employed
in small businesses where pensions and
retirement plans are less prevalent than
in larger businesses, which are usually
located in urban areas. As expected,
women living alone were less likely
than other households to receive pension
and annuity income. Only one-fifth
of rural women received such income,
which provided an annual average of
$855.
Pensions and annuities provided 13
percent of rural and 18 percent of urban
household income. For elderly women
living alone, these sources provided 10
percent of rural and 16 percent of urban
women's income.
Percent receiving income
All Women living alone
Urban Rural Urban
100 100 100
95 96 95
42 21 34
40 27 35
29 5 15
15 21 16
Interest and Dividends
Interest and dividends from investments
were received by similar percentages
of rural and urban households, but the
average dollar amount was less for rural
households ($1,776 for rural and $2,444
for urban households). These sources
provided 11 and 12 percent, respectively,
of the annual income of rural and urban
households.
Again, rural women living alone were
different from other rural elders or urban
women living alone. Only 27 percent
received interest or dividend income,
and it averaged only $867, providing
11 percent of their income.
Besides the income implications, the
levels of interest and dividend income
reflect the level of assets owned by
households. The low interest and divi­dend
income for rural households (and
especially rural women living alone)
indicate that rural households had fewer
assets than urban households in saving
accounts, bonds, stocks, and other
investments.
Family Economics Review
Figure 2. Sources of income of elderly consumer units and
elderly women who live alone, 1990-91
%of income All elderly consumer units
Social Security
Pensions
and annuities
Interest and
dividends
Earnings
Other1
51
43
~~I
112 18
~~I
~a
I
I
D Rural
DUrban
Elderly women who live alone
Social Security 71r-------------------------~~----~
55~------~------~~~------~
Pensions
and annuities ~ ~ ~---1--------'----.
Interest and 1
16
1 ~--_.___,
dividends .
9
50_
Earnings c=:J
other
1 ~B
10ther sources include public funds and regular contributions from others.
Earnings
Earnings from employment, farm income,
business income, and rental units were
received by 25 percent of rural and 29
percent of urban elders. Such earnings
provided almost one-fourth of elders'
income (23 percent for rural and 24
percent for urban households).
For women living alone, earnings made
a more modest contribution. Only 5 per­cent
of rural and 15 percent of urban
women had earnings. These earnings
provided only 5 percent of rural women's
income and 9 percent of urban women's
mcome.
1994 Vol. 7 No.3
Expenditures
Expenditures may be a better measure
than income of economic well-being,
especially for retired people (2). When
elders draw on retirement savings to
provide for their needs and desires,
expenditures reflect this. Elderly house­holds
in rural areas spent 85 percent
as much as their urban counterparts
(table 3, p. 26). Rural elderly households
spent an average of $15,005 per year,
compared with $17,745 spent by urban
households. Rural women living alone
spent $9,215 or 79 percent as much as
their urban counterparts.
rnl
Elderly households
in rural areas spent
85 percent as much
as their urban
counterparts
25
- - ----------------------------------~ --
In rural and urban households, expendi­tures
were less than after-tax income.
However, women living alone spent
more than their income, which suggests
they are using savings to meet their
needs. Rural women's expenditures
totaled $9,215, somewhat more than
their $8,103 after-tax income. Urban
women spent $11,629, a little more than
their after-tax income of $11,279.
ln every expenditure category except
health care, rural households spent less
than urban households. Similarly, among
women who live alone, rural women
spent less than urban women in every
expenditure group except health care.
For women living alone, out-of-pocket
expenditures for health care may be
higher because the average age of
rural women was older-so their health
needs may have been greater.
Figure 3 shows the allocation of expendi­tures
among categories. Urban households
spent a larger share of their budget on
housing than did their rural counterparts.
Thi probably reflects higher housing
prices in urban areas. Urban homes had
fewer rooms than rural homes (5.3 rooms
in urban homes; 5.8 in rural). House­hold
size was about the same in urban
and rural households (1 .72 people in
urban hou eholds; 1.77 in rural), so
utilities and other expenses related to
household size did not explain the higher
expenditures of urban households.
Rural households spent a larger share of
their budget on transportation than did
urban households. They owned more
vehicles (1.9 vehicles in rural households;
I .4 in urban) and probably drove more
miles because of greater distances to
town, friends, or services.
Elderly women who lived alone had
different budgetary patterns than elderly
households as a whole. Both rural and
urban women spent a much larger pro­portion
on housing and a much smaller
share for transportation. Elderly women
owned 0.6 vehicles per household.
26
Table 3. Mean expenditures of rural and urban elderly consumer units,
1990-91
All e lder) ~ Women living alone
Expenditure Rural Urban Rural Urban
Total expenditures $ 15,005 $ 17,745 $9,215 $11 ,629
Housing 4,624 5,961 3,779 5,001
Food 2,883 3,307 1,626 2,037
Transportation 2,794 2,9 19 914 1,154
Health 2,151 2,118 1,549 1,484
Apparel 471 669 342 441
Entertainment 481 677 185 337
Personal care 156 249 98 194
Reading 122 143 74 103
Miscellaneous 1,323 1,702 648 878
Figure 3. Expenditure allocation of elderly consumer units and
elderly women who live alone, 1990-91
% of
expenditures All elderly consumer units
Housing 31 I I 34 . I
Food 19 19 ~
o Rural Transportation 19 16 I : [] Urban
Health 14 12 I
Other 17 ~ I
19 = l
Elderly women who live alone
Housing 41
43 f !
Food 18 18 [
Transportation 10 10 B
Health 17 13 ~
Other 14
16
Family Economics Review
There were no budget share differences
between rural and urban households
for food expenditures. Rural and urban
elderly households spent 19 percent for
food. Rural and urban women living
alone spent 18 percent of their budget
for food.
Summary
Rural elderly households had 84 percent
as much income as urban households. A
smaller percentage of rural households
than urban households received each
type of income: Social Security, pensions
and annuities, interest and dividends,
and earnings.
Particularly of note was that rural women
living alone had much lower income
and fewer sources of income than other
rural households or urban women living
alone. Their income was less than half
the average income of all rural house­holds.
Rural women's average income
was 69 percent of that of urban women
living alone.
Compared with other elderly groups
(rural households or urban females
living alone), rural women living alone
were far less likely to receive income
from any of the major sources other
than Social Security. Only 27 percent
received interest and dividends, 21 per­cent
had pensions or annuities, and 5
percent had earnings from employment
or farms/businesses they owned. Social
Security accounted for 71 percent of
their income, averaging about $5,800 a
year.
Expenditures of rural elderly are 85 per­cent
as much as those of urban elderly
households. Compared with urban
households, rural households spent a
larger proportion of expenditures on
transportation and health and a smaller
share for housing.
1994 Vol. 7 No.3
To reiterate, rural women living alone
were particularly vulnerable. Both rural
and urban women living alone spent
more than their after-tax income, indi­cating
they relied on savings to meet
their expenses. Over 40 percent of their
expenditures were on housing, leaving
little for other expenses. Rural women
spent 17 percent of their budget on
health expenditures, a larger share
than other households.
Implications
Government policies regarding Social
Security, health care plans, housing, and
other programs affecting elders need
to acknowledge the differences in
income sources and expenditure patterns
between rural and urban elderly house­holds.
Certainly, they must take into
account the special needs of rural women
who live alone.
References
Also, findings indicate a need for pre­retirement
education for rural house­holds.
The pension and annuity income
of rural elders was less than that of
urban elders, perhaps reflecting less
access to company-sponsored retire­ment
plans. Also, income from interest
and dividends was much lower, indicat­ing
less in savings and investments.
Rural people retiring in the future may
be different from the group reported
here. People in this study were born
in the first quarter of the century. The
inclusion of farmers in Social Security,
the growth of company-sponsored
retirement programs, and similar events
occurred fairly late in their work life.
Future groups may receive more pre­retirement
guidance and become more
conscious of the need for retirement
planning and saving.
1. Bull, C.N. and Bane, S.D. 1993. Growing old in rural America: New approach
needed in rural health care. Aging 365: 19-25.
2. Houthakker, H.S. and Taylor, L. 1970. Consumer Demand in the United States:
Analyses and Projections. Harvard University Press.
3. McLaughlin, O.K. and Jensen, L. 1993. Poverty among older Americans: The
plight of nonmetropolitan elders. Journal of Gerontology 48(2):S44-S54.
4. Taeuber, C.M. 1992. Sixty-Five Plus in America. Current Population Reports,
Special Studies. P23-178. U.S. Department of Commerce, Bureau of the Census.
5. U.S. Department of Health and Human Services, Administration on Aging. 1993.
Van Nostrand, J.E. (Ed.). 1993. Common beliefs about the rural elderly: What do
national data tell us? Vital and Health Statistics 3(28). U.S. Department of Health
and Human Services, National Center for Health Statistics.
6. U.S. Department of Labor, Bureau of Labor Statistics. Consumer Expenditure
Surveys: 1990 and 1991 Interview Survey Public Use Tapes and Documentation.
27
28
Trends in Tobacco Use
By Joan C. Courtless
Family Economist
Family Economics Research Group
Scientific knowledge regarding the medical consequences of smoking is
constantly expanding and over time, a significant reduction in U.S. smoking
prevalence and consumption has occurred. Findings from recent Federal
surveys are used to describe trends in tobacco use. Among U.S. adults,
per capita consumption of cigarettes has declined by 38 percent since
1960. As measured in the Consumer Expenditure Surveys, mean annual
household expenditure for tobacco products and smoking supplies, in 1992
dollars, decreased by 49 percent between 1980 ($534) and 1992 ($275).
Nevertheless, one in four Americans 12 years old and older and one in
three young adults, ages 18 to 34, were current smokers in 1992. Smoking
prevalence decreases as educational level increases. People with a college
education were more likely than those with less education to quit smoking.
Programs designed to reduce smoking should focus on adolescents and
those less educated. Regulations restricting smoking in public places and
added excise taxes have proven effective in curtailing smoking.
igarette smoking is the
leading cause of preventable
illness and death in the
United States (3,11, 12).
Smoking has been recognized as a
serious public health problem for over
30 years, particularly since the Surgeon
General 's first report on smoking and
health in 1964 (1 2,25). Since then,
research has expanded our knowledge
about the consequences of smoking.
Prevention programs and regulatory
policies that inhibit smoking have
focused public attention so that smok­ing
is no longer widely tolerated and
smokers are increasingly isolated in
public places.
In this time of rising health care costs,
it seems illogical to ignore the medical
facts concerning tobacco use. The reality,
however, is that millions of Americans
do ignore them to smoke billions of
cigarettes each year. Their own health
is compromised, and the well-being of
those around them is at risk.
This article presents findings from vari­ous
Federal sources and national surveys
that describe trends in (1) tobacco con­sumption;
(2) characteristics of people
who smoke, formerly smoked, or use
smokeless tobacco; and (3) prices and
expenditures for tobacco. The conse­quences
of passive or environmental
smoke are examined, together with
health costs related to smoking.
Consumption of Tobacco and
Tobacco Products
The Economic Research Service (ERS)
of the U.S. Department of Agriculture
(USDA) estimates total and adu lt per
capita consumption of cigarettes based
on data from the U.S. Department of
Treasury-Bureau of Alcohol, Tobacco,
and Firearms, the U.S. Department
of Commerce, the Tobacco Institute,
and other private and industry sources.
Adult per capita consumption in the
United States is calculated by dividing
Family Economics Review
total estimated consumption by the total
estimated population 18 years of age
and older.
According to ERS, adult per capita
consumption of cigarettes in the United
States has declined by 38 percent since
1960. Peak consumption during this
period occurred in 1963 at 4,345 ciga­rettes
per annum (fig. 1) (16,25). Per
capita consumption in 1993 was esti­mated
to be 2,576 cigarettes, the lowest
since 1941 (4,16). U.S. consumption of
cigarettes in 1993 was estimated at 489
billion cigarettes, a 19-percent decrease
from the 600.4 billion smoked in 1984
(15).
Other forms of tobacco are used in
lesser quantities and, with the exception
of snuff, are declining in use. ERS con­sumption
data show that consumption
of snuff (a type of smokeless tobacco)
increased by 11 percent between 1984
and 1993 (16). For some consumers,
snuff may be a substitute for smoking
and reflect the restrictions placed on
smoking in public places (4). Consump­tion
of other tobacco products, however,
has declined over the 10-year period:
large cigars and cigarillos, by 43 per­cent;
smoking tobacco, by 54 percent;
and chewing tobacco, by 34 percent (16).
Characteristics of
Tobacco Users
Current Smokers
Prevalence of tobacco use is usually
expressed in terms of current use. The
National Household Survey on Drug
Abuse (NHSDA) conducted by the
Substance Abuse and Mental Health
Services Administration, U.S. Depart­ment
of Health and Human Services
defines smoking as any use in the past
month. The National Health Interview
Survey (NHIS), Health Promotion and
Disease Prevention (HPDP) supplement
conducted by the National Center for
Health Statistics, U.S. Department of
Health and Human Services defines
1994 Vol. 7 No.3
Figure 1. Annual per capita consumption 1 of cigarettes, 1960-93
Thousands
1For those 18 years and over, including Armed Forces abroad.
Note: For 1992, figures are subject to revision; for 1993, figures are estimated.
Source: U.S. Department of Agriculture, Economic Research Service, Tobacco Situation and
Outlook Report.
current smokers as those who have
smoked over 100 cigarettes in their
lifetime and answer that they currently
smoke.
According to the 1992 NHSDA, 26
percent of the population age 12 and
over or about 54 million people smoked
tobacco in the past month (table 1, p. 30).
This was a decline from 1988 when 29
percent of the population or 57 million
people identified themselves as current
smokers. Young adults, ages 18 to 34,
had the highest rates of smoking: 34
percent of the 26- to 34-year-olds and
32 percent of the 18- to 24-year-olds
smoked in the past month (19).
The higher the educational level, the
less likely that a person was currently
smoking cigarettes (19). Educational
status has replaced gender as the demo­graphic
variable most likely to predict
differences in smoking prevalence (3).
Those who were unemployed were more
likely to be current smokers (43 percent)
than any other demographic segment of
the population (19). Hispanics were less
likely to be current smokers (22 percent)
than non-Hispanics (27 percent). People
living in nonmetro areas were more
likely than those in metro areas to have
smoked cigarettes in the past month.
Decreases in the proportion of current
smokers since 1988 were evident except
among people in the Western region
and tho e with some college education.
Most States have set the minimum
age to purchase cigarettes at 18 years.
Nevertheless, more than 3,000 American
teenagers start smoking each day (25),
and according to the 1989 Teenage
Attitudes and Practices Survey, 57.5
percent of those 12 to 17 years old
report buying their own cigarettes (22).
Female adolescents are as likely as
males to smoke cigarettes (1, 7, II).
According to McDermott et al. (1 1),
cigarette smoking may be the most
practical and visible means females
have to rebel.
29
--- --~
An annual survey of high school
eniors, college students, and young
adults--called Monitoring the Future:
A Continuing Study of the Lifestyles
and Values of Youth-is conducted
by the University of Michigan Institute
for Social Research and sponsored by
the National Institute on Drug Abuse
(NIDA), U.S. Department of Health
and Human Services. Findings from the
1990 survey determined that 29 percent
of high school seniors in 1990 smoked
in the past month (7,8). There is little
indication that the overall percentage
of high school seniors who smoke is
decreasing. During the period 1980-90,
29 to 30 percent of these students each
year reported smoking in the past month
(fig. 2). Of seniors surveyed, 19 percent
were daily smokers in 1990, 64 percent
had smoked cigarettes at one time, and
41 percent had tried smoking before the
ninth grade (7).
Another analysis of teenage cigarette
consumption, using National Health and
Nutrition Survey II data, determined
that cigarette smoking was negatively
related to both family income and
parental education (30). However,
because parental smoking behavior
was also negatively related to these
variables, children of poorly educated
adults may be more likely to smoke
because their parents were more likely
to smoke-not because of parents'
socioeconomic status.
According to the 1990 Monitoring the
Future survey, 25 percent of seniors
planning to attend college for 4 years
were current smokers, compared with
38 percent of those with no such plans
(7). Students already attending college
were less likely to be current smokers;
22 percent reported smoking in the past
month. This was a decline from 1980
when 26 percent reported smoking (8).
Of college students, 12 percent were
daily smokers, compared with 27 per­cent
of high school graduates of similar
age who were not in college full time.
College women were more likely to
smoke than college men (8).
30
Table 1. Use of cigarettes in the past month by demographic
characteristics, 1988 and 1992
Demographic characteristic
Total, 12 years and older
Age (years)
12- 17
18- 25
26-34
35 and older
Sex
Male
Female
Education
Less than high school
High school graduate
Some college
College graduate
Race and ethnicity
Non-Hispanic White
Non-Hispanic Black
Hispanic
Population density
Large metro
Small metro
Nonmetro
Region
Northeast
North Central
South
West
Current employment
Full time
Part time
Unemployed
Other1
1
Retired, disabled, homemaker, student, or other.
1988
Percent
28.8
11.8
35.2
37.1
27.3
32.2
25.6
38.4
33.9
27.3
17.4
28.7
30.3
26.3
28.2
28.1
30.8
29.3
29.6
31.1
22.9
33.0
29.1
50.5
24.8
1992
26.2
9.6
31.9
33.7
25.3
27.9
24.6
35.1
30.2
28.5
16.3
26.9
26.7
21.5
25.0
26.6
27.8
24.8
25.5
28.5
24.4
29.7
27.3
43.3
22.4
Source: U.S. Depanment of Health and Human Services, Substance Abuse and Mental Health Services
Administration, National Household Survey on Drug Abuse.
Family Economics Review
Figure 2. P~evalence of smoking cigarettes in last 30 days, high
school semors and college students, 1980-90
Percent
40
High school seniors
/
30 -----··--~-.---~·~----~-~--~·~---------·._-•- ~--~•~ ----·
20 /
College students
10
0 1~9~80~~8~1~~82~- ~8~3~~84~~8~5--~8~6~~87=-~8=8---8=9~~9~0
Source: Johnston, L.D., O'Malley, P.M., and Bachman, J.G., 1991, Drug Use Among American
High School Seniors, College Students and Young Adults, 1975-1990, Volume I High School
Seniors and Volume II College Students and Young Adults, The University of Michigan Institute
for Social Research and U.S. Department of Health and Human Services, National Institute on
Drug Abuse.
Former Smokers
Although it is sometimes difficult for an
individual to be certain he or she has
permanently stopped smoking, survey
data may be used to ascertain trends in
"quitting" for various segments of the
population. According to findings from
the 1991 NHIS-HPDP, an estimated
89.8 million adults (49.8 percent of all
adults) in the United States have smoked
at one time (21). About 43.5 million
people ( 48.5 percent of those who have
ever smoked) had quit smoking. A
higher proportion of men (51.6 percent)
than women (44.7 percent) had stopped
smoking. Quit ratios (the proportion of
former smokers among those who have
ever smoked) increased as education
increased from 41.8 percent for those
with less than 12 years to 66.1 percent
for those with 16 or more years of
education (21). A separate analysis of
the 1990 NHIS-HPDP found highest
rates of former smokers among those
employed in executive or professional
occupations (12).
1994 Vol. 7 No.3
Table 2, p. 32, shows the percentages of
former smokers among those who have
ever smoked have increased since 1970
(25). Highest quit ratios were reported
by people 45 years and older, Whites,
and college graduates. Young people
exhibit a relatively low quit ratio. Among
high school seniors surveyed in 1990,
only 18 percent of those who ever smoked
regularly had stopped smoking (7).
Smokeless Tobacco Users
The NHSDA estimated that 7.5 million
Americans or 3.7 percent of the popula­tion
were current (in past month) users
of smokeless tobacco in 1992 (table 3,
p. 32). People with the highest rates of
smokeless tobacco use were White,
living in the South, and men (19). In
fact, 90 percent of smokeless tobacco
users were men (19,20). Although the
prevalence of cigarette smoking among
the U.S. population 12 years and older
declined somewhat between 1988 and
1992, use of smokeless tobacco has
remained fairly constant (19).
• Educational status
has replaced gender
as the demographic
variable most likely
to predict differences
in smoking prevalence.
31
··-
The 1991 NHIS-HPDP also collected
data concerning snuff and chewing­tobacco
use. Current users of smokeless
tobacco are defined in the NHIS-HPDP
as those who reported snuff or chewing­tobacco
use at least 20 times and who
reported using snuff or chewing tobacco
at the time of the interview. In 1991,
men (5.6 percent) were much more
likely to use smokeless tobacco than
women (0.6 percent) (table 4) (20). For
men, prevalence was highest among
those who lived in rural areas (11.2
percent), who lived in the South (8.4
percent), who were 18 to 24 years old
(8.2 percent), were American Indian/
Alaskan Native (8.1 percent), or who
had less than 12 years of schooling
(7 .7 percent). For women, prevalence
was highest among those who were
American Indian/Alaskan Native (2.5
percent), Black (2.3 percent), age 75
and older (2.3 percent), or had less than
12 years of schooling (2.0 percent).
Prices and Expenditures
Prices for tobacco and smoking products,
as measured by the Consumer Price
Index (CPI), have risen faster than
prices for all items, increasing at an
average annual rate of 9 percent since
1980 (fig. 3, p. 34) (27). In August 1993,
cigarette manufacturers reduced prices
of premium-branded cigarettes by about
one-fourth. Prices for discount brands
(about 36 percent of the domestic
market) were already relatively low,
selling for about half what premium
brands formerly cost (16,17).
Federal and State taxes on tobacco
continue to rise. The Federal excise
tax increased by 4 cents a pack in 1993
after having increased by 4 cents in
1991. In 1993, the Federal excise tax
on cigarettes was 24 cents per pack and
the weighted average State tax was 25.9
cents (16). Since 1968, every State and
D.C. has taxed cigarettes (25). As a per­centage
of the total cost of cigarettes,
however, taxes have declined (23).
32
Table 2. The quit ratio: Percentage of people who have smoked at one
time but no longer do so, by demographic characteristics, selected years
Demographic characteristics
Age (years)
20-24
25-44
45 - 64
65 and older
Sex
Male
Female
Education
Less than high school
High school graduate
Some college
College graduate
Race
White
Black
1970
20.8
29.8
36.1
56.9
37.9
29.2
38.1
33.6
34.9
48.2
36.7
23.2
1980
Percent
22.2
33.0
40.9
61.0
41.5
34.0
39.4
36.5
40.6
48.7
40.4
27.7
1988
27.5
36.8
52.8
69.8
47.3
43.4
46.3
41.6
46.4
60.6
48.0
32.8
Source: U.S. Department of Commerce, Bureau of the Census, 1992, Statistical Abstract of the United
States, 1992, [/12th ed.]
Table 3. Use of cigarettes and smokeless tobacco in the U.S. population
12 years and older: Past month, past year, and lifetime, 1988 and 1992
Substance
Cigarettes Smokeless tobacco
Period 1988 1992 1988 1992
Percent
Past month 28.8 26. 2 3.6 3.7
Past year 34.2 31.2 5.0 5.0
Lifetime 75.1 71.0 14.9 14.7
Source: U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services
Administration, National Household Survey on Drug Abuse.
Family Economics Review
Table 4. Current use1 of smokeless tobacco, 1991 National Health
Interview Survey-Health Promotion and Disease Prevention
Supplement, 1991
Characteristic Men Women
Percent
Total, 18 years and older 5.6 0.6
Age group (years)
18-24 8.2 0.2
25-44 5.8 .I
45-64 3.6 .6
65-74 5.4 1.3
?:.75 5.8 2.3
Education (years)
Less than high school 7.7 2.0
High school graduate 6.6 .3
Some college 5.2 .I
College graduate 2.5 0
Race
White 6.2 .3
Black 2.2 2.3
Asian/Pacific Islander 1.4 0
American Indian/Alaskan Native2 8.1 2.5
Ethnic origin
Hispanic 1.5 .2
Non-Hispanic 5.9 .6
Type of area
Urban 4.0 .3
Rural 11.2 1.5
Region
Northeast 2.7 0
Midwest 5.7 .2
South 8.4 1.4
West 4.0 .2
Poverty status3
At/above poverty level 5.4 .3
Below poverty level 6.6 1.9
Unknown 6.4 1.5
I
2Snuff or chewing-tobacco use at least 20 times and use at time of interview.
3Estimates should be interpreted with caution because of the small number (n=339) of cases.
Poverty statistics are based on definitions developed by the Social Security Administration that
include a set of income thresholds that vary by family ize and composition.
Source: U.S. Departmenr of Health and Human Services, Public Health Sen•ice, 1993, Use of smokeless
tobacco among adults-United States, 1991, Morbidity Mortality Weekly Report42( 14):263-266.
1994 Vol. 7 No.3
It has been shown (10,13,25,30) that
the demand for cigarettes is somewhat
responsive to price changes. Additional
taxes on cigarettes could benefit State
and Federal treasuries while reducing
demand. The larger the increase in price
as the result of taxes, the larger the de­crease
in consumption (1 3); a relatively
small increase in price through taxing
would be ineffective in substantially
reducing cigarette consumption (30).
Price changes have a stronger effect on
smoking prevalence than on consump­tion
by smokers. Teenagers are particu­Iru
·Iy responsive to changes in cigarette
prices; therefore, excise tax increases
may help impede the onset of teenage
smoking (25).
Since 1980, when the average annual
expenditure for tobacco products and
smoking supplies was $534 (in 1992
dollars), spending on tobacco by house­holds
has declined by 49 percent (fig. 4,
p. 34) (26). Data from the 1992 Con­sumer
Expenditure Survey show that
the mean annual expenditure for tobacco
products and smoking supplies was $275
(table 5, p. 36).
For 1992, tobacco products and smok.i ng
supplies accounted for about I percent
of total expenditures for all household
(26). Households with incomes between
$30,000 and $70,000 spent more on
tobacco than did those with lower or
higher incomes. However, the percentage
of total expenditures spent on tobacco
was higher in lower income households
than in those earning higher incomes.
Households reporting the highest
expenditures for tobacco were headed
by someone working as an operator,
fabricator, or laborer; in construction or
mechanics; in a service occupation; 35
to 54 years old; were husband-and-wife
households with children; and located
in a rural area. Some of these same
hou eholds spent the highest percentage
of total annual expenditures on tobacco:
Those headed by someone employed
as an operator, fabricator, or laborer; in
construction or mechanics; in a service
33
occupation; and those located in a rural
area. Also, households that rented their
homes or had a reference person under
25 years old spent a higher proportion
of total expenditures on tobacco than
did other household .
Passive Smoking
Passive smoking has been defined as
the exposure of nonsmokers to tobacco
combustion products in the indoor
environment and is also known as ETS­environmental
tobacco smoke. Passive
smoking is the third leading preventable
cause of death in the United States, after
smoking and alcohol (9). Secondhand
smoke kills 53,000 nonsmokers every
year (9); the nonsmoker' risk for lung
cancer resulting from chronic ETS
exposure is 100 times greater than the
risk associated with 20 years' exposure
to asbestos in a building containing
asbestos (14). ETS is a major cause
of indoor air pollution.
Secondhand smoke is designated as
either mainstream (drawn through a
cigarette, filtered by a smoker's lungs,
and exhaled into the air) or sidestream
(circulates directly in air from smoldering
end of cigarettes between puffs; also, all
ETS from cigars and pipes) (9). About
80 percent of ETS is sidestream (31).
The Environmental Protection Agency
has classified sidestream smoke a Class
A (cancer causing, very hazardous)
carcinogen (9). The Surgeon General
has determined that ETS is a cause of
lung cancer (3 1).
Exposure to ETS contributes to decreased
pulmonary function, decreased heart
function, eye and throat irritation, respi­ratory
illness, lung and other cancers,
and aggravated allergies (9,31).
Regulations restricting smoking in public
places have had a significant negative
effect on cigarette demand (30). These
regulations limit opportunities to smoke,
thereby ensuring nonsmokers protection
again t passive smoking (see box).
34
Figure 3. Changes in consumer prices for tobacco and smoking
products
CPI-U
250
225
200
175
150
125
100
75
50
1980 84
Tobacco and
smoking products .""
88
All items
92 93
Source: US. Department of Labor, Bureau of Labor Statistics, CPI Detailed Report.
Figure 4. Average annual household expenditure for tobacco
products and smoking supplies, 1980-92
Constant 1992$
600
500
400
300
200
100
0 1~9780~-----~8~4------~878------~9~2
Source: US. Department of Labor, Bureau of Labor Statistics, Consumer Expenditure Survey.
Family Economics Review
Legislation and Regulations Related to Smoking and Health
(5,16,25,29)
1965 - Congress passes the Federal Cigarette Labeling and Advertising Act,
requiring health warning on all cigarette packages: "Caution: Cigarette
Smoking May be Hazardous to Your Health."
1970 - Congress enacts the Public Health Cigarette Smoking Act of 1969 (passed
in 1970 and effective January 2, 1971 ), banning cigarette advertising on
television and radio and requiring a stronger health warning on cigarette
packages: "Warning: The Surgeon General Has Determined that Cigarette
Smoking is Dangerous to Your Health."
1973 - Civil Aeronautics Board requires no-smoking sections on all commercial
airline flights.
- Arizona becomes the first State to restrict smoking in a number of public
places and the first to do so explicitly because environmental tobacco
smoke exposure is a public health hazard.
1974 - Connecticut passes the first State law to apply smoking restrictions to
restaurants.
1975- Minnesota passes landmark comprehensive statewide clean indoor air law.
1976 - Interstate Commerce Commission prohibits smoking in railroad dining
cars and requires separate smoking and nonsmoking passenger cars.
1978 - Utah enacts the first State law banning tobacco advertisements on any
billboard, streetcar sign, streetcar, or bus.
1982- Congress temporarily doubles the Federal excise tax on cigarettes to 16
cents per pack, to be in effect January 1, 1983, to October 1, 1985. First
increase since 1951.
1984 - Congress enacts the Comprehensive Smoking Education Act, requiring
rotational health warnings on cigarette packages and advertisements.
1986 - Congress enacts the Comprehensive Smokeless Tobacco Health Education
Act of 1986. Requires rotation of three health warnings on smokeless
tobacco packages and advertisements and bans smokeless tobacco
advertising on broadcast media.
- Congress extends permanently the 16 cents per pack Federal excise tax
on cigarettes.
- Congress imposes a Federal excise tax on smokeless tobacco products.
1988 - Congressionally mandated smoking ban takes effect on domestic airline
flights scheduled for 2 hours or less.
1990 - Interstate Commerce Commission bans smoking on all regularly
scheduled interstate buses in the United States.
- Congressionally mandated smoking ban extended to flights of 6 hours or
less, effectively eliminating smoking on flights within the 48 contiguous
States.
1991 - Congress increases Federal excise tax on a pack of cigarettes to 20 cents.
1993 - Congress increases Federal excise tax on a pack of cigarettes to 24 cents.
1994- U.S. Department of Defense bans smoking in all military workplaces,
effective April 8, 1994.
1994 Vol. 7 No.3
Since 1980, ...
spending on tobacco
by households has
declined by 49 percent.
35
Table 5. Average annual expenditures for tobacco products and
smoking supplies, by demographic characteristics, 1992
Percentage of
total annual
Characteristic Mean dollars expenditures
All households $275 0.9
Income
<$10,000 209 1.7
$10,000- $19,999 263 1.4
$20,000- $29,999 297 1.1
$30,000 - $39,999 322 1.0
$40,000- $49,999 322 .8
$50,000- $69,999 342 .7
$70,000 and over 253 .4
Composition of household
Husband and wife only 253 .8
Husband, wife with children 322 .8
Single parent (at least one child under age 18) 245 1.2
Housing tenure
Homeowner 274 .8
Renter 277 1.3
Type of area
Urban 268 .9
Rural 319 1.3
Head of household
Age (years)
<25 220 1.3
25-34 278 .9
35-44 326 .9
45-54 376 1.0
55-64 310 1.0
65-74 205 .9
75 and over 77 .4
Race
White and other 282 .9
Black 219 l.l
Occupation
Self employed 270 .7
Managers and professionals 216 .5
Technical, sales, and clerical 287 .9
Service 320 1.4
Construction/mechanics 415 1.4
Operators, fabricators, laborers 419 1.5
Retired 154 .8
Source: U.S. Department of LAbor, Bureau of LAbor Statistics, /992 Consumer Expenditure Survey,
unpublished data.
36
Also, restrictive regulations have rein­forced
the concept that smoking in
public is a health hazard for nonsmokers
and that involuntarily exposing others is
socially unacceptable.
Restrictions on smoking in the work­place
are especially important because
employed people spend more time at
work than in other public places (28).
Therefore, a smoke-free work environ­ment
can provide more protection to
nonsmokers than any other smoking
restrictions or regulations. There are
potential health benefits for smokers as
well. A ban on smoking at a person's
usual workstation reduces workday
cigarette consumption, compared with
non-workday consumption. With no ban
on smoking at the usual workstation,
an Australian study found no difference
between workday and non-workday
cigarette consumption (28).
Health Costs Related to Smoking
One in five deaths in the United States-
435,000 annually-are caused by smoking
(3). Over 80 percent of all U.S. lung
cancer deaths and 30 percent of all
deaths from cancer can be attributed to
smoking (12,25). Also, over 20 percent
of cardiovascular deaths result from
smoking, accounting for an even greater
number of deaths than those from lung
and other cancers caused by smoking
(25).
Smokers have higher death rates than
neversmokers at all ages over 35 years
(6). Health costs for smokers are higher
than those for neversmokers at every
age. Over a 95-year lifetime, male
smokers average $8,638 in additional
lifetime medical expenditures or 32
percent more than neversmokers, and
female smokers average an additional
$1 0, 119 or 24 percent more ( 1990
dollars) (table 6). Heavy smokers (more
than 25 cigarettes per day) average 47
percent higher expenditures than never­smokers
if male and 41 percent higher
if female (6).
Family Economics Review
Manning et al. estimated societal costs
related to smoking (but not including
the value of lives lost to passive smok­ing
and to fires caused by smoking) and
concluded that nonsmokers subsidize
smokers' medical care and group life
insurance, but smokers subsidize non­smokers'
pensions and nursing home
payments-because nonsmokers can
expect to live longer (10). For smokers,
loss in life expectancy was estimated at
28 minutes per pack of cigarettes. Thus,
people who smoke a pack a day shorten
their lives by 7 days for every year they
continue smoking at this rate.
Implications
Recent trends in smoking prevalence
indicate men are more likely than
women to quit smoking, as are Whites
compared with Blacks, and college
graduates compared with those with
less education. Cigarette smoking is
becoming a behavior observed most
frequently among the poorly educated
and socioeconomically disadvantaged
segments of society (3).
Data from the NHIS were used by the
Office on Smoking and Health in the
U.S. Department of Health and Human
Services to project smoking rates among
adults age 20 and over for the year 2000
(table 7) (3). Although smoking rates
are projected to decline for most seg­ments
of our society, the percentage
of female smokers will decrease more
slowly than the percentage of male
smokers, and the prevalence rate among
people with a high school education or
less is projected to decline only slightly.
Each year, a million young people take
up smoking and commit the health care
system to $8.2 billion in extra medical
costs over their lifetimes (6). Both regu­latory
actions and increased excise
taxes have been shown to be effective
in curtailing prevalence and consump­tion
of cigarettes, especially among
teenagers.
Because teenagers experience little diffi­culty
in buying cigarettes-even though
in most States it is illegal until age 18,
more active surveillance of retailers and
substantial penalties for noncompliance
Table 6. Lifetime medical expenditures 1 by sex and smoking status
Sex
Males
Lifetime expenditures
Excess2 expenditures
Ratio to neversmokers
Females
I
Lifetime expenditures
Excess2 expenditures
Ratio to neversmokers
Neversmokers
$27,276
$0
1.00
$42,783
$0
1.00
All smokers
$35,914
$8,638
1.32
$52,902
$10,119
1.24
Heavy smokers
$40,187
$12,911
1.47
$60,347
$17,564
1.41
2 Valu.es are in 1990 dollars. . . . .
Med1cal expenditures incurred by smokers m add1uon to tho e mcurred by neversmokers.
Source: Hodgson, T.A. , 1992, Cigarelle smoking and lifetime medical expenditures, The Milbank
Quarterly 70( I ):81-125.
1994 Vol. 7 No.3
Table 7. Projected smoking rates
among adults 20 years and older
for the year 2000
Smoking
Characteri tics prevalence rate
Overall 21.7
Women 22.7
Men 19.9
Black 24.5
White 21.5
College graduate 5.0
Some college 16.0
High chool graduate 30.0
High school dropout 31.0
Source: Fiore, M.C. , / 992, Trends in cigarelle
smoking in the United States, the epidemiology
of tobacco use, The Medical Clinics of North
America 76(2):289-303.
would be needed to achieve more effec­tive
control (22). One of the national
health objectives for the year 2000 sets
a nationwide goal to enact and enforce
State laws prohibiting the sale and distri­bution
of tobacco products to youth less
than 19 years old (22,24). Another ob­jective
targets special population group
for the reduction of smoking prevalence
including Blacks, Hispanics, American
Indians/Alaskan Natives, and Southeast
Asian men (21,24).
The greate t impact from interventions
could be achieved by focusing on ado­lescents
and those less educated (2,3).
School systems throughout the Nation
would need to integrate programs into
their health curricula that educate
students about the hazards of smoking
and the addictive properties of tobacco.
37
38
References
1. Bachman, J.G., et al. 1991. Racial/ethnic differences in smoking, drinking, and
illicit drug use among American high school seniors, 1976-89. American Journal of
Public Health 81(3):372-377.
2. Blaylock, J.R. and Blisard, W.N. 1992. U.S. cigarette consumption: The case of
low-income women. American Journal of Agricultural Economics 74(3):698-705.
3. Fiore, M.C. 1992. Trends in cigarette smoking in the United States. The
epidemiology of tobacco use. The Medical Clinics of North America 76(2):289-303.
4. Grise, V.N. 1993. Outlook for U.S. Tobacco. U.S. Department of Agriculture,
Economic Research Service.
5. Grise, V. 1992. Cigarette market is changing. Agricultural Outlook. May issue,
pp. 17-20.
6. Hodgson, T.A. 1992. Cigarette smoking and lifetime medical expenditures. The
Milbank Quarterly 70(1):81-125.
7. Johnston, L.D., O'Malley, P.M., and Bachman, J.G. 1991. Drug Use Among
American High School Seniors, College Students and Young Adults, 1975-1990.
Volume I. High School Seniors. The University of Michigan Institute for Social
Research and U.S. Department of Health and Human Services, National Institute
on Drug Abuse.
8. Johnston, L.D., O'Malley, P.M. , and Bachman, J.G. 1991. Drug Use Among
American High School Seniors, College Students and Young Adults, 1975-1990.
Volume II. College Students and Young Adults. The University of Michigan
Institute for Social Research and U.S. Department of Health and Human Services,
National Institute on Drug Abuse.
9. Lesmes, G.R. and Donofrio, K.H. 1992. Passive smoking: The medical and
economic issues. The American Journal of Medicine, Volume 93 (supplement lA),
July 15 issue, pp. JA-38S-42S.
10. Manning, W.G., et al. 1989. The taxes of sin. Do smokers and drinkers pay
their way? Journal of American Medical Association 261 (11): 1604-1609.
11. McDermott, R.J., et al. 1992. Multiple correlates of cigarette use among high
school students. Journal of School Health 62(4): 146-150.
12. Metropolitan Life Insurance Company. 1992. Cigarette smoking among U.S.
adults, 1985-1990, and smoking among selected occupational groups, 1990.
Statistical Bulletin 73(4): 12-19.
13. Peter on, D.E., et al. 1992. The effect of State cigarette tax increases on
cigarette sales, 1955 to 1988. American Journal of Public Health 82(1):94-96.
14. Peto, J. and Doll, R. 1986. Guest editorial: Passive smoking. British Journal of
Cancer 54:381-383.
15. U.S. Department of Agriculture, Economic Research Service. 1993. Tobacco
Situation and Outlook Report. TS-225.
Family Economics Review
16. U.S. Department of Agriculture, Economic Research Service. 1993. Tobacco
Situation and Outlook Report. TS-224.
17. U.S. Department of Agriculture, Economic Research Service. 1993. Tobacco
Situation and Outlook Report. TS-222.
18. U.S. Department of Commerce, Bureau of the Census. 1992. Statistical Abstract
of the United States, 1992. [!12th ed.]
19. U.S. Department of Health and Human Services, Public Health Service. 1993.
Preliminary Estimates From the 1992 National Household Survey on Drug Abuse.
Advance Report Number 3.
20. U.S. Department of Health and Human Services, Public Health Service. 1993.
Use of smokeless tobacco among adults-United States, 1991. Morbidity and
Mortality Weekly Report42(14):263-266.
21. U.S. Department of Health and Human Services, Public Health Service. 1993.
Cigarette smoking among adults-United States, 1991. Morbidity and Mortality
Weekly Report 42(12):230-233.
22. U.S. Department of Health and Human Services, Public Health Service. 1992.
Accessibility of cigarettes to youths aged 12-17 years-United States, 1989.
Morbidity and Mortality Weekly Report 41(27):485-488.
23. U.S. Department of Health and Human Services, Public Health Service. 1992.
Strategies to Control Tobacco Use in the United States: A Blueprint for Public
Health Action in the 1990's. Smoking and Tobacco Control Monograph #1
(NIH)92-3316.
24. U.S. Department of Health and Human Services, Public Health Service. 1991.
Healthy People 2000: National Health Promotion and Disease Prevention
Objectives. DHHS Publication No. (PHS)91-50212.
25. U.S. Department of Health and Human Services, Public Health Service. 1989.
Reducing the Health Consequences of Smoking: 25 Years of Progress. A Report of
the Surgeon General. DHHS Publication No. (CDC)89-8411.
26. U.S. Department of Labor, Bureau of Labor Statistics. 1992 Consumer
Expenditure Survey. Unpublished data.
27. U.S. Department of Labor, Bureau of Labor Statistics. 1981-1993. CPI Detailed
Report. January issues.
28. Wakefield, M.A., eta!. 1992. Workplace smoking restrictions, occupational
status, and reduced cigarette consumption. Journal of Occupational Medicine 34
(7):693-697.
29. The Washington Post. 1994. Military gets smoking ban order. March 9 issue.
30. Wasserman, J., et al. 1991. The effects of excise taxes and regulations on
cigarette smoking. Journal of Health Economics 10:43-64.
31. Wood, S.L. and White, G.L. 1991. Health hazards of passive smoking: A
review. Journal of Health Education 22(5):303-306.
1994 Vol. 7 No.3 39
40
------------------
Research Summaries
Housing Vacancies
and Home
Ownership
The monthly Current Population Survey/
Housing Vacancy Survey, conducted by
the Bureau of the Census, U.S. Depart­ment
of Commerce, provides estimates
and characteristics of occupied and
vacant housing units. A housing unit
(house, apartment, group of rooms, or
single room occupied or intended for
occupancy as separate living quarters)
is classified as occupied if a person or
group of people is living in it at the time
of the interview or if the occupants are
only temporarily absent; otherwise the
housing unit is classified as vacant.
Housing Vacancies
In 1992, national vacancy rates were
7.4 percent for rental housing and 1.5
percent for homeowner housing. The
homeowner vacancy rate was lower
than the 1991 rate of 1.7 percent, while
the rental vacancy rate did not change.
The vacancy rate was highest in central
cities (8.3 percent for rental housing
and 1.8 percent for homeowner housing)
and lowest in suburbs (6.4 percent for
rental housing and 1.4 percent for home­owner
housing). By region of the country,
the South had the highest rental vacancy
rate (8.2 percent) and the Midwest had
the lowest (6.7 percent). The home­owner
vacancy rate was highest in the
West ( 1.9 percent) and lowest in the
Midwest (1.2 percent).
Figure 1. Home ownership rates, by State: 1992
Less than 62.0 percent
62.0 to 66.9 percent
• 67.0 to 69.9 percent
• 70.0 percent and higher
Source: Callis, A.A., 1993, Housing Vacancies and Homeownership Annual Statistics: 1992,
Current Housing Reports, Series H111/92-A, U.S. Department of Commerce, Bureau of the
Census.
Family Economics Review
Figure 2. U.S. home ownership rates, by age of householder:
1982 and 1992
Percent
100
80
60
40
20
Ol.-.-::J..__---.,­Less
than 35 55 to 64
01982
• 1992
Age of householder (years)
Source: Callis, R.R., 1993, Housing Vacancies and Homeownership Annual Statistics: 1992,
Current Housing Reports, Series H111/92-A, U.S. Department of Commerce, Bureau of the
Census.
The size of housing units influenced
vacancy rates in 1992. Units with three
rooms or less had a rental vacancy rate
of 11.0 percent, compared with 3.1 per­cent
for units with six rooms or more.
Similarly, the homeowner housing
vacancy rate for units with three rooms
or less was 8.4 percent, compared with
1.1 percent for units with six rooms or
more.
The rental vacancy rate in 1992 for
single-family homes was 3.9 percent,
compared with 9.3 percent for apart­ments
in buildings with two or more
units. For homeowner housing, single­family
homes had a vacancy rate of 1.3
percent, compared with 5.9 percent for
units in multiunit structures.
States with highest rental vacancy
rates in 1992 were Utah (14.6 percent),
Maine (10.7 percent), and South Carolina
(10.0 percent). States with highest home-
1994 Vol. 7 No.3
owner vacancy rates in 1992 were
Florida (3.0 percent), Hawaii (2.5 per­cent),
and Maine and Nevada (2.3 per­cent
each). The rate for the District of
Columbia was 3.3 percent.
In 1992, 89.0 percent of all U.S. housing
units were occupied unit , 8.2 percent
were year-round vacant units, and 2.8
percent were seasonal vacant units.
These figures were higher outside
metropolitan areas and lower inside
metropolitan areas. The South had the
highest year-round vacancy rate (10.0
percent) and the Midwest had the low­est
(6.7 percent).
In 1992, most vacant for-rent units were
located in structures of five housing
units or more and were vacant for less
than 4 months. In contrast, most vacant
for-sale units were located in structures
of one unit and were vacant 4 months or
more.
Home Ownership
The home ownership rate is computed
by dividing the number of owner­occupied
households by the total
number of household . The U.S. home
ownership rate in 1992 was 64.1 percent
and has remained at about 64 percent
since 1985. Among regions of the country,
the highest rate was in the Midwest
(67 .2 percent), and the lowest rate was
in the West (59.3 percent). The home
ownership rate was highest outside
metropolitan areas (72.8 percent) and
lowest in central cities (49.3 percent).
Delaware had the highest home owner­ship
rate in 1992 (73.8 percent), and
New York had the lowest (53.3 percent).
The rate for the District of Columbia
was 35.0 percent. Six States in the
South had home ownership rates of 70
percent or higher, wherea five States
in the West had home ownership rates
below 62 percent (fig. 1).
Home ownership rates were highest
among tho