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1992 Vol. 5 No.3
Fenture Articles • 2 An Overview of Home-Based Work:
Results From a Regional Research Project
Marilyn M. Furry and Mark Lino
9 Expenditures for Food Away From Home
Julia M. Dinkim and M. Dianna Ed low
18 Health Care Trends
Nancy E. Schwenk
Research Summaries • 25 Changes in Income., 1984-89
26 Household Use of Financial Services
28 Family Finances
Regular Items • Recent Legislation Affecting Families
32 Current Regional Research Project
33 Data Sources
·· 34 Charts From Federal Data Sources
36 Poverty Thresholds
37 Cost of Food at Home
38 Consumer Prices
~~ ~ - J
2
Feature Articles •
An Overview of Home-Based
Work: Results From a Regional
Research Project
By Marilyn M. Furry
Assistant Professor
The Pennsylvania State University
Mark Llno1
Economist
Family Economics Research Group
This study uses data from a regional research project to provide an overview
of the nature of home-based work, characteristics of home-based workers,
and home-based workers' assessment of their work. Most home-based
workers (75 percent) owned their own business and 47 percent worked 40
or more hours per week. Home-based workers were a heterogeneous group
in regard to occupation, sex, age, education, and presence of children. Most
(83 percent) home-based workers were satisfied with their employment. Most
planned to continue working at home. Results of this study should give policy·
makers a better understanding of this growing segment of the labor force.
[I] n 20th-century America,
work and home have been
two separate aspects of
most people's lives. A
growing number of Americans. however.
have merged the two. resulting
in home-based work. Although homebased
work is often viewed as an ideal
work arrangement and a trend of the
future ( /,2). few studies have examined
such employment.
A Bureau of Labor Statistics CBLS)
study by Horvath (4). using the 191'!5
Cum.nt Population Survey. focused
on people who worked at home.
Work-at-home was defined as any
work done at home as purt of one's
1The uulhnrs wl~h In CXI'fe~' lhclr Ul'l'rcciullnn
In l>lune Musun nf I he Uniwrslly nf lluwuil·
llnnnlulu for her hell' In tluluunuly~ls.
regularly scheduled employment. The
study found that an estimated 17.3 mil·
lion people engaged in some nonfarm
work-at-home. with 1.9 million people
engaged exclusively in home-bn.'iC<!,
nonfarm work. Of persons working
exclusively at home, two-thinls were
women. About half were in service
industries. Mean hours per week
worked at home was 32.
Based on a national survey of about
2,500 randomly selected households.
a study by LINK Resources estimated
that in 1991.38.4 million people per·
formed income-producing or job-related
work-at-home. Such work could he part
time or full time or involve the usc of
one or more of the following: personal
computer. modem. fax. multiple phone
lines (5). Estimates of the number nf
people who worked ut home in this
Family Economkl Rtvltw
study were much higher than numbers
reported in the BLS study because of u
broader definition of work-at-home. In
thr. BLS !:tudy, people were included
only if work-at-home was part of their
regularly scheduled workweek.
Of all home workers in the LINK
Resources study, 31 percent were selfemployed.
Fifty-four percent were
mule, and 56 percent hud a college
degree. Average uge was 40 years, und
mean hours per week worked at home
was 17. Eighty percent were married,
and 51 percent had children under age
18 in the household; 23 percent had a
child under age 6. Average household
income was $50.400.
Heck examined the prevalence of
working at home using a sample of
6,744 people from the 1984 Panel Study
of Income Dynamics (3). The study
found that 5 percent of workers were
engaged in home-based employment.
which wus defined us situations in
which the worker did not travel to work
or the amount of tmvel time varied (such
as wh~n workers tmvel as part of their
jobs and work out of home offices).
Home-based workers were more likely
to be white, have a lower level of family
income, have a high school diploma or
more, and work shorter hours than other
workers. Older people, those without
children, those with young children
under uge 6, self-employed workers,
and farmers were also more likely to be
involved in home-based employment
than others.
Although these studies provided information
on some employment located in
the home, more needs to be known
nbout home-bused workers that either
own their own business or urc puid by
un out!lide employer.
1992 Vnl. $ N11. J
Data
The NE-167 Regional Research Project,
"At-Home-Income-Generation: Impact
on Management, Productivity, und
Stability in Rural/Urban Families,'' was
supported by the Agricultural Experiment
Stations of Hawaii, Iowa. Michigan.
Lincoln University (Missouri). New
York, Ohio, Pennsylvania. Utah. and
Vermont, und the U.S. Department of
Agriculture.
To identify home-bused workers. a
random sample of households was
selected from telephone listings in each
of the nine Stutes (IS). Screening calls
were made in February 1989by the Iowa
State University Statistical Laboratory
to lind households with atleust one
worker based in the home. For each
State, the goal was I 00 completed
interviews. A home-bused worker was
defined as a person age 18 or older who
had worked 6 or more hours per week
or a minimum of 312 hours during the
previous 12 months. Although the homebused
worker could have performed some
part of the job outside the home. the home
served as the only office from which
this work was urrangcd.
Telephone interviews were conducted
with 899 households with a home-based
worker in Murch and April 1989. Data
were collected on home-based workers'
socioeconomic characteristics. management
behavior and ,.;trategies. and the
relationship between work and family.
Weights were devised to account for the
populations in each of the nine States.
Results reported in this study arc based
on weighted data. A value for income
was imputed in all cases where it was
not reported.
Because of varying definitions of
work-:1t-home. the results of this study
arc not comparable with those of the
LINK Resources study. which docs not
focus solely on home-ba.o;cd workers but
includes all people who work at home
at least part of the time. Results reported
here "re more comparable with the BLS
analysis on people who worked exclusively
at home and the Heck study.
which examined people who did not
commute to work on a regular basis.
Occupations of home-based workers:
Marketing and sales - door-to-door or home salespeople. real estate and
insurance agents, and mail order businesses.
Contracting- carpenters, painters, roofers, miLliOns. and electricians.
Mechanical and transportation -plumbers, locksmiths, rndio und television
repair people. and auto mechanics.
Services- beauticians, hairdressel'!l, pet groomel'!l, fitness instructol'!l, and elder
and child-care providers.
Crafts and arts- potters, clothing designers,jewelrymakers. weavers, and
teachel'!l of these crofts and arts.
Professional and technkal-lawye;-s, therapists, cnginec:rs. accountants,
authol'll, teuchcl'!l, architects, und eonsultunts.
Clertcalancladmlnlltratl~e support - ~-n=turies. bookkeepers. dutu ~rs.
and t~x prepurel'll.
M1napment- real e~tute munagel'!l and speciul event~ coordlnatol'!l.
Apkultural produdlanclsales- ~~elltrs of nowm. frult!l. und vtJctables.
Nature of Home-Based Work
Of the home-bused workers in the 11ine
Stutes. 75 percent had their own business
and the remaining workers were paid by
un outside employer (table I). There
were occupational differences between
home-based business owners and paid
workers. (Sec box, p. 3, for example of
each occupation.) Of workers paid by
nn outside employer. 53 percent were
engaged in marketing or sales. Such
work typically involved u person selling
an employer's products or services door
to door. on the telephone. or from the
home. ProfessionaVtechnicul and clericuV
administrative support work were the
next most common occupations ( 13 percent
and II percent) of paid workers.
No occupational category dominated for
home-based business owners. Eighteen
percent were contractors. such as car·
penters or electricians. and 16 percent
did mechanical or transportation work.
Fifteen percent each did sales or market·
ing work; service work. which includes
home child care; and work involv:ng
crafts or art. These occupations of
home-based workers differ from those
in the BLS study because of dissimilar
classification of occupation; the BLS
study included many professional
occupations under services.
The average number of hours worked
per week in home-based work was 36
for business owners and 39 for paid
workers. This represents the average for
50 weeks per year: some people may
work more hours per week for fewer
weeks per year. Average hours worked
per week was somewhat skewed.
Twenty-nine percent of paid workers
and 37 percent of business owners
worked le!l!l than 20 hours per week in
home-bused employment. yet SR per·
cent of paid worker!! and 43 percent
of busine!'!l owners worked more than
40 hour!! per week in home-bused
employment. The uveroge number of years
in home-bu11cd employment wu!l 9 for
busine!ls nwner!l and 8 for paid worker!!.
4
Table 1. Nature of home-based work
Own Paid by
Characteristic All business employer
Percentage of home-bused workers 100 75 25
~[Cen!
Occupation
Marketing/sales 23 IS 53
Contracting IS 18 5
Mechanical/transportation 13 16 6
Services 12 15 3
Crafts/arts 12 15 2
Professional/technical 12 II 13
Clerical/administrative support 6 4 II
Management 4 3 5
Agricultural products/sales 3 3 2
Hours worked per week
Less than 20 35 37 29
20.29 10 II 8
30.39 8 9 5
40 or more 47 43 58
Years in home-based work
Less than 5 39 36 47
5-9 24 25 22
10. 14 16 17 14
15 or more 21 22 17
Additional employment outside home
Yes 26 28 19
No 74 72 81
Assistance with work 1
Yes 56 61 41
No 44 39 59
1Fur husiness ownc!'l', includes hou~hold rnemhcl'l' and othcl'l': for paid workel'l'. includes only hou-.c:hold
memhcl'l'.
In addition to work-at-home, many
home-bused workers were employed in
other jobs outside the home. A higher
proportion of business owners than paid
workers were employed outside the
home (28 percent vs. 19 percent). It
uppeal'll that home-based work is u
complement to outside work for some
ruther than an ultcmutive.
A majority (56 percent) ofhome-bnscc.l
workers huc.l paid or nonpuid ussistnnce
with their work. Datu collected on
assistance with work included both
household members and nonmembers
for business owners but only household
members for paid workers. A la"er
percentage or business owners thun puic.l
workers had assistance with their work
(61 percent vs. 41 percent).
Family Ec:onomks Review
Of business owners receiving assistunce Table 2. Characteristics of home-based workers
with their work. 70 percent hud at lt:ast
one paid employee: 24 percent hud four Own Paid by
or more. Sixty-five percent of business Churucteristic All business employer
owners ulso had help with their business
from people who were not •·eimbursed. ~
This uncompensated assistunce was
most often from family members. Of Sex
paid workers receiving assistance from Mule S8 S8 S7
household members, this help was un- Female 42 42 43
compensuted in 73 percent of house- Age
holds: in only I 0 percent of households Under 30 10 9 II
wus it always compensated. 30-39 36 36 38
Characteristics of Home-Based
40-49 24 22 28
50-59 18 21 II Workers 60 und over 12 12 12
The majority (58 percent) of home- Education
based workers were male (table 2). Elementary or some high school 6 7 2
This differs from the BLS study that High school diploma 33 35 27
found the majority of people working Some college 30 30 31
exclusively at home were female. The College degree 20 18 27
difference may reflect the earlier data
(1985) used in the BLS study. In recent Some graduate school II 10 13
years. there has been a trend for more Marital status
men than women to enter home-based Married 85 85 84
employment (5). Almost no difference Never married 15 15 16
in gender existed between home-based
workers that owned their own business Number of children
and those paid by an outside employer. 0 46 46 45
I 18 16 21
Average age of home-based workers 2 22 22 23
was 44: 30 percent were over age 50. 3 or more 14 16 II
Horvath hypothesized that work-at-home
may be un uttractive option for older Children under uge 6
people who may find a duily commute Present 28 27 32
very tiring (4). Workers who owned Not present 72 73 68
their own business were older than those Pluce of residence
paid by an outside employer. Thirty- Town or city over 2,500 54 52 58
three percent of business owners were Town or city under 2,500 19 20 18
age 50 or over, compared with 23
percent of those paid by an outside Rural nonfarm 20 20 19
employer. Farm 7 8 5
Most home-based workers had a high
school diploma. A large proportion percent, respectively. had a college home-based workers had no children in
(31 percent) had a college degree. Heck degree. the home, and 72 percent did not have
also found that education was positively children under age 6 in the home.
related to the probability of home-based Regarding marital status, 8S percent Eighteen percent had one child, und
employment. Hom~-bused workers paid of home-bused workers were murried. 14 percent had three or more children.
by an outside employer had u higher Although home-bused work is often Heck fotmd that not having children
level of education thun those owning viewed us an ideal way to manage was j)OSitively reluted to the probability
their own bu!liness: 40 percent and 28 employment and family, 46 percent of of h11me-based employment.
1992 Vol. 5 No. J 5
Figure 1. Net before-tax Income from home-based work
Percent
50 r---------------------------------------------------------------,
40 .... . ..•........ . .......... .. . ......•.....•.... . ....... .. ..............
20
10
0
Less than $5,000 $10,000-14,999 $20,000-24,999 $30,000 and over
$5,000-9,999 $15,000·1~.999 $25,000-29,999
A town or city with a population over
2,500 was the place of residence for a
majority (54 percent) of home-based
workers; paid workers were more likely
than business owners to live in a town
or city with a population over 2,500.
Seven percent of home-based workers
lived on a farm. Some of the homebased
work of these people may involve
farm produce.
Net before-tax income from home-based
work was higher for people paid by an
outside employer than for business
owners (figure I). For paid workers,
income from home-based work
averaged $24,400 with 44 percent
having a net income of $30,000 and
over. For business owners, income from
home-based work averaged $15,700
with 14 percent having a net income of
$30,000 and over.
6
• Own business D Paid by employer
Assessment of Home-Based
Work
Seventy-six percent of home-based
workers thought they made adequate or
good money for the time spent in such
work. Six percent lost money on their
home-based work during the previous
year. People paid by an outside employer
were more positive in terms of
the time-money relationship than business
owners; 86 percent of paid workers
thought they made adequate or good
money for the time spent in home-based
work, compared with 72 percent of
business owners (table 3). This is not
surprising because paid workers received
a higher income from home-based
employment than business owners.
Most (83 percent) home-based workers
indicated they received "a lot" of
satisfaction from their work. whereas
S percent stated they received "a little
or none." Although business owners
earned less income from home-based
work and were less positive in terms of
the time-money relationship for such
work. a higher percentage of business
owners than paid workers received
"a Jot" of satisfaction from home-based
employment (85 percent vs. 76 percent).
Thirty-four percent of home-based
workers expected their work to get
better, and 7 percent expected it to get
worse. For the majority (59 percent) of
people. home-based work was expected
to stay the same. A higher proportion of
business owners than paid workers
expected their work to get worse. Most
home-based workers were optimistic
about their future income from such
work. Fifty-nine percent expected their
income to increase in the next J years:
17 percent thought it would decrease.
and a small proportion of these people
were thinking of quitting their homebased
employment because of this.
There was little difference in direction
of expected income from home-based
work between business owners and
those paid by an outside employer.
Family Eronomlcs Review
Table 3. Assessment of home-based work
Item
Relationship between time and
money for home-based work
Lost money last year
Just met expenses
Made adequate money for time put in
Made good money for time put in
Satisfaction with home-based work
None or a little
Some
A lot
Overall. home-based work expected to
Get worse
Stay the same
Get better
Income from home-based work in
next 3 years expected to
Decrease'
Remain the same
Increase
1Includes those who said they were quitting.
When asked the main advantages of
home-based work. "working in one's
own way. at own pace, and being own
boss" was cited most often by both
business owners and paid workers
(figure 2. p. 8). Fifty-four percent of
paid workers and 36 percent of business
owners stated this was the main advantage
to working at home. "Take care of
family" was second for both groups,
given by 28 percent of paid workers and
35 percent of business owners. "Save
time commuting" was third for both
groups, given by 8 percent of paid
workers and I 0 percent of business
owners. Other advantages to homebased
work cited included low overhead,
tax benefits, and job security.
I 992 Vol. 5 No. J
Own Paid by
All business employer
Perce11~
6 7 2
18 21 12
48 48 49
28 24 37
5 2 15
12 13 9
83 85 76
7 8 4
59 58 60
34 34 36
17 17 15
24 24 25
59 59 60
The main disadvantage of home-based
work most often given was "work too
much," cited by 25 percent of paid
workers and 20 percent of business
owners. "Interrupts family life" was
second among paid workers, given by
I 7 percent. whereas "lack of privacy"
was second among business owners.
listed by 15 percent. Twelve percent of
both paid workers and business owners
stated there was no main disadvantage
to home-based work, and this was cited
third. Other disadvantages to homebased
work given included feeling of
isolation, unsteady income, and wear
and tear on the home.
• Most home-based
workers were
married, middle age,
had at least a high
school education,
and lived in towns
or cities with a
population of 2,500
or more.
7
Figure 2. Hom•baaed work
Three most cited main advantages Three most cited main dludvantagea
Percent
54
Work In own way
36
Work too much
Percent
25 ~ 20
28-
Takecareoffamlly
25
~
Interrupts family life 17 - Lack of privacy 15
Save time commuting 8 --Owned bualneas
10 c::J ~aid by employer None 12 12 ~
Summary and Implications
This study examined the nature of
home-based work. characteristics of
home-based workers, and their assessment
of their work. Most home-based
workers were married. middle age. had
at least a high school education. and
lived in towns or cities with a population
of 2.500 or more. Nevertheless. homebased
workers were a heterogeneous
group and included women with and
without children. and older and younger
people. Home-based workers were
likely to own their own business and
work 30 or more hours per week. They
pursued a variety of occupations including
marketing and sales. contracting.
mechanical trades and transportation,
and services. Most home-based workers
were satisfied with their employment
and had a positive attitude toward
home-based work and its future.
Findings from this study suggest
implications for further investigation.
Home-based work provides a range
of opportunities for expanding small
businesses in rural ar.:as. Several other
studies indicate more men than women
are employed in home-based work.
By identifying factors that influence
8
women to enter home-based work and
the community resources needed to
support women in this endeavor. it may
be possible to attract more women to
home-based work. Also. factors that
influence home-based workers to
pursue certain occupations should be
determined. A longitudinal study would
expand the existing data base by deter.mining
the growth of home-based work
and its impact on rural communities and
households.
References
As indicated. this study provides baseline
information on home-ba-;ed work.
Educators may incorporate findings in
programs to emphasi7.e the advantages
and disadvantages of establishing and
running a home-based business as well
as the merits of such employment as a
business owner or a paid employee.
Finally. these findings can help public
ndministrators make informed decisions
about home-ba-;ed work.
I. Ambl). M. 1988. At home in the office. Amtrican Dtmograpltic.f 10(/2):30-33, 61.
2. Bacon, D.C. 1989. Look who's working at home. Nation·., Btuint.u 77(101:20-31.
3. Heck, R.K.Z. 1991. Employment location choices: Factors associated with the
likelihood of homebased employment. Uft.ftylts: Family and Economic lullt.f
12(3):217-233.
4. Horvath. F.W. 1986. Work at home: New findings from the Current Population
Survey. Montlrly Labor Rtl'itw 109( //):31-35.
5. Miller, T. 1991. /99/ National Work-at-Hmnt Slln't,\'. LINK Resource,,
New York. NY.
6. Stafford, K .• Winter. M .. Duncan. K.A .. and Genalo. M.A. (in pre~'i), Studyin~
at-home income generation: Issues and methods. Jo11rnal of Family and Et·tmt~mi<'
/ .UIIt.f,
Family F.c:onomkl Revlnr
•
• The percentage
of total food
expenditures
spent for food
away from home
continues to
increase.
1992 Val. 5 No. J
Expenditures for
Food Away From Home
By Julia M. Dinkins
Consumer Economist
Family Economics Research Group
M. Dianna Ed low 1
Associate Professor of Home Economics
Fort Valley State College
Consumer units spent an average of $4,267 for food in 1989, with $1 ,204
spent for food away from·home. All types of consumer units, however, may
not be participating In the trend toward Increased spending for food away
from home. Food expenditure data from various Federal sources were
compared, and data from the Consumer Expenditure Interview Survey
were used to describe socioeconomic characteristics and provide profiles
of consumer units with and without expenditures for food away from home.
Fifteen percent of the consumer units had zero expenditures for food away
from home during the 3-month interview period. Their total mean expenditure
(for housing, food, transportation, and all other goods and services) was
$13,195. They spent an average of $2,510 annually for food. Compared
with consumer units with food-away-from-home expenditures, those without
expenditures for food away from home were more likely to have a before-tax
family Income of less than $15,000, be composed of one person, and have
a reference person who was black, over 60 years old, had less than 9 years of
education, and did not work. Information on the socioeconomic characteristics
of consumer units that have no expenditures for food away from home will
be useful to those interested in food trends.
[!] he percentage of total food
expenditures spent for food
away from home continues
to increase. Results from a
series of Consumer Expenditure Surveys
(Interview component conducted by the
Bureau of Labor Statistics) show that in
1972, urban consumer units2 spent 22
percent of total food expenditures for
food away from home (15): in 1980,
urban and rural consumer units spent
2S percent of total food expenditures
for food away from home ( /5): and by
1989, 28 percent of the food dollar was
11pent for food awny from home (17).
USDA'll Economic Re11earch Service
(ERS) also reports that m<>~ and more
of the food dollar is being u.'ied for meals
and snacks away from home (5,8).
1 Vi~i1ing Profe~\01'. Family Economi~ R~
~mup.
·A con~umer unil i~ rompri~ of ei1her. Ill all
membc:n of 11 panicular hou~hold who 1ft re~
by blood. matria,e.lldopeion, or ocher lrs:al
OITIIn,emenl : I~ 11wo or ITIClfe pef'IOI'I• livinJi
1o,e1bc:r who poollhelr income 10 mAke joint
e~pcndilure d«l~lnn': or 1~1 a pcr<IO!IIivinJ ;~lone
or ~harlns a hou~hold whh ocher- or thi ns a.' a
roomer In a priva1e home or lodJinJ hou-c or In
pcrmancnllivlnJ quanm in 11 hillel nr mocd, hut
who I~ nn:~nclally inckpencknl. To be: ro!Kidmd
financially lnckpmcknl, 11 lc:a" IYt'(l of lhc lhtft
rn:~jnr e~pcn'll! calt~ lhou•lnJ. food. and ocher
li\•lnJI e~pcn'll!'ll ha\'C 10 he rmvidnl hy lbc:
~rwlllcknl .
This study describes those who are not
part of this trend-consumer units
that did not spend any money for food
away from home over a 3-month period
in 1989-and compares them with
consumer units that spent money for
food away from home. Several Federal
sources of food data are available. To
determine which data were best suited
for this study, five sources were
reviewed and evaluated.
Federal Sources of Food
Expenditure Data
Personal Consumption Expenditures
(PCE). the Personal Income Spent on
Food Series. the Consumer Expenditure
(CE) Surveys (Diary and Interview},
and CE Integrated data from the two
surveys are sources of food expenditure
data collected by the Federal Government.
The PCE. Personal Income Spent
on Food Series. and CE are designed for
different purposes a'nd vary in concept.
coverage. methodology. and expenditure
classification(/). As a result. food
expenditure estimates from these
sources differ.
Personal Consumption
Expenditures
The U.S. National Income and Product
Accounts (NIP A) are compiled by the
Bureau of Economic Analysis (BEA) in
the U.S. Department of Commerce. The
PCE component of NIPA measures the
market value of durable and nondurable
goods and services purchased, the operating
expenses of nonprofit institutions
that serve individuals. the value of inkind
goods and services received by the
household sector in the U.S. ec~nomy.
and the net value of used goods· by
individuals and nonprofit institutions
from business and government.
3Thc net purcha~ (purchase le~~ ~le~) include~
cmt~ incurred in the t nsn~tion . ~uc:h a' dealers'
marJin•. ''These entrie~ define PCE !10 that it
correctly rnea•ure• total purchase~ by U.S.
pef'On•. whenever the good~ were produced" I /2).
Tnsn'II!Ction• between person~ ore not Included.
10
Table t. Food expenditures by Federal food expenditure source, 1989
Food away
Data sources All food Food at home from home
<Billions of dollars)
Personal Consumptt'o n Ex pen d't tures 1 485.1 329.6 155.5
Personal Income Spent
on Food Series2 439.6 274.0 165.7
Consumer Expenditure
Integrated Survey 397.8 229.0 168.8
I Personal Consumption E~penditures are detennined by allocation ~ftotal production to intennediate
users and final demand. Food estimates used here e~clude food fumtshed to employees. food produced
and consumed on fanns, and tobacco products.
2The basic data for this series come from retail sales of food by type of outlet.
Sourcn: U.S. Department of Af(ricu/11/re, Economic Research Sen•ice, unpublished data and personal
communication with A. Manchester, February 1992 ( 10); U.S. Departmtnt ofCommtrct, Burtau of
Economic Anal\'.!i.~. /99/, unpubli.fhed data ( 12): and ca/cu/attdfrom U.S. Dtpartmtnt of Lnbor,
Burtau of Lnb~r Stati.1tic.f, /990, Consumerexpenditurts in /989, Ntws, USDLNo. 90·616 (/4).
Included in the household sector are
military personnel, some institutional
populations. nonprofit organizations.
and purchases of goods and services
by U.S. residents traveling or working
abroad (12).
To estimate expenditures, total production
is determined and then allocated
to intermediate users and final demand.
BEA defines food at home as "food
purchased for off-premise consumption."
Nonalcoholic beverages and pet food
are included. Food away from home is
"purchased meals." This category
"consists of purchases (including tips)
of meals from retail. service, and amusement
establishments, hotels. dining and
buffet cars. schools. school fraternities.
institutions. clubs, and industrial lunchrooms"
(I/). Estimates from the PCE
series indicate that consumers spent
$485 billion for food in 1989, with
S 156 billion allocated for food away
from home (table I).
Personal Income Spent on
Food Series
ERS uses an integrated information
system to measure prices, quantities,
and values of food ( 4). In the Personal
Income Spent on Food Series. food
expenditures for families and individuals
are related to disposable personal
income. Food-at-home purchases are
those made at grocery stores and other
retail outlets. Included are purchases
made with food stamps and food
produced and consumed on farms.
Away-from-home food expenditures
exclude food paid for by government
and business (such as foods and cash
donated to schools, meals in prisons
and other institutions. and expenseaccount
meals). The ERS Personal
Income Spent on Food Series shows
that expenditures for food were $440
billion in 1989, with $166 billion
allocated for food away frol"" "'orne.
Famny Economics Review
Consumer Expenditure Survey
The CE is conducted by the Bureau of
the Census for the Bureau of Labor
Statistics (/ 3). The CE is an ongoing
survey that collects data on household
expenditures, income, and major
socioeconomic and demographic
characteristics. The CE Interview
Survey is used to collect detailed data
on an estimated 95 percent of total
household expenditures. Expenses for
a 3-month period are obtained for food
at home and food away from home. To
determine expenses for food away from
home, respondents are asked, '·tlave you
(or any members of your CU [consumer
unit]) purchased dinners, other meals
or snacks in restaurants, cafeterias,
cafes, drive-ins, or other such places?"
Respondents indicate their usual
monthly expenses for food away from
home based on the 3 months before the
interview date.
Another survey instrument, the CE
Diary component, is designed to obtain
expenditure information on small,
frequently purchased items (such as
food) that are difficult for respondents
to recall. During two consecutive 1-week
periods of participation, consumer units
keep a record of all food expenditures
except those incurred during trips (overnight
or longer) away from home.
Table 2. Mean expenditures for food, Consumer Expenditure Surveys,
1989
Surveys 1989
Interview
Number of consumer units (in thousands) 95,818
Expenditures
All food $4,267
Food at home 3,063
Food away from home 1,204
Diary
Number of consumer units (in thousands) 95,832
Expenditures
All food $3,717
Food at home 1 2,390
Food away from home 1,327
Integrated
Number of consumer units (in thousands) 95,818
Expenditures
All food $4,152
Food at home 2,390
Food away from home 1,762
1This includes expenditures for meals prepared by consumer unit members when they were on trips away
from home.
Sourcu: U.S. Departmtnt of Labor, Bureau of Labor Statistics, /990, Consumtr t xpenditures in /989,
New.v, USDL No. 90.fl/6 ( /4): U.S. Department of u1bor, Bureau of Labor Stati.ftic.f, Con.fumer Expenditure
Survty: Diary Sun'l',\', /989, unpubli.1hed dtlta ( /6): and lnten•iew Survey, /989, unpubli.1hed data ( 17).
1992 Vol. 5 No. 3
• Five Federal food
expenditure data
S.I)Urces were
reviewed to determine
the extent to which
findings on food
expenditur·es may
differ ...
11
•
The Integrated survey uses estimates
from both the Diary and Interview
components to determine total food
expenditures. For food-at-home
expenditures and expenditures for
meals in restaurants, carryouts, and
other establishments, Diary estimates
are used. For food prepared on
out-of-town trips as well as
food-away-from-home expenditures
(board, catered affairs, food on
out-of-town trips, school lunches,
and meals as pay), Interview estimates
are used (I 3).
For table I, aggregate figures were
derived by multiplying the mean food
expenditure by the total number of
consumer units (2).1n 1989, aggregate
food expenditures were $398 billion,
with $169 billion for food away from
home. Average 1989 iood expenditures
for consumer units were $4,152, with
$1,762 allocated for food away from
home (table 2, p. 11 ).
Expenditure Profiles
Among Federal data sources for food
expenditures, the percentage of total
food expenditures used for food away
from home was lowest for the CE Interview
Survey (28 percent), followed by
the Personal Consumption Expenditure
Series (32 percent) (figure 1 ). Sources
with the highest percentages of total
food expenditures attributed to food
away from home were the CE Integrated
survey (42 percent) and the Personal
Income Spent on Food Series (38 per·
cent). The Federal source providing the
mid-range estimate was the CE Diary
Survey (36 percent).
Because the focus of this study was on
how consumer units' socioeconomic
characteristics affect expenditures for
food away from home, it was necessary
to choose a data source that could
match this information for individual
consumer units. Aggregate sources
(PCE and Personal Income Spent on
Food Series) and the CE Integrated
Figure 1. Food expenditures for food at home and food away
from home: A comparison among data sources, 1989
.
Consumer Expenditure
Interview Survey 72% 28%
Personal Consumption
Expe.~diture Series 68% 32%
Consumer Expenditure
Diary Survey 64% I 36%
Personal Income Spent
on Food Series 62% I 38%
Consumer Expenditure
Integrated Survey Results 58% 42%
0 Food at home 0 Food away from home
12
In the Consumer Expenditure Survey:
Food at home refers to the total
expenditure for food at grocery stores
or other food stores and food pre·
pared by the consumer unit on trips.
It excludes the purchase of nonfood
it~ms.
Food away from home includes all
meals (breakfast, lunch, brunch, and
dinner) or snacks purchased in restau·
rants, cafeterias, cafes, drive-ins,
carryouts, and vending machines,
including tips, plus meals as pay,
school lunches, special catered
affairs, and meals away from home
on trips.
survey do not provide this type of data.
Therefore, the CE Interview Survey was
selected for the purpose of providing
profiles of ( 1) consumer units who
spend part of their food dollar for food
away from home and (2) consumer
units who spend nothing for food away
from home.
The total sample fr9m the CE Interview
Survey consisted of 20,323 consumer
units; it was weighted to reflect the
population. Twenty-eight percent of the
consumer units had a before-tax family
income4 of less than $15,000 (tahle 3).
Eleven percent of !he reference persons5
were black, 26 percent were over 60
years old, and 12 percent had less than
9 years of education. About half (52 percent)
of the reference persons W(lrked
full time, full year.6
4lncludes complete income reporters--respondents
who provided values for major sources of income
such as wages and salaries, self-employment
income, and Social Security income. However,
even complete income reporters may not provide
a full accounting of all income from all sources.
5The reference person is identified by the
respondent when asked "to start with the name
· of the person or one of the persons who owns or
rents the home."
6Full time: Working 35 or more hours per week.
Full year: Working 50 or more weeks per year.
including any time off with pay.
Family Economics Review
Table 3. Characteristics of all
consumer units, 1989
Characteristics Percent
Before-tax family income
<$15,000 28
$15,000.$24,999 17
$25,000. $34,999 13
$35,000. $44,999 10
$45,000 + 19
Incomplete income reporters 13
Number of members in
consumer unit
One
Two
Three
Four or more
Reference person
Race
28
30
17
2S
White and others 89
Black 11
Age (years)
40 or less 43
41 • 60 31
61 or more 26
Education (years)
Elementary (0-8) 12
High school (l-4) or
some college ( 1-3) 65
College graduate ( 4+) 23
Work status
Full time 52
Part time 22
Not working 26
Findings from other studies guided the
selection of socioeconomic characteristics
included in this study. Before-tax
family income, the number of people in
the consumer unit, and the race, age,
education, and employment status of the
reference person are used to describe
consumer units without expenditures for
food away from home.
1992 Vol. 5 No. 3
Highest Expenditures for Food
Away From Home
Mean food expenditures for all consumer
units by selected socioeconomic
characteristics are presented in table 4,
p. 15. Overall, mean expenditure for
food away from home in 1989 was
$1,204 (28 percent of total food expenditures
and 5 percent of total expenditures).
Consumer units spending the
most dollars for food away from home
had a before-tax family income of
$45,000 or more, had four or more
members, and had a reference person
who was white or of another race (not
black), was between 41 and 60 years of
age, had 4 or more years of college, and
worked full time.
Lowest Expenditures for Food
Away From Home
Consumer units spending the fewest
dollars for food away from home had a
before-tax family income of less than
$15,000 and a reference person who
was living alone, was black, was over
60 years of age, had a maximum of
8 years of education, and was not .
working. In general, consumer units that
spent the fewest dollars for food away
from home also spent the largest percentage
of total expenditures for food.
Size of the consumer unit, however,
was an exception; those with four or
more members spent the most dollars
for food away from home and the
largest share of total expenditures for
total food.
Zero Expenditures for Food Away
From Home
Fifteen percent of the consumer units
spent no money for food away from
home during the 3-month interview
period. They had fewer expenditures
overall than consumer units that purchased
food away from home: $13,195
compared with $28,146 (figures 2 and 3,
p. 14). Those who did not purchase food
away from home spent a larger percentage
of total expenditures for food ( 19
percent), compared with those who
did purchase food away from home
• Fifteen percent of
the consumer units
spent no money for
food away from
home ...
13
( 16 percent). Consumer units with zero
expenditures for food away from home
also spent a greater share of total expenditures
for housing and health care than
did those with expenditures for food
away from home. However. expenditure
shares for personal insurance. transportation.
apparel (purchase and care), and
entertainment were smaller in consumer
units without food-away-from-home
expenditures than in those making
food-away-from-home purchases.
The characteristics of consumer units
with zero expenditures for food away
from home were similar to those with
low expenditures. Over half had a
before-tax family income of Jess than
$15.000 (figure 4. p. 16). Thirty-seven
percent were consumer units with one
person. Twenty-three percent of reference
persons in consumer units that
spent no money on food away from
home were black, 48 percent were over
60 years old. 29 percent had at most 8
years of education (7 percent, however,
had 4 or more years of college). Over
half (54 percent) of the reference
persons did not work. but 27 percent
worked full time and 19 percent worked
part time (figure 4).
Conclusions
This study examined and compared
socioeconomic characteristics of consumer
units that did not purchase any
food away from home over a 3-month
period in 1989 with those that did. Five
Federal food expenditure data sources
were reviewed to determine the extent
to which findings on food expenditures
may differ as a result of methodological
considerations.
Results are similar to findings reported
by others that indicated socioeconomic
characteristics influence expenditures
for food away from home (/8). McCracken
and Brandt (6) found that household
income. the value of time. size, and
composition of the household predicted
expenditures for food away from home.
14
Figure 2. Expenditure eharee of consumer unite without
expenditure• for food away from home, 1989
Food
Health
Total expenditureS=$13, 195
3% Entertainment
Apparel
Figure 3. Expenditure shares of consumer units with
expenditures for food away from home, 1989
Transportation
Health Personal Insurance
Total expenditures=$28, 146
Family Economics Review
Table 4. Food expenditure pronles, Consumer Expenditure Interview Survey, 1989
Percent of total
expenditures used Mean
Total for food ~nditures
Characteristics expenditures At home Away At home Away
All consumer units $25,893 12 5 $3,063 $1.204
Before-tax family income
<$15,000 13.138 16 4 2.148 518
$15.000-$24.999 19,991 13 4 2,688 871
$25,000- $34,999 25.824 12 4 3,139 1,126
$35,000- $44,999 32.362 II 5 3,510 1,467
$45,000+ 47,913 9 s 4,276 2.385
Incomplete income reporters 23,644 14 5 3,305 1,243
Number of members in consumer unit
One 15,668 10 s 1.637 840
Two 26.266 II 5 2,870 1,330
Three 30,500 12 4 3,583 1,334
Four or more 33,719 13 4 4,541 1.368
Reference person
Race
White and others 26,835 12 s 3,098 1,279
Black 17.921 15 3 2,769 571
Age (years)
40 or less 25,290 11 4 2,885 1,134
41-60 32,700 II 5 3,703 1.586
61 or more 18,854 14 5 2.600 867
Education (years)
Elementary (0-8) 14,374 19 3 2.675 491
High school ( 1-4) or some college ( 1-3) 23,763 13 4 2,979 1,068
College graduate ( 4+) 37,968 9 5 3,508 1,963
Work status
Full time 31,677 II 5 3.408 1,504
Pan time 23,034 12 5 2,775 1.079
Not working 16,743 16 4 2,620 709
As might be expected, other researchers dollar for food away from home than do away from home have different
found that income influences expendi- multiperson households (9). This finding expenditure patterns overall and are less
lures for food away from home (5, 7). A is confirmed by this study. One-person likely to influence the growth in food
study of female labor force participation consumer units spent 34 percent of their spending. Further study of those who
and food away from home indicated food dollar on food away from home. do not or cannot spend money to eat
that two-earner households, rather than This percentage decreased to 32 percent outside the home would be valuable to
one-earner households, were more for two-person households, 27 percent those investigating population shifts and
likely to consume food away from for three-per.son households, and 23 trends in food expenditures. This type
home (3). percent for consumer units with four of data would be important to family
or more members. economists, food specialists, food
Findings from a study of single-person policymnkers. and food marketers.
households suggest that people who live Findings in this study also suggest that
alone spend a greater share of their food those without expenditures for food
1992 Vol. 5 No. J IS
Figure 4. Consumer unite with and without expenditures for food away from home, 1989
Reference person
Race
Before-tax family Income 100
10
80
100 ,ln_e,o.m.,p.l,e.l. :.. -,. 40
·144.m 20
·S34.m
80
0
Willi
Age
20
100
&1 ye81SOt-
0 10
80
.1 ·80ye81S
40
20 40 ye8IS Of leN
0
Without
Education
Number of members in consumer unit 100 ColeQe ,. end
na'lyMII)
10
80
High IChOol end
-~
I '
100 (1o3yMtS)
Four 40
ThrM 20 == 80
60 0
Wl1houl
40
Work status
20
100
0 With Without 10
10
40
10
0 ........
16 Family Economic:~ Rtvltw
References
1. Gicseman. R. 1987. The Consumer Expenditure Survey: Quality control by
comparntive analysis. Monthly Labor Review 110(3):8· 14.
2. Gleseman. R. and Rogers, J. 1986. Consumer expenditures: Results from the Diluy
and Interview surveys. Monthly Labor Re\•iew 109(6): 14· I 8.
3. Kolodinsky. J. 1987. Female labor force participation and expenditures on food oway
from home./n: V. Hampton, editor. American C.1uncll on Consumer lnttrests-The
Proceedings, pp. 175·180. Proceedings of the 33rd Annual Conference of the American
Council on Consumer Interests. (Denver. CO, Aprill987).
4. Manchester. A. 1987. DevelopinR an lnteRrated lnfonnatfon System for the Food
Sector. Agriculturnl Economic Report No. 575. U.S. Department of Agriculture.
Economic Research Service.
5. Manchester, A. 1991. Food spending. FoodReview 14(3):24·27.
6. McCracken. V.A.a'ld Brandt, J.A. 1987. Household consumption of
food-away-from-home: Total expenditure and by type of food facility. American
Jo11mal of ARricultural Economic.f 69:274·284.
7. Pn.lChaska. F.J. and Schrimper, R.A. 1973. Opportunity cost of time and other socioeconomic
effects on away-from-home food consumption. American Journal of
Agricultural Economics 55:595-603.
8. Putnam. J.J. 1990. Food Consumption, Prices, and Expenditures, 1967-88. Staiilltical
Bulletin No. 804. U.S. Department of Agriculture. Economic Research Service.
9, Sexauer. B.H. and Mann. J.S. 1979. Food e:cpendfture pattem.f of.finRie·person
lwu.reholds. ESCS Technical Bulletin No. 428. U.S. Department of Agriculture.
Economic. Statistical and Cooperative Services.
10. U.S. Department of Agriculture, Economic Research Service. Unpubli11hed data
and personal communication with A. Manchester, February 1992.
II. U.S. Department of Commerce. Bureau of Economic Analysis. 1990. Survey of
Current Bu.dnes.f 70(7):52, table 2.4.
12. U.S. Department of Commerce, Bureau of Economic Analysis. 1990. Personal
Con.fumptimr Expenditurn Methodology l'aper Series MP ·6, and unpublillhed data.
13. U.S. Department of Labor, Bureau of Labor Stati!ltic!l. 1991. Consumer Exptnditurt
Sun•ey Data, /988-89. Bulletin 2383.
14. U.S. Department or Labor. Bureau of Labor Stati!ltic!l. 1990. Consumer expenditures
in 1989. New.,, USDL No. 90-616.
I 5. U.S. Department of Labor. Bureau of Labor Statilltic!l. 1985. Con.Yumtr Exptnditurt
Sun•ey: lnten•few Sun•ey, 1980-81. Bulletin 2225.
16. U.S. Department of Labor. Bureau of Labor Statilltic!l. ConAumer Expenditure
Survey: Diary Survey, 1989. Unpubli!!hed data.
17. U.S. Department of Labor, Bureau of Labor Statilltic!l. Con!lumcr Expenditure
Survey: Interview Survey, 1989. Unpublillhed datu.
18. Yuna. H·W. 1989. Expenditum on food away from home by low·income hou~holdJ:
Analylli!l Ullina USDA '!I 1985 and 1986 CSFJJ data./n: M. Can~ky. editor. American
Cmmc/1 on Con.Yumtr lntemu-The PrnceedlnR·'· pp. 173·179. ProccedlnaK of the ;\5th
Annuul Conference of the American Council on Con!lumcr lntere!lt!l. I Bultlmore, MD.
Murch 1989).
1992 Vol. $ NtJ. J 17
.-
•
18
.•• total health
expenditures are
expected to reach
$1.6 trillion in the
year 2000, representing
16.4 percent of that
year's GNP.
Health Care Trends
By Nancy E. Schwenk
Consumer Economist
Family Economics Reseerch Group
This article presents a look at health care in the United States today.
National spending on health care continues to increase yearly at double·
digit rates. Price increases for hospital services and prescription drugs are
responsible for much of th~J Inflation In medical care costs. Other factors
include the rapid introduction of new technologies, population growth, the
aging of the population, and the threat of malpractice suits. Govemment
programs are funding Increasing shares of total health expenditures. The
proportion of total expenditures that surveyed American households allocated
to health care In 1989 ranged from 2 percent for households headed
by a person under age 25 to 14 percent for households headed by a person
age 75 or older. Other topics dlscussod In this artlcte Include AIDS care,
long-term care, new legislation, contributions to health care agencies, current
trends in diagnostics, and cost projections for health care to the year 2000.
major issue facing our
country today is how to
provide and pay for the best
pos:,ible health care for all
Americans. Families are finding it increasingly
difficult to afford health care,
with costs continuing to ri~ fa.'iter than
the overall in nation rate. Although
nearly everyone agrees that health care
reform is needed, there is no con~nsus
on how to proceed. This article will
identify major !lources of information
on the economic aspects of health care
in the United States today, report current
price and expenditure data from
these sources, and suggest foctors that
affect health care costs.
National Expenditures
The Health Care Financing Admlnistmtlon
(HCFA), U.S. Department of
Health and Human Services (7), report!!
that the Nation's expenditure on health
care was 5666.2 billion In 1990. an
lncrea!IC of $63.4 billion from I 989
(table I). Included In national health
expenditure~ are health ~rvic~ and
~upplies (personal health care, program
administration and the nc:t CO!It of private
health insurance, and government
public health programs) and rer.earc:h
and con~truction of medical faciliti~.
In 1990. health ~ic~ and suppli~
occounted for 96.6 percent of total
health care spending.
The JO.S-percent increa.~ in heallh care
costs between I 989 and I 990 wa.'i the
third con~utive year of double-digit
inc:reao;es in national health expenditurt5.
Health care acc:ounted for 12.2 percent
of the gross national product (GNP) in
1990. up from I 1.6 percent in 1989 and
9.2 percent In I 980. By compari!ian,
the country's population grew by 1.0
percent per year durin; the decade ( /0).
Ac:cording to HCFA ( /O).IIUJer Wn:s
of aovemment bud;tll are bein~ ~It·
nated for health can:. In 1990.the Fed·
eml Government allocated 15.3 percent
of total expendltu~ for medial care.
up from 14.7 pc:rt'fntln 1989. Public
Table 1. National health expenditures, selected yean 1980-90
1980 1985 1986 1987 1988 1989 1990
National health expenditures
(Billion$) 250.1 422.6 454.8 494.1 546.0 602.8 666.2
National health expenditures
per capita amount ($) 1.063 1,710 1,822 1,961 2,146 2.346 2.566
Av~rn~~ QnnY!II ~~~!lt &rQwth from ~revioli...!.Y~r show1.1
National health expenditures NA1 11.1 7.6 8.6 10.5 10.4 IO.S
Gross National Product NA 8.0 5.4 6.7 7.9 6.7 5.1
U.S. population NA 1.0 1.0 1.0 1.0 1.0 1.0
~~r~~!ll o( QrQ~s ~iUiom~l ~rody~t
National health expenditures 9.2 IO.S 10.7 10.9 I 1.2 I 1.6 12.2
1NA =Not applicable.
Srmrt·t : Hl'llltlr Crlft Fimml'illl( Arlmlnl.ftmtlon. OjJlct oftht Actuary: Datafrnm tht OjJlct of National Htalth Statl.ftlcs.
funds provided 42.4 percent of national
health expenditures in 1990 (see figure,
p. 20). a record-high percentage.
Benefit payments by the Federal-State
Medicaid program increased by 20.6
percent from 1989to 1990. and health
care spending by the Federal Medicare
program increased by R.6 percent.
Projections from HCFA (7,9) estimate
national health expenditures per person
to reach S5. 712 in the year 2000 from
$2,566 in 1990. Assuming no major
change in current laws and practices.
total health expenditures are expected
to reach S 1.6trillion in the year 2000,
representing 16.4 percent of that year's
GNP.
Prices
In 1991, the price of medical care, as
mea!lured by the Consumer Price Index
(CPI) for all urban con!lumer!l (/8), rose
8.7 percent over 1990 (table 2). This
compare!! with a 4.2-percentlncrea!IC
for all item!lund Increase!! between
2.7 and 4.0 percent for the other major
expenditure cateaorle!l. Medical care
1992 Vol. 5 No. J
commodities (prescription and nonpre·
scription drugs and medical supplies)
rose 8.2 percent over 1990, while medical
care services (professional medical
services and hospital and related services)
rose 8.9 percent According to Hildebrandt
and Thomas (4) the main force behind
innation in medical-care services has
been the price increases for hospital
and related services, and the primary
stimulus to innation in medical-care
commodities has been the price increases
for prescription drugs.
Since 1982, prices of the medical-core
component of the CPJ have increased
7.7 percent per year, on average, while
the overall CPI has Increased only 3.9
percent per year ( /8). Several factors
have been cited by analyst~ (4) to explain
~urging prices of medical care, Including
the rapid Introduction of expensive new
technologies, the aaing of the population,
and the fear of malpractice suit~. Populo·
tlon arowth Increased the demand for
medical care.
Consumer Expenditures
According to the Con.~mer Expenditure
Survey {16),1he average household
expenditure in 1990 for health care wall
$1,480, up from $1,407 spent in 1989.
The ponion of total expenditures allocated
to health care hall been rising
slowly, from 4.6 percent in 1987 to 5.2
percent in 1990. Of the total health care
expenditure, 42 r,rcent wall spent on
health insurance (commercial heaJth
insurance, Blue Cross and Blue Shield.
health maintenance plans. Medicare
paymenlli. Medicare supplemenlli. dental
insurance, and other), 40 percent on
medical services (physicians', dental.
and eye care services. lab tests, hospital
room and services, therapy, nursing
home care, and other). and 18 percent
on prescription drug!i and medical
supplle!i (eyegla.llses, contact lense!i,
convalescent and medical equipment.
and rental or medical or !iurgic'al
equipment) (In.
1Scc Scttv.'Cftlc. N .. 1990. ~ v.ith ~-f't'ldl·
IUI'n rnr htahh ln\Unanct, Fn'"/1.1• EnlffflfffiN
Rtl'it'll' ~lll: l-6.
19
The Nation's health dollar: 1990
Where It e~~me from
Medicare (17e) -----------.
Medicaid (11e) ---------.
Other government
programs (14e) --~
Out·ol·pocket
payments (20e)
Other private (Se) ---"""""
._ __ Private health Insurance (33e) -----'
Where It went
._.om,., pertonal health care
(23e)
._""'--~--- Nursing home care (8e)
'--------Holpital care (38e)
Notes: "Other prtvate"lncludes health services In the workplace, nonpatlent revenues, and privately financed conltructlon. "'ther peraonal health
care" Includes dental, other prole~alonal servlc11, home health care, drugt and other nondurable medical productl, and vtllon productl and OCher
durable medical products. "Other spending• covers program administration and the net COli of private health lnturance, government public health,
research, and construction.
Source: Health Care Financing Admlnlat,.tlon, Office of the Actuary: Oat• from the Office of National Health S,.ti.UC..
In 1990, household spending for health
care varied somewhat by region of the
country, ranging from $1,336 in the
Midwest to $1,600 in the South.
Expenditure shares allocated to health
care varied from 4.7 percent in the
Northeast to S.9 percent in the South.
Health care in 1990 accounted for a
decreasing share of total expenditures
as household income rose. Households
in the lowest income quintile spent 8
percent of their expenditures on health
care. whereas households in the highest
income quintile spent less than 4 percent.
The expenditure share allocated to
health care increased with age. Households
headed by a person under age 25
spent 2 percent of their tocal expenditures
on health care in 1990, compared with
14 percent for households headed by a
person age 75 or older.
Long:rerm Care
A major health care concern, particularly
omona older Americans, Is the arowlna
cost of nursing home care. Accord ina to
20
HCFA (7), spending for nursing home
care reached $53.1 billion in 1990, up
11.4 percent from 1989. The average
charge per day for care in nursing homes
was $86 in 1990. more than twice that
charged in 1980. Public programs.
mainly Medicaid, financed 52.1 percent
of nursing home care in 1990. Most
nursing home care that is financed from
private sources is paid out of pocket by
patients or their families. In 1990. these
out-of-pocket expenditures reached
$23.9 billion.
Murtaugh and others (8) have estimated
the lifetime risk of nursing home use.
Individuals and their families. private
insurers, and policymakers can be guided
by such information. Almost one-third
of all men and just over half of all
women who turned 65 in 1990 can be
expected to require nunling home care
at one time or another (table 3, p. 22).
About 70 percent of married couples
who turned 65 In 1990 can expect that
at least one of the two will need a nursing
home, and 90 percent of married
children with four parent!! who turned
65 In 1990 can expect to have at least
one parent in a nursing horne. The
gradual increase in life expec:tOncy will
result in a greater demand for nursing
home care in the future.
The American Anociation of Retired
Penons (/)estimates that by the year
2000 nearly 9 million elderly Americans
will need long-term care services. up from
6.9 million in 1988. For every individual
in a nursing horne. there are two in the
community with the same needs.
Long-term care insurance. a relatively
new type of insurance coverage, is
designed specifically to pay for some
long-term care llef'Vi~. It covers some
of the services not included under
Medicare or supplemental medigap
insuranc:e.2 However. this type of
:M~Ipp pollc:lc<lan! IINtntd tn CO\~~ of
the cmt~ nn1 cmmd by M~lc:art: fornamplt.
~Ill dtductlblt\ and ph)'f-lc:IW COopl)'lllftlb,
5ornt mtdiJIP polk:!« provide I ~It ltd nuNIIJ
11on1t t~m:nt. dniJ.' or~~ ~lm. \UCtl" 1
priVIIC WI)' nuN. The bm:Ot for MW mtdlpp
polk:~ hll\"f twn Mandlnllltd 111«110 'flt\'lfk
plan' by the Nlllonol "''"ldatlnn of ln\Uf'IIICf
Comml,~. Only thlft ott~"'*" pnl\idt
pmmpdM dNJ iwMfll\o
Table 2. Consumer Price Index ror All Urban Consumers (CPI·U): Detailed expenditure categories,
U.S. city ave~ge (1982-84 = 100, unless otherwise noted)
Annual
average
Item and group 1990
All items 130.7
Medical care 162.8
Medical care commodities 163.4
Prescription drugs 181.7
Nonprescription drugs and medical supplies 1 120.6
Internal and respiratory over-the-counter drugs 145.9
Nonprescription medical equipment and supplies 138.0
Medical care services 162.7
Professional medical services 156.1
Physicians' services 160.8
Dental services 155.8
Eyecare1 117.3
Services by other medical professionals 1 120.2
Hospital and related services 178.0
Hospital rooms 175.4
Other inpatient services 1 142.7
Outpatient services 1 138.7
11ndexes on a December 1986 = 100 base.
St•uru: U.S. D'fHirtmmt of lAbor, Bur,au of lAbor StatiJtics, 1992, CPI Dna /I'd R'port.
insurance policy may not be available to
everyone who might want to purchase
one. Restrictions may exist on the age
and health status of potential buyers.
Also. in some geographical areas.
there are no companies offering these
policies (I).
The cost of annual premiums varies
depending on the purchaser's age at
time of purchase. the waiting period
before benefits begin. the length of time
benefits are paid. the amount of daily
benefits. deductibles, and preexi!lting
conditions. A 6S-year-old individual in
good health would pay between S2SO
and 52.000 annually for a policy that
includes !!killed and custodial nursing
home care. and home care ( 1).
1992 Vol.$ Nr1. J
Some States now allow long-term
care insurance riders on life insurance
policies. These riders provide for a
percentage of the policy's death benefit
to be paid in advance to a policyholder
requiring long-term care.
The Office of the Inspector General.
U.S. Department of Health and Human
Services ( /5), reports the establishment
of the State Long Term Care Om buds·
man program, funded under the Older
Americans Act of 1965. The Act requires
each State Unit on Aging to establish
and operate an ombudsman program.
All States and many communities have
public officials who help families
through the maze of long-term care
facilitie.~ at no charge (2).
Annual Percent change
average from 1990
1991 to 1991
136.2 4.2
177.0 8.7
176.8 8.2
199.7 9.9
126.3 4.7
152.4 4.5
145.0 S.l
177.1 8.9
165.7 6.1
170.5 6.0
167.4 7.4
121.9 3.9
126.6 5.3
196.1 10.2
191.9 9.4
IS8.0 10.7
IS3.4 10.6
The program addresses the growing
concern over the poor quality of nursing
home care.
The country's SOO-plus ombudsmen
act as advocates of the institutionalized
elderly to ensure that they have a voice
in their own treatment and care. Some
ombudsman duties include investigating
and resolving complaints on behalf of
elderly residents of nursing homes.
reviewing licensing problems. and
providing information on long-tenn
care issues to residents. public agencies.
legislatures. and the community (2,/S}.
21
Older Americans
Independence Centers
In November 1991, the National Institute
on Aging (NIA), one of the 13 National
Institutes of Health ( /3), established the
Nation's first Claude D. Pepper Older
Americans Independence Centers with
an award of $3.8 million. This funding
covers the first year of a .5-year program.
Authorized by Congress in 1990, the
centers will design and conduct clinical
studies aimed at preventing and reducing
disabilities that affect older people's
independence. The three centers are
located at the University of Rochester.
Rochester. New York; University of
California, Los Angeles, California; and
Bowman Gray School of Medicine,
Winston-Salem, North Carolina. Each
will focus on projects designed to help
older people avoid the need for longterm
care because of physical limitations.
Effective intervention may benefit the
elderly and reduce health care costs as
well. Because about one-third of nursing
home residents over age 65 require help
performing physical tao;ks. reducing the
incidence of disabilities that make long·
term care necessary could save a substantial
portion of health care costs.
The NIA plans to expand the number
of centers, with two more to be added
by the end of 1992.
AIDS Care
One of the greatest health care issues
in the United States and worldwide is
finding a cure for the deadly acquired
immunodeficiency syndrome (AIDS)
and treating affected patients in the
interim. The Agency for Health Care
Policy and Research (AHCPR), U.S.
Department of Health and Human
Services ( 14) has estimated that the cost
of treating every patient in the United
States who is infected with the human
immunodeficiency virus (HIV) may
reach $10.4 billion by 1994. ~eople
with AIDS. a di!!tase unknown until the
22
Table 3. Remalnlnallretlme risk ol nunlna home use aiiiOftllndlviduah
tumlng651n the yean 1990,2000,2020, and 2040
Population Risk of Number enlerinJ
Year turning65 nursing home use nul"'iing homes
and sex (thousands) (percent) (thousands)
1990
Women 1.17.5 51.6 606
Men 998 32.3 322
Total %.173 42..1 929
2000
Women 1.071 52.2 559
Men 947 33.0 313
Total 1.018 43.3 173
1020
Women 1.988 53.3 i.060
Men 1.8SJ 34.0 631
Total 3.841 44.3 1,70%
1040
Women 1.650 S4.4 898
Men 1.551 35.0 542
Total 3.201 . 45.1 1.446
Note: Figures m:~y not add 10 101:11~ bec:~u~ of roundinJ.
St1urcr: Mrdiml Curt. 1990. 11rr rl.dc nf IIUrsiiiK hnmr usr /11 /atrrllf,, Vnl. 2lf. Nn. 10.
1980's, account for two-thirds of the
estimate; reropositive persons-those
who have the virus but not the diseao;e...:..
account for the remainder.
Medical care costs for people with HIV
(hospital costs, physicians' fees. drug
costs, and other medical expenses) are
paid for by Medicaid, private insurance.
and out of pocket. The cost of treating
all patients with HIV is expected to
increase by 21 percent per year. on
average, between 1991and 1994. The
AHCPR estimates that it costs about
$32.000 to treat a person with AIDS for
a year and $5.150 to treat a sero~itlve
person.
Recent Legislation
A section of the Omnibus Budget
Reconciliation Act of 1990. entitled
the Patient Self-Determination Act.
took effect on December I. 1991. Under
this law. every lldull patient entmnga
005pital, nursing home.htxpice. or
enrolled in 11 henlth mnint~ orpni-
7.ation pnrticipatina in MedicAre or
Medicaid must be told about the riJht
to c~ nnd/or refu.~ treatment in
the event of tennimal or ineapacitatina
illna~. The law requi~ that patient~ be
infonned of their ritht. under individual
State law. to fill out an Dd~ direc:·
live-a doalmentl'tltina what I~ to be
done if the patient ~ unAble to
mAke dec:l. ion.~ about hill or hl:r medal
care. Facilities mu.' t educate their ~fl'
a:Mlthe community about advance
directlveA through meetings. brochures,
and public announcements (J).
Another provi!iion of the Omnibul'
Budget Reconciliation Act of 1990
enabled the Health Care Financing
Administration to introduce Medicare
Select(//). Effective January I. 1992,
Medicare Select legislation allows
medisap policiellto have different
benefits for participating vef!lus non·
participating providers. Previously.
when the law governing mediaap
standards did not allow for such benefit
differentiation, there was little incentive
for preferred provider organizations
(PPO's) to link up with medigap
policies. The Jaw allows up to 1.5 States
to work with interested parties over 3
years to introduce PPO medigap policies.
The bill. Public Law 101·508, wa.'
signed on November .5, I 990.
Voluntary Health Agencies
Accardi~ to the National Health
Council. 34 voluntary health agencies
!ipent a record $2.44 billion to fight
diseiSCll and disabilitiell in 1989, the
latest year for which such data are
available. Included are agencies !IUCh
as the American Cancer Society. the
American Lung A!I!IOC:iation, the
American Red Cross. the March of
Dime!l Birth Defect.' Foundation, and
the National Ea.'ter Seal Society. Of
the total outlay, 35 pm:ent was spent
on community !lerVice!l, 20 percent on
public education. I 6 pm:ent on patient
!ICI'Vicel!, 10 pm:ent on research. and
2 percent on profe5.,ional education.
Mana1ement cO!Itl and fundraising
accounted for the remainin1 17 pm:ent.
Public contributions provided 55 per·
cent of the total revenuts ( /2).
.,. NICiollal Hatch COUIICII, (OIIIIdfd In 1920,
'' 1 pri¥11C,IIOftP"Jflt ~.W~riiCion whoM l!llrllbm
lnchldr ftltloNI ¥oiUIIW)' hnlth llf'IC~• prof'&
tloNI hnllh 1.\~IICioM.ICid I ¥Witty u( ftOII•
proflt orpnl1.atloM. 1111\hw~~ corpcnt~.llld
F'*'tl ~ltllfllrlll lf'IICit\ with \IMIIIIIItm~~
In hnlth l\4un,
1992 Vol. 5 No. J
The average contribution to health
agencie1 by all U.S. households was up
35 percent between 1987 and 1989,
from S34to S46 per household (in 1989
dollar!~). In 1987, 23.9pen:entofhouse·
holds contributed to health asencies.
with an average gift of S 130 per C()Jitributing
household. By 1989.32.4 percent
of households contributed to health
agencie!l, with an average gift of$143
per contributing household. The percent·
age of households donating to health
agenciell wa.' exceeded only by the
percentaae donating to religious
organizations (5).
Current Trends In Diagnostics
Docton By Phone (6)
Physicians have recently joined the 900
number industry. Doctors By Phone is
available 24 hours a day nationwidt.
Based in New York City, the service
lets tbe caller speak with a licensed
physician, U!iually an internist from a
major New York hospital. The cost is
$3 per minute and the average call lasts
5 minutes. The doc:tors on call are trained
to answer basic questions from various
fields of medicine using an extensive
computer data base of medical infonna·
tion. Every conversation is taped and
reviewed by a medical review board to
monitor the advice given and provide
training as needed. Most often the
service is used by people who do not
undentand why their doctor ordered
particular tests. by those who do not
have a replar doctor, or by those who
are uncomfortable discussina problems
with their own doctor.
Propolll by Computer (19)
Doctors may access sophisticated com·
puter systems to help diaanose Illness,
!!elect therapy. and make nrc-or-death
dec:ilions. The aoaJ of theM: new systems
is to simulate the proceu by which
docton evaluate medical evidence.
AlreAdy In use are the followlna:
• a computer model to prognosticate
the odds or survival ror Intensive·
care pAtients.
• National health
expenditures are
ex~edtolncrease
at an average annual
rate of 9.2 percent
during the decade.
23
• a computer model to predict hean
attacks in patients who come to
emergency rooms with chest pains.
• a computer model that works as a
diagnostician, raising red flags, or
suggesting alternative therapies,
from a vast data base where descrip·
tions of hundreds of diseases and
pathological disorders are stored.
• computerized systems that read
electrocardiograms.
Cost Projections
What can we expect to happen to health
care costs in the near future? The Health
Care Financing Administration (9) has
developed an actuarial projection model
of the health care sector to project
national health expenditures through the
year 2000. National health expenditures
are expected to increase at an average
annual rate of9.2 percent during the
decade. Private sources are expected to
provide a decrea.~ing share of national
health expenditures. while the share
borne by the public increases from 42
to 47 percent. An increasing portion
of national health expenditures will be
spent for hospital and physician services.
Because most Medicare expenditures and
nearly half of Medicaid expenditures are
allocated to hospital and physician
services, Medicare and Medicaid will
account for an increasing share of total
spending, from 28 percent in 1990 to a
projected 34 percent in 2000.
24
References
I. American Association of Retired Persons. 1989. Before You Buy: A Guide to Long·
tum Care Insurance.
2. Changing Times. 1990. Help finding a nursing home. Vol. 44, No.5, pp. 100-102.
3. Colburn, D. 1991. Let the patient decide. The Washington Post, November 19 issue.
4. Hildebrandt, P. and Thomas, E. A. I 99 I. The rising cost of medical care and itll effects
on Inflation. Economic Review 76(5):47-58.
5. Independent Sector. 1990. Giving and Volunteering In the United States. ( 1990 ed.)
6. Kiplinger's Personal Finance Magazine. 1991. Dial-a-doctor makes its debut. Vol. 45,
No. 11, pp. 93-94.
7. Levit, K.R., et al. 1991. National health expenditures, I 990. Health Care Financing
Review 13(1):29·54.
8. Murtaugh, C.M .• Kemper, P., and Spillman, B.C. I 990. The risk of nursing home use
in later life. Medical Care 28(10):952-962.
9. Sonnefeld, S.T., et al. 1991. Projections of national health expenditures through the
year 2000. Health Care Financing Review 13(1): 1-27.
10. U.S. Department of Health and Human Services. 1991. HHS News, October2 issue.
11. U.S. Department of Health and Human Services, Health Care Financing Administration.
1991. News Briefs: Medicare Select expands options available to Medicare beneficiaries.
Health Care Financing Review 12(3):143-144.
12. U.S. Department of Health and Human Services, Health Care Financing Administration.
1991. News Briefs: Voluntary health agencies spend $2.44 billion to fight diseases.
Health Care Financing Review 13(1):162.
13. U.S. D-:partment of Health and Human Services, National Institutes of Health. 1991.
Older Americans Independence Centers Are Established by National Institute on Aging.
14. U.S. Department of Health and Human Services, Public Health Service. 1991.
Research Activities. No. 146.
IS. U.S. Department of Health ant:~ Human Services, Office of Inspector General. 1990.
Effective Ombudsman Programs: Six Case Studies. OEI-02-90-02122.
16. U.S. Department of Labor, Bureau of Labor Statistics. 199 I. Consumer expenditures
In 1990. News. USDL No. 91·607.
17. U.S. Department of Labor, Bureau of Labor Statistics. 1992. 1990 Interview Survey
Public Use Tape Documentation.
18. U.S. Department of Labor, Bureau of Labor Statistics. 1992. CPI Detailed Report.
January 1992.
19. Wei~r. B. 1992. 'Scat of the pants' medicine's reliability rivaled by software.
The Washington Po.ft, January I is~ue.
Family Economla Review
1992 Vol. 5 No. J
Research Summaries •
Changes in
Income, 1984-89
The severe recession of 1981-82 was
foiJowed by a period of substantial economic
growth between 1984 and 1989.
Real median family income in constant
1982 dollars (adjusted for size of family
unit and age of head) rose from $13,330
in 1984 to $14,303 in 1989. This article
examines changes in income for various
age cohorts between 1984 and 1989.
Data are from the Current Population
Survey (CPS), conducted by the Bureau
of the Census in March 1985 and March
1990.
Income is defined as cash income before
taxes. Total income is separated into
five major income types: Earnings (wages
and salaries, self-employment income);
Social Security benefits (including Railroad
Retirement benefits); property
incolllf! (interest. dividends. rent, royalties,
estate and trust income); pensions and
annuities; and other income (for example,
Supplemental Security Income, public
assistance, unemployment, and
workers' compensation). A family unit
is defined as either a family (two or
more related persons Jiving together) or
an unrelated individual (a person who
Jives with no relatives). Family units are
categorized into age cohorts according
to the age of the unit head.
Between 1984 and 1989, real gross
national product rose an average of
3.3 percent per year, as the overaJJ
unemployment rate fell steadily from
7.4 percent to 5.2 percent. Real median
family income grew at an average
annual rate of 1.4 percent. The average
annual percentage change in real
median income ranged from 0.4 percent
per year for those ages 75-79 to 2.5
percent per year for those ages 50-54.
Table 1. Average annual percentage change in real median income a~d
relative median incomes of family units, by age of unit head, 1984-89
Age of Average annual Relative median income
unit head percentage change 1984 1989
All ages 1.4 1.00 1.00
20-24 1.2 .64 .63
25-29 .6 .98 .94
30-34 1.0 1.04 1.02
35-39 .7 1.13 1.10
40-44 2.2 1.18 1.22
45-49 2.3 1.30 1.36
50-54 2.5 1.32 1.40
55-59 1.3 1.26 1.26
60-64 2.3 1.06 1.10
65-69 1.1 .94 .93
70-74 1.7 .79 .80
75-79 .4 .69 .65
80-84 .9 .59 .58
85 or older .5 .56 .53
1tncome adjusted for sl1.e of family unit and age of head.
Source: Tubulmirmsfmm the Marc/1 /985 and March /990 CPSji/e:r.
25
Table 2. Percentage of persons poor or near poor by age of person
1984 and 1989 ' '
Below ISO% of
Below poverty threshold poverty threshold
Age 1984 1989 1984 1989
All ages 14.4 12.8 24.3 22.0
Under 5 23.9 22.6 36.2 33.9
5-9 22.6 20.3 33.9 31.2
10- 14 20.1 18.1 31.0 28.2
15- 19 18.0 15.6 27.4 25.0
20-24 16.0 14.8 27.3 24.7
25-29 12.5 11.3 21.2 20.0
30-34 11.4 10.8 19.4 18.4
35-39 10.0 8.9 17.1 15.2
40-44 9.6 7.2 16.3 13.1
45-49 9.4 7.2 15.3 12.2
50-54 9.4 7.7 15.4 13.0
55-59 9.9 9.7 17.3 16.2
60-64 10.9 9.5 19.9 17.4
65-69 9.4 8.2 21.7 20.2
70-74 11.5 9.6 27.9 24.7
75-79 13.7 13.5 32.9 32.7
80-84 17.7 16.7 40.4 36.8
85 or older 18.4 18.4 40.3 38.6
Smtrce: Tabulatimzsfrom the March /985and March /990 CPS files.
Relative median income for the various
age cohorts was derived by dividing the
median income for the age group by the
median income for all ages. Relative
medians for 1984 and 1989 are shown
in table 1. p. 25.
Poverty rates for all people fell slightly
during this period, from 14.4 percent in
1984 to 12.8 percent in 1989. In both
years, the rates were highest for young
and old people and lowest for middleage
people. The percentage of people
classified as near poor (with incomes
below 150 percent of the poverty threshold)
was similarly highest for young
and old people. As with poverty rates,
the percentage of people classified as
near poor fell slightly. from 24.3 percent
in 1984 to 22.0 percent in 1989
(table 2).
26
For some age groups, the composition
of total income changed between 1984
and 1989. For those under age 55, there
was little change. with earnings accounting
for at least 87 percent of total income
in both years. For those ages 55-64,
there was a slight shift from property
income to pensions. However, earnings
constituted about 71 percent of total
income for this age cohort. For those
ages 65 and older, the share of earnings
increased from 19.6 percent in 1984 to
22.1 percent in 1989; the share of
pensions also increased, while the share
of Social Security benefits and property
income fell.
Source: Rudner, D .. 1991 , Changes in the
incomes of age groups, 1984-89. Social Security
Bulletin 54< /2):2-17.
• Household Use of
Financial Services
Changes in financial markets during the
1980's may have altered the banking
practices of households. Among these
changes were: bank mergers and acquisitions:
the authorization of interestbearing
checking accounts at all
depository institutions: the introduction
of money market deposit accounts:
the increased use of automated teller
machines; and the growth of large.
nationwide issuers of credit cards. In
addition, features that distinguished
one financial institution from another
became less pronounced. For example.
in the early 1960's, only commercial
banks offered checking accounts. Now,
savings institutions and credit unions
feature checking accounts, and nondepository
institutions offer money
market accounts with limited checking.
Also, during the 1980's, savings
institutions entered the consumer
credit market. and depository institutions
began offering money market deposit
accounts and discount brokerage
services.
Data from the 1989 Survey of Consumer
Finance (SCF) were analyzed to measure
the effect of these changes on household
banking practices. Financial
services and institutions used by households
and the geographic area involved
were determined. The SCF, sponsored
by the Federal Reserve Board and other
government agencies, collected a detailed
inventory of assets and liabilities
from a representative sample of U.S.
households. The survey identified the
source of each deposit account, money
market mutual fund account, mortgage,
credit line, and loan. The survey also
collected information on the proximity
of each financial institution to home or
work, the household's usual methods
of conducting business with the institution,
the length of association with the
institution, and the different types of
accounts held at each institution.
Family Economics Review
Households using loc:al and nonloc:al financial institutions, by type of
institution, 1989
Type of financial
institution Local Nonlocal Total 1
Percent
All 89.! 17.8 90.3
Depository 87.8 11.7 88.6
Commercial bank 75.4 6.8 77.6
Savings 37.4 3.5 39.4
Credit union 23.0 4.4 26.5
Nondepository 28.5 17.5 42.8
Finance company 13.3 9.0 21.3
Brokerage firm 10.1 4.6 14.0
Other financial 7.2 10.9 18.1
1 Sum of local1111d non local exceeds total because some households use both local1111d non local
institutions. An institution is local if the office or branch used by the household is located 30 miles
or less from the household or workplace of the primary user.
Sourct: Ellit>haustn, G. E. and Wolkt>n, J.D., 1992, Banking markrts and thr uu of financial stn•ict>s by
houstholds, Ft>dt>ra/ Rt>st>rvr Bullt>tin 78( 3): /69-/81.
Commercial banks were used by 78
percent of all households, followed by
savings institutions (39 percent), credit
unions (26 percent), finance companies
(21 percent), other financial institutions,
including mortgage banks and insurance
companies (I 8 percent), and brokerage
firms (14 percent). Local institutionsthose
with an office or branch located
30 miles or less from the household or
workplace of the primary user-were
used by 90 percent of households. The
average household used 2.72 financial
institutions, with commercial banks
accounting for nearly half. When asked
to designate a financial institution as
their "main" or primary one, 94 percent
identified local depository institutions,
and 63 percent specified a local
commercial bank.
The financial service used most often
by households was checking accounts.
A household's main checking account
was the account on which most of the
household's checks were written.
1992 Vol. 5 No.3
Nearly all main checking accounts were
at local depository institutions-68 percent
at local commercial banks, 21 percent
at local savings institutions, and
9 percent at local credit unions.
There is evidence that households may
be clustering their purchases of financial
services. Households had an average
of2.4 accounts at their "main" or
primary institution and 2.5 accounts
at their main checking institution. In
contrast, finance companies and other
nondepository financial institutions
appear to be single-product institutions,
averaging 1.1 accounts each. Brokerage
companies, which averaged 1.7 accounts
per household, were the only type of
nondepository institution associated
with multiple-account usage.
Asset services include checking, savings,
and brokera.~e accounts. Credit services
include mortgages, credit lines, and
installment loans. Ninety-three percent
of asset accounts and 85 percent of
credit accounts were at local institutions.
Households averaged 2.8 asset accounts
and I .9 credit accounts.
Bank credit cards were used by 56 percent
of households, followed by mortgages
(37 percent). motor vehicle loans
(34 percent), other credit accounts,
including personal loans and home
improvement loans ( 14 percent), and
home equity or other credit lines (I I
percent). Twenty-eight percent of households
obtained one or more financial
services from a nonfinancial source,
such as individuals, retailers, nonfinancial
businesses, government agencies,
and nonprofit agencies. These financial
services were usually "other" loans.
Among all financial institutions, commercial
banks were most often used for
all types of credit. Savings and nondepository
institutions were also often
the source of credit for mortgages:
finance companies were often used for
vehicle loans.
Findings indicate that changes that took
place in financial markets during the
1980's did not cause major shifts in
household banking practices. Local
depository institutions, especially local
commercial banks, are still the main
suppliers for most of the financial services
used by households. With the
exception of trust accounts, the median
distance from home or work to offices
of financial institutions was I 0 miles or
less. For 9 of the 12 financial services,
the median distance was 5 miles or less.
These findings suggest that transaction
costs may be an important consideration
in selecting financial institutions. Commercial
banks and other depository
institutions appear to offer a unique set
of products and services that are often
purchased as a bundle.
Source: Elliehnusen, G.E. and Wolken. J.D .. 1992.
Banking markets and the use of finnncinl services
by households. Ft>drml Rt>scn·~ Bulfrtitr
78(3):169-181 .
27
• Family Finances
Between 1983 and 1989, family finances
in the United States were affected by
banking deregulation, changes in the
tax law. an expanding economy, and
changes in family demographics. Banks
began paying interest on transaction
accounts and charging customers for
previously free services. The tax deduction
for consumer interest (other than
hom,. anortgage interest) was gradually
eliminated. thus increas.ing the effective
price of borrowing. Other tax changes,
such as the elimination of general
deductions for individual retirement
accounts. affected family financial
planning. From 1983 to 1989, aggregate
real disposable personal income increased
by 21 percent, number of households by
9 percent. total household assets by 61
percent. and net worth by 56 percent.
The largest growth in households
occurred in those headed by individuals
between the ages of 35 and 45 years, a
group that tends to have a relatively
high rate of saving. Dual-earner families
grew from 26 percent of all families in
1983 to 29 percent in 1989.
Using data from the 1983 and 1989
Surveys of Consumer Finances. changes
in family income. assets, and liabilities
over the period are examined. The
Survey of Consumer Finance is designed
to gather detailed and comprehensive
information on assets. liabilities. and
income flows from a representative
sample of U.S. families. Data for both
surveys were collected by the Survey
Research Center at the University of
Michigan. The surveys were sponsored
by the Federal Reserve in cooperation
with several other agencies.
Between 1983 and 1989. real median
before-tax income for families was
virtually unchanged: however, real
mean family income rose from $33.400
to S35.700. These findings suggest that
incomes above the median grew faster
than those below the median.
28
Changes in the overall real net worth
of families (total assets less total debts)
were greater than changes in family
income. Median real net worth rose II
percent, whereas mean real net worth
rose more than 23 percent. Changes in
net worth may be attributed to changes
in the value of assets held or in the
amount of debt carried.
Assets
The composition of assets held by all
families changed only slightly between
1983 and 1989 (table 1). The small shift
away from nonfinancial assets reflects
declines in business and real estate
assets as a share of total assets. The
percentage of families with checking
accounts (conventional checking accounts,
NOW accounts, and money market
accounts used for checking) fell from
79percent in 1983 to 75 percent in 1989.
Only 16 percent of families without
checking accounts in 1989 reported
service fees and balance requirements
as the reason.
The proportion of families with savings
accounts also fell dramatically over this
period, partly because families shifted
assets to other investment vehicles. The
proportion of families with money
market accounts rose. and the median
size declined from $11,000 to $5,000.
However. mean account size increased
from $27.400 to $28,300, indicating
the number of money market accounts
with lower balances increased. The
proportion of families with retirement
accounts increased from 24 to 33 percent.
and the median size of these
accounts doubled. In part. this growth
reflected the shift in employer-provided
pensions from defined-benefit plans to
defined-contribution and 40 I (k) type
plans. Stock ownership (both equities
and mutual funds) declined as did mean
holdings; however, median values increased.
Mean holdings of both taxable
and nontaxable bonds decreased as did
median holdings of tax-exempt bonds:
median holdings of taxable bonds
increased. Although the proportion of
families having any type of financial
asset fell slightly. median holdings
more than doubled as mean holdings
rose about 40 ~rcent. These changes
suggest a decline in concentration of
financial assets.
Table 1. Composition of assets of all families, 1983 and 1989
Assets 1983 1989
Percent
Financial 25.6 27.7
Nonfinancial 74.4 72.3
Vehicles 3.6 3.9
Principal residence 33.4 32.2
Real estate and land investment 16.0 15.1
Business investment (excluding real estate) 20.4 17.8
Other 1.0 3.3
Total 100.0 100.0
Sourct: Ktnniclctl/, A. and Shaclc·Marqut:. J., /992, Clrcm!IC!.f inflmrilyfirrcmc('Jfrom /9/i.lto /Y/19:
El'idtnc:t from tilt Surl't~,l' nfConsumtr Fi11cmcr.v, Ftdual H(•.vrm• Bulh•till 78( I): 1·111.
Family Economics Review
Table l. Families carrying selected Onanclal debts, 1983 and 1989
Characteristics Home Home
of the family mortgage eguit~ lines Credit cards Car loans Total
and family head 1983 1989 1983 1989 1983 1989 1983 1989 1983 1989
All families 36.9 38.7 0.5 3.3 37.0 39.9 28.7 35.1 69.6 72.7
Family income ( 1989 dollars)
Less than $10,000 9.9 8.8 • • 11.9 15.0 8.8 II. I 41.3 47.2
$10,000-$19,999 20.1 21.3 • 1.3 26.3 27.3 21.7 21.8 58.2 58.7
$20.000- $29.999 34.0 36.8 • 2.4 45.5 48.9 32.9 39.4 76.6 79.5
$30.000- $49,999 56.4 53.1 0.8 4.5 53.0 55.0 40.0 50.9 85.3 86.5
$50.000 and more 66.8 72.4 0.7 7.7 48.4 53.1 40.1 51.7 87.2 91.8
Housing status
Own 58.3 59.8 0.8 5.0 41.6 43.8 31.0 39.0 75.1 78.0
Rent or other "' • • • 29.1 32.7 24.5 27.9 60.0 63.1
Family head
Age (years)
Under 35 32.6 32.8 0.4 1.0 38.4 44.0 36.9 37.4 79.1 79.5
35-44 58.1 57.7 0.8 4.3 51.5 52.4 38.4 51.5 87.1 89.6
45-54 53.5 56.3 0.8 6.3 45.0 50.0 35.3 48.7 81.0 85.9
55-64 34.4 37.5 "' 6.1 37.5 34.1 21.9 29.3 67.2 74.0
65-74 15.7 19.9 • 1.0 18.2 25.4 8.4 14.0 37.1 47.9
75 and over 3.7 8.6 • • 6.1 10.6 • 5.3 16.8 23.8
Race
White 39.2 40.9 0.6 3.6 37.9 41.0 29.7 36.3 70.6 73.9
Non-White and Hispanic 26.3 23.7 "' 1.1 33.1 32.4 23.7 27.0 64.7 65.0
Life-cycle stage
Under 55 years
Unmarried, no children 14.8 18.1 • • 33.3 37.5 21.6 29.8 68.8 72.8
Married, no children 45.8 52.0 • • 52.8 57.9 45.0 S0.5 91.1 89.2
Unmarried. children 31.0 26.8 • 1.6 34.3 33.4 24.6 29.9 70.5 70.0
Married. children 60.0 63.6 0.7 5.4 49.4 56.7 45.3 55.0 89.0 93.6
55 years and over
In labor force 34.3 41.2 • 6.6 37.3 43.3 21.7 32.1 66.7 79.1
Out of lal.Jor force
Retired 13.7 15.5 • 1.1 15.5 15.2 7.2 12.5 33.2 37.9
Other ... 17.0 • • 10.9 18.3 • 8.6 21.5 42.1
•Fewer than five families.
Sourt•t•: Kennlt'kt'/1, A. cmcl Slwck·Marqut•:.. J .. /992, Clulll1/t'.llnfamllyjillllllL't.f/rom /9HJ 1111989: E1•/dtnct from tht Sun'l',\'ofCmmmrrr Flrrmwr.1,
Fec/eral Rt•un·t• Bu//t•t/11 7H( /): J.JH.
1992 Vol. 5 No.3 29
Homes and vehicles are the most
widely held nonfinancial assets. Rates
of home ownership for all families
changed only slightly between 1983
and 1989. However, there were sizable
declines in ownership for families earn·
ing less than $10.000 and for single
parents. In contrast. rates of home
ownership for childless married couples
and for families with the head between
SS and 64 years of age increased substantially.
For all families. the real
median home value for homeowners
increased from $64,700 to $70,000,an
8-percent rise, whereas the mean value
increased from $87 .soo to $107.400. a
23-percent rise. The increase in value
occurred largely among families with
incomes of $50,000 and more. Increases
in home and vehicle assets more than
offset the declines in the median holdings
of less widely held assets.
Liabilities
Families hold many types of debt,
including home mortgages, credit cards,
lines of credit, automobile loans, and
investment real estate. The largest finan·
cial obligation for most families is their
home mortgage. Because of changes in
the tax treatment of consumer interest
payments, it was expected that families
would increase the proportion of debt
secured by their principal residence.
However, mortgage plus home equity
line of credit, in real terms, actually
declined as a proportion of total family
debt between 1983 and 1989. Even
though the level of real total home
equity debt increased, other forms of
debt increased even more. In particular,
credit-card debt and automobile loans
grew substantially over this period. The
increa!ied use of home equity lines of
credit was concentrated in the high·
income groups (table 2. p. 29).
30
The overall proportion of families using
any line of credit fell from 12 percent in
1983 to 7 percent in 1989. Among most
families, the proportion holding credit·
card debt increa!ied. Exceptions included
non-White and Hispanic families and
single-parent families. Also, despite the
unfavorable tax treatment of automobile
loans. both the number and the median
amount of car loans increa!ied for most
families.
The proportion of families holding any
type of debt rose from 70 percent in
1983 to 73 percent in 1989. Rl".al median
debt rose 13 percent and real mean debt
by 42 percent, from $31.700 to $45,000.
Although the median debt rose for
all income groups, the increase was
greatest for those with incomes of
$20,000-$29.000--nearly SO percent.
Median debt for childless couples with
heads under SS years of age more than
doubled.
One measure of consumers' ability to
repay loans is the ratio of nonmortgage
debt payment<~ to income. For aU income
and demographic groups. the median
payment-to-income ratio shifted upward
between 1983 and 1989.
Source: Kennickell. A. and Shuck-Marquez, J ..
1992. Changes in family finunces from 1983 to
1989: Evid~nce from the Survey ofCon~umer
Finances. F ttlmtl Rtun•t Bullttin 781 1): 1·18.
Family Economics Rtvltw
1992 Vol. 5 No. J
Regular Items • Recent Legislation AtTecting Families
Public: Law 102-237 (enKttd
Detember 13,1991)-the Food.
Agriculture. Con~~ervation. and Trade
Act Amendments of 1991 require the
Farmers Home Administration to
allow u farmer-borrower who hafl been
affected by disasters during at least two
previous crop-years to exclude the lowest
annual yield from the calculation of the
farm's projected future yidd. The bill
also authori7.cs the Dcpanment of
Agriculture to establish a mral health
leadership development program.
Public: Law 102·242 (enaded
Detember 19, 1991)-Guthorizes the
Federal Deposit Insurance Corporation
(FDIC) to borrow an additional $25
billion from the Treasury of the United
States. The bill will reform the Federal
deposit insurance system. protect the
deposit insurance funds, and improve
supervision and regulation of the disclosure
relating to federally insured depository
institutions. The primary means of
insuring deposits at commercial banks
will still be premiums paid by banks on
those deposits; premiums will increa.4ie
if those deposits are used to fund riskier
investments. Under the bill. financial
institutions are required to disclose the
interest paid to depositors.
Public: Law 102·243 (enacted
Detember 20, 1991)-amends the
Communications Act of 1934to prohibit
cenain practices involving the usc
of telephone equipment for advenising
and solicitation purposes. The bill
makes it a violation of Federal law for
any person to call another puny usintt
automatic telephone dialing equipment
or prerecorded voice. Under the law.
the receiver of such a cull may sue the
caller for damage!!.
Publk Law 102-2$0 (maded
Marth 5, 1992)-umendllthe
ReclamatiCln Statell Droupt Allliilitance
Act of 1988 to extend the period of
time during which the Secretary of the
Interior may provide drought asllilitance.
The Secretary may. over a 10-yeur
period. undenake conlitruction. rrumas,e·
ment. and con~~ervation activitie1110
minimi1.e los.'i and damas,e from droupt
conditions. The bill al110 pennit111he
Secretary to make intere!it-bearing loans
to water u~~ers wishing to augment
water 11upplies.
Publk Law 102-%73 (oaded
Aprll21, J99l)-authori7.es jurisdic·
tions receiving funds under the HOME
Investment Pannership Act that are
allocated for new construction to usc
the funds for fiscal I 992 for other
eligible activities under the Act. at
the discretion of the jurisdiction. (The
HOME Investment Purtnef'!lhip Act was
created under the Cranston-Gon7.ale7.
National Affordable Housing Act
(Public Law 101-625) in 1990 to
provide block grants :o State and local
governments to meet local housing
needs.) The Jaw al110 amend.<~ the
Stewart B. McKinney Homeless
Assistance Amendment<~ Act of 1988
(Public Law 100-628) to authori7.c
local govemment'i that have financ:ed
housing project!l and have a Section 8
financial adju!ltment factor to refinance
these projects and usc recaptured
amounts for housing activitie!l.
• Current Regional Research Project
NC-170. Reducing .
Pesticide Exposure of
Applicators Through
Improved Clothing
Design and Care
Administrative adviser:
Dr. S.T. Betsinger
University of Minnesota
St. Paul, MN 55108
Cooperatlna States (Un!venltles):
University of California-Davis,
University of Georgia, University of
Illinois, Purdue University (Indiana).
Iowa State University, Kansas State
University, University of Maryland
Eastern Shore, Michignn State
University. University of Nebraska.
Oklahoma State University, South
Dakota State University, and University
of Alberta (Canada).
Project dates: October 1987 to
September 1992
Objectives: Develop and/or evaluate
textiles and protective clothing that
meet users' physical. sociopsychological,
and economic needs. Determine the
mechanisms by which pesticides con·
laminate textiles and the mechanisms
that enhance the removal of pesticides.
Approach: Rural and urban households
were surveyed to determine attitudes
toward the use and disposal of pesticides
in domestic settings. Field studies,
using actual working conditions. were
used to assess the need for protective
clothing in specific !iltuation!i as a basis
for designing prototype garments.
Videotape!! of equipment handling and
glove removal were used to !IUpplement
exposure datu. Protective attributes of
32
various textiles toward pesticide penetration
were !ltudied. Fabrics varyins
by weight, construction. fiber content,
and finishes were contaminated with
selected pesticides. Pesticide removal.
using an established laundering procedure.
was meu.'lured. Effect!! of dust and
perspiration on pesticide penetration
and trun11mittunce were determined. A
random block deKign was used.
Progress: Survey and laboratory data
were analyzed. Research varied by
University. Personnel in Alberta studied
clothing and laundry practices of farm
families who use pesticides. Th~ in
California investigated the transfer of
pesticide from carpet material to clothing
material. In Illinois, they studied the
chemical resistance and structural integ·
rity of protective gloves. Researchers
in Iowa determined the use of pesticides
in the home. In Kansas. they studied the
use of household starch all a pesticide
barrier. Michigan researchers determined
pesticide buildup on gloves. Those in
Oklahoma investigated how fabric
influenced perceived moisture sensation.
Decontamination procedures through
various laundering treatments and
conversion to nontoxic products were
studied by researchers in Alberta.
Georgia, Illinois, Indiana. Iowa.
Nebraska. and South Dakota. Alberta
evaluated the effects of a 3-hour chlorine
bleach soak and wash cycle in n:moving
specified pesticides and subsequent
loss of color in dyed fabrics. Also, the
Alberta facility studied how to convert
selected pesticides used by greenhouse
workers to nontoxic products. Georgia
determined the effects of cold water
laundering on bacterial n:moval or
!lurvival from assorted fabrics using
commercially available laundry
detergent!!. Georgia ul10 J~udied the
colorfastnes!l of stain re.istant. commer·
cially available carpets after repeated
home pesticide use.
Stleded publkatloal:
Laughlin. J. and Ciold. R.E. 1990.
Levels of water hardness. detergent
type, and prewuh product use as
factors affecting methyl parathion
removal. Clothing and TC'xt/IC's
Rt'sC'arcll Journal 8(4):61-67.
Ruheel. M. 1991. Pesticide transmission
in fabrics: Effect of perspiration.
Bu/IC'tin of EnvironTMntal Contamination
and ToxicoiORY 46:837-844.
Shaw. A. and Hill. K.R. 1991. Effect
of exposure time on the sorption of
pesticide emulsifiable concentrates
through microporous fabric!!. Bu/IC'tin of
Environmtntal Contamination anJ
Toxicology 46:4S-S2.
Slocum. A.C. and Shern. L.C. 1991.
Spray deposition patterns during
simulated work ac:tivities by lawn-care
specialist'l. Journal of Em·ironmtntal
ScitncC' and Ht'altll 826(3): 259-278.
Stone. J.F .. et al. 1988. Relationshi~
between clothing and pesticide poisoning
symptoms among Iowa fanners.
Journal of En\•ironmtntal Ht'olth
50(4):210-215.
Family F~la Rtvlew
• Data Sources
Statistics of Income (SOl)
SponsorlnaaaeMy: U.S. Department
of the Treasury
Population covered: U.S. individual
and corporate taxpayers
Sample size: About I I 0 million
individual Federal taxpayers;
84,000 corporate taxpayers in 1987.
Geographic distribution: Nationwide
Yean data collected: Annually since
1916
Method or data collection: Income tax
forms
Future surveys planned: Annual
National Longitudinal Surveys
of Labor Market Experience
(NLS)
Sponsoring agency: U.S. Department
of Labor and the Center for Human
Resource Research of the Ohio State
University
Population covered: U.S. civilian non·
institutionalized population of Older
Men (ages 45-59), Mature Women
(ages 30-44), Young Men (ages 14-24),
and Young Women (ages 14·24).
Sample size: About 5,000 individuals
in each age/sex category in original
sample; between 2.000 and 3.500
individual!! in each category in current
!lurveys.
Geographic distribution: Nationwide
I 992 Vol. 5 No. J
MaJor variables: SalarieA and wases,
interest income. dividends, State tax
refunds, self-employment Income,
capital gains, pension!!, Social Security
benefits, alimony received, alimony
paid, moving expen~~es, medical and
dental expense!!, home mortpJe imeret~t,
charitable contribution!!, earned income
credit, child-care credit, exemptions,
deductions, marital 11tatu11. Data on sole
proprictt-rships. partnerships. corpora·
tions. foundations. sales of capitaJ assets,
estates and associated beneficiaries,
foreign tax credit, and foreign activities
of U.S. citizen11.
Yean data collected: Annually or
biennially. Older Men, 1966-83, 90;
Mature Women, 1967-89; Young Men,
1966-81; YoungWomen,l%8-88,91.
Method of data collection: Personal
and telephone interviews
Future surveys planned: Mature
Women,l992
MaJor variables: Current labor fon:e
and employment status, local labor
market characteristic!!, migration,
job characteristic!!, work experience,
military service, volunteer work,
education and training, educational and
occupational aspirations/expectations/
attitudes. time use, marital and family
choracteri!ltics, financial chanK:teristics,
health, and child care.
Source for further Information
and data: Available tax lapei include
Individual Tax Tape11, County Migra·
lion Data. Charitable Orpnl7.adon~>
Study 1983and 1985. and Corpor.ate
Tax Tape1.
Reporu on the rmdinJ,C include toiUdieii
on preliminary tax daUI. pmorual
wealth, Ciliate taxes, and inter·
generational wealth. Also available
are source books that provide data on
corporations. sole proprieton~hips. and
partnerships.
For tapes. repons, and soun:e book.4i
contact:
Director, Statistic11 of Income
Division (R:S)
Internal Revenue Service
P.O. Box 2608
Washington. D.C. 20013-2608
General qUC!Itions may be directed to
(202) 874.0410.
Topical data files are available on
weekly work histories. fertility vnri:Jbl~.
merged mother-child files, childhood
living Dmlllgement"· illegal activities.
and sub!ltancc and alcohol abuse.
Source for further lniOI"'IUUtloa and
data: The NLS Handbook. a quarterly
newsletter. annotated bibliographies.
rescarc:h summaries and report."· data
tapes. and CO-ROM's are a\•uiluble
from:
NLS Public U~~er's Office
Center for Human Rooura: R~un:h
921 Chatham Lane, Suite :!00
Columbu."· OH 43221·:!418
(614)442-733S
Questions about the ~Ur\"e)' may he
directed to this !lllme office.
.---·--- - ---------- ----·-
Charts From Federal Data Sources
Trendaln relltlve Income of lndlvlduala, by age and eduC8tlon, 1111and 1111
Education
High
71.2 83.2 74.8 82.15 Middle
Low
All < 18 years 85 years and older
Low relative income- equivalence·adjusted1 income less than one·haH of median equivalence-adjusted Income.
Middle relative income- equivalenc.adusted income between 0.5 and 2.0 times that of median.
High relative Income - equivalence-adjusted income at least twice that of median.
1Equivalence-adjusted- after each person Is asllgned an Income value equal to the Income of the petSOn's family, a set of equivalence f.:tors Is
uled to adjust Incomes lor differences In family size.
Source: U.S. o.,BrtmtJnt of commerce, Bureau of,. C.n1u1, 1991, Trendl In R•la~M tnr:orn.: 1964 to 1989, Cunwnt Pop#Mtlon ~
Con1umer /fiC()mt, S.ritl P-80, No. 177.
34
Percent.ge of chlldlela women expecting 1 future birth, by employment or achool enrollment
ltltua: June 1178 and 1110
Age
20-2•
2S-2t
»3-1
1976 1990
~·eu ........... eu
~WJ..., ~~· ... 1
~-' ~ 141.8 ,
NA
In labor force or in school D tU
AllotherF
Percentage of chlldiHa women expecting a future birth, by educational attainment: June 1171
and 1990
1·3 years college
Age
1976
1------..---..:!46:::.::.8"--_ _j
15.9
NA
66.2==:J
20-24 ~------....-:67,0==-:J
2s-29 48.7 I
»34 L......3! 3~·c1.: ..____I
35-39 NA
20-24 ~ 89.2
:: ~b-.:.:.r..:. ... .- =.-=.-.:..-.:..5~~8.8~-----'1
35-39 NA
1990
b:J~,_j·---82....3Ji
6t9 - I 1------,.,..,-------.:'6.7.6 -1
I 72.2 -.
1-----.__,.71_.,5--~- -~~
46J
~~~~3. __-~ ,~---~
Sourc.: O'Connt/1, M., 1H1, St~tln .W.ran Flrtlllty, utt ExP«(Itlont: ChlldbHrlrtg P1tttm1 oi AlnlrlcMI Womett lor lhl 1HO'I. eurr.nt
Populltlon R~l. Sp«/11 S~, S.rfH P·23, No. 1 7e, U.S. o.,Mrfmlnt of Com~M~'t:.. BufNU ol lhl Clnlus.
1992 Vol. j No. J 3.5
•
Poverty Thresholds
Weighted 1verage poverty thresholct.1 for nonf1rm flmllles of ..,.clfted elze, 1111 1 1
Unrelltld lndlvldUIII
Clltndar
ye~~r Under Age85
All ages age85 or older All ages
1MS 11.582 $1.628 $1,512 $2,048
1888 1,835 1.1S85 1,585 2,115
1987 1,875 1,722 1.800 2,188
18 1,748 1,797 1,887 2,282
1989 1,840 1,893 1,757 2.383
1970 1,954 2,010 1,881 2,525
1971 2.040 2.098 1,940 2.833
1972 2,109 2.168 2.005 2,724
1973 2.2"7 2,307 2.130 2,895
1974 2,495 2,582 2.384 3.211
1975 2.724 2,797 2.581 3,506
1978 2.884 2.959 2,730 3,711
1977 3,075 3,152 2,906 3,951
1978 3,311 3,392 3,127 4,249
1979 3,689 3,778 3,479 4,725
1980 4,190 4,290 3.949 5,383
1981 4,820 4,729 4,359 5,917
1982 4,901 5,019 4,626 6.281
1983 5.061 5,180 4,775 6,483
198-' 5.278 5,400 4,979 6,762
1985 5,469 5,593 5,158 6,998
1988 5,572 5,701 5.255 7,138
1987 5,778 5,909 5,447 7,397
1988 6,024 6,155 5,674 7,70-'
1989 6,311 6,451 5,947 8,076
1990 8,852 6,800 8.268 8.512
19912 6,932 7,088 8,532 8,887
Famlltl of 2 ,.... .......... or more
2
Houleholdlr HouMholdlr 3 4 5 e
under tlgle5 periOM PlfiO"I PlfiO"I PlfiO"I
age85 or older
$2,114 11.908 12.514 13.223 13,717 14.264
2,185 1.970 2,800 3.335 3,830 4,.410
2.238 2.017 2.881 3,410 4,011 4.518
2.333 2,102 2.774 3.553 4,1ee 4.708
2.458 2.215 2.124 3,743 4,.415 ....
2.804 2.348 3,oet 3.888 4,8e0 5.2e0
2,718 2.448 3.229 4,137 4.880 5.419
2.808 2.530 3.339 4.275 5,0U 5.m
2.98-' 2.888 3,548 .. .5"0 5.351 8.028
3.312 2.982 3,138 5.031 5.050 e.eee
3,817 3.257 4,213 5,500 8.4ee 7.318
3,828 3,445 4.5"0 5.815 8.878 7.7tiJ
4,072 3.688 4,833 8.191 7.320 8.281
4,383 3,94-' 5.201 8,882 7.880 8M1
4,878 4,390 5,784 7,412 8,775 9.91 ..
5,537 ... t83 8.585 8,414 1.888 11.288
6,111 5,498 7.250 9.287 11.007 12.449
6,487 5,838 7,693 9.862 11,814 13.207
8,897 8,023 7,938 10,178 12.0-'9 13.830
6.983 8.282 8.277 10.809 12.5ee 14.207
7,231 6.503 8.573 10,989 13.007 14,196
7,372 8,830 8,737 11.203 13.259 14,988
7,641 6,872 9.058 11.811 13.737 15.!08
7,958 7,158 9.435 12.012 14.305 18,141
8,343 7,501 9,885 12.875 14,et0 18.921
8,194 7,906 10,419 13.360 15.800 17.835
9,164 8.238 10.857 13,921 18,457 18.580
Annuli ...
CPI ... illml
(1 812-&1•100)
31.5
32.5
33.A
34.8
38.7
38.8
40.5
41.8
44.A
.. 9.3
53.8
58.9
80.8
85.2
72.8
82.4
110.9
t8.5
ee.8
103.1
107.8
1QSI.8
113.8
118.3
124.0
130.7
138.2
'The powtty ttnaholdlare UMd by the Bu....u of the Census to prepare ltlllldilkal...,.• of the number of lnclvlcMIIInd
In poverty. The poverty guldlllnle are a simplified version of theN poverty thmholdl and arelaued by the ~of
Human SeMen for administrative purposes. The poverty guidelines are UMd to dltttmlnl whether a person or family Ia llo
tllgible for auiiWnce or HtVicet under 1 particular Federal program.
2Prellmlnlry data: 1990 weighted average poverty levels railed by 4.2 percent to corretpOnd with tht 1ee11nctNM from the 1
Consumer Price Index (C"I·U) for all urbln consumers.
36 F..Uy~ .....
(j
• Cost of Food at Home
Coet or food at home Htlmlted for food plana at four com levela, June 1112, u.s . .......,.1
Colt lor 1 WMk Colt for 1 month
Stx-.ge group Thrifty Low-egst Modtrat. Lkal Thttfty Low-eoet Model*- Ll»rrl
plan plsn COlt plan plan plln plln c;oet plln plln
~LlE.S
Family of 2~
20 • !50 year~ .•.•••..•.•••••.•.• $48.00 seuo s1e.oo 18UO 1212.150 1287.80 1328.70 $408.10
51 yeara and ovtr ............... 48.150 5UO 73.00 87.30 201.30 267.10 31UO 378.20
Famllyof4:
Couple, 20 • !50 yttiFI and children-
1•2and3•5ytaFI .... ........ 71.!50 89.20 108.70 133.150 310.20 388.80 471.20 571.50
8·8and9·11 year~ ........... 82.00 104.90 130.80 157.40 355.150 454.40 588.80 682.10
INDIVIDUAI.f.
Child:
1•2yeaFI ..................... 13.00 15.80 18.40 22.30 58.40 M.!IO 78.70 •.eo
3·5yeaFI ..................... 14.00 17.20 21.20 25.40 80.80 74.80 91.80 110.00
e. 8 year~ .....• •...••... ... ..• 17.10 22.80 28.150 33.20 74.10 88.70 123.40 143.70
9•11 yeaFI . ..... .............. 20.40 25.90 33.20 38.4(' ea.20 112.20 143.80 1euo
Male:
12 • 14 yeaFI ...............•... 21.10 29.30 38.150 42.90 91.150 127.00 158.30 185.80
15 • 19 yeaFI ..•............••.. 21.90 30.30 37.80 43.150 94.90 131.20 182.90 118.70
20 • !50 yeaFI ....•..•..•.•...•.. 23.40 30.00 37.30 45.20 101.80 129.80 181.80 185.80
51 year~ and over •..•......••.•• 21.30 28.40 35.00 41.90 92.20 123.10 151.!10 181.30
Female:
12 • 19 ytiFI .........•...••.•.. 21.30 25.30 30.70 37.10 92.20 109.70 132.90 180.80
20 ·!50 yeaFI ................... 21.10 26.20 31.80 40.80 91.80 113.70 137.80 178.10
51 year~ and over ...•.• ... ...... 21.00 25.!50 31.40 37.150 90.80 110.80 138.20 182.50
1 Auumes that food for all meals and anacklla purchaled at the llore and prepared at home. Eltlmalel for the thrifty food plan weN
computed from quantities of foodl publllhed In FMnlly Economlcl Ravltw 1984( 1). EltlmatH for the other plana weN computld from
quantities of foodl publllhed In Family Economlcl RevlrN 1983(2). The costs of the food plana are Hllmated by updating prtoes paid by
houlehoidlaurveyed In 1977-781n USDA'I Natlonwlde FOOd Conaumptlon Survey. USDA updalellhete aurvey prices Ullng Information
. from the Bureau of Labor Staliltlcl, CPI O.ta/1«1 R.,ort, ta~ 4, to Hllmatethe COlli for the food plant.
~en percent added for family llze adjultment. See footnote 3.
3rhe COlli given are for Individual• In 4-perJOn families. For lndlvlduala In other alze families, the following adjuatments are auggeated:
1-person-edd 20 percent; 2·person-add 10 percent; 3-peraon-edd 5 percent; 5- or e-ptl'10n-IUblract 5 percent 7· or rnore-pmon-
IUbtriCt 10 percent.
1992 Vol. j No. J 37
•
Consumer Prices
ConiUIMf' Price IndeX for Ill urbln COftiUIMf'l [1H2-14 •100)
Group
Alllttmt ••••••••••.•••••••••••• ••• •••••••••••••••
Food ••.• I •••• I •• I I.' I. I I' ••• I It I I ••• I I I I' I I. I'
Food at home .•.••••••••••••••••••••••••••••.•
Food away from home •••••••• • •••••••••••••••••
Hol.lllng •••••••••••••••••••••••••••.•••••••••••
Shetter •.•.••• ; .••••.••••••••••••••••••••••.••
Renters' cottt .............................. .
Homeowners' costa 1
••••••••••••••••••••••••••
~lnaurance1 •• • ••••••••••••••••••••
Maintenance and repairs ••••••.•.•...••.••.•.••
Maintenance and repair servlcn ••.•.••..•.•••.
Maintenance and repair commociHin •••••••••••
Fuel and other utiiHitt ••.••••••••••.••••••.••••••
Fuel oil and other household fuel commoclitlet ••••••
Gas (piped) and electricity ..................... .
Household fumishlngt and operation .•.•••••..•••.•
Houtefumlthlnga ••••••.••.•....•••••••••••.••
Housekeeping suppllet •.••••••••••••.••.••••••
Housekeeping services .••.•..•••.••...•.....••
Apparel and upkeep •••.•••.••••..•••.•••....••...
Apparel commociHies •...••.••.••••.•••.•.••••••
Men't and boyt' apparel ••.•..••••...••.•.•••..
Women'• and girls' apparel . • •..••••••••••.•.•••
Infants' and toddlers' apparel ............ . ...... .
Footwear .•..•.••..••..•.• •• ..•••.••.....•.•
Apparel ttrvlcet •.••.••••••••••.•..•..••• ••••. •
Tranaportatlon •••..•••.•••••.•.• ••••••• ••..•....
Prlvatetranaportation .•.•..•.•.••..••.•.•..•..•.
New vehlcln •••..••...••••..••••.•.•••••.•. •
Used cars .................................. .
Motor fuel •••.•••....••..••.••••...••.•...•.•
Automobile maintenance and repair .••. •••• . .• .••
Other private transportation ••• •..•..•.•••••••.•.
Other private transportation commodities .•••...•
Other private transportation services ..•...•....•
Public tranaportatlon ••..•.•.•.....•.•• •• .••. ••• •
Medical care .......... . ........................ .
Medical care commoclitin ..•.•...••..••••.•.•...
Medical care ttrvlcet •••••••••••••.•.•.•••••••••
Proft11lonal medlcalttrvlcn •••••••.••.••.•••••
Entertainment ••••••••••.•••.•..••••.•••••••••.••
Entertainment commodities •..••.••••••••• •• .•.•.
Entertainment ttrvlcn •••..•....•••••••••.•...••
Other goods and ttrvlcn ••.•••••••.••.••.•..••••••
Personal care .................. . ............. .
Toilet goods and personal care appllanctt •••••.•••
Personal care ttrvlcet •••••••••••••.•••••••.•••
Personal and tducatlonalexpenttt • •• ••.•.•••••.••
School books and aupplltt •.•.•.••.•.•.•.•••.•.
Personal and educational ttrvlcn ••••••.••.•••• •
11ndtJCH on a Dtc:tmbtr 1H2 • 100 biN.
Source: u.s. Department of Labor, Bureau of Labor Statiatica.
38
June
1992
140.2
137.4
138.1
140.7
137.7
1151.1
161.0
155.0
142.0
128.5
133.1
122.3
119.0
90.1
117.4
118.2
109.1
129.8
132.6
131.0
128.4
126.2
128.2
129.6
125.4
148.6
126.9
125.4
129.1
123.1
102.9
141.2
152.6
104.6
163.5
145.3
189.4
188.0
189.7
175.4
142.0
131.3
155.3
181.5
137.8
135.7
139.9
194.6
189.1
195.2
Unadjusted Indexes
April May
1992 1992
139.15
138.1
137.4
140.2
136.5
150.2
160.1
154.2
141.1
128.0
132.2
122.4
1115.8
89.9
111.3
118.0
109.7
129.0
130.5
133.3
131.1
127.8
133.1
131.3
125.6
148.7
125.2
122.9
129.1
117.9
95.0
140.5
152.4
104.8
163.2
154.7
188.1
187.9
188.1
174.1
142.0
131 .4
155.2
180.3
138.5
137.0
139.8
193.9
188.7
194.5
139.7
137.4
136.2
140.4
136.7
150.2
159.5
154.4
141.4
128.1
131.9
123.0
116.8
89.8
113.0
117.9
109.2
129.5
131.0
133.1
130.9
127.5
132.6
130.3
126.0
146.8
126.3
124.3
129.2
120.5
99.4
140.8
152.5
104.8
163.2
151.6
188.7
187.6
188.9
174.7
142.0
131 .2
155.3
181.3
138.0
136.1
139.8
194.0
188.4
194.7
136.0
137.2
137.4
137.9
133.4
145.8
155.1
149.7
138.5
126.2
129.9
121.3
115.8
89.3
114.4
115.9
107.5
129.0
127.2
126.9
124.4
124.0
124.7
129.8
120.2
143.0
123.7
121.9
125.8
118.8
100.5
135.6
148.0
103.4
158.0
146.6
176.2
176.5
176.1
165.3
138.1
128.3
150.3
170.0
134.7
132.2
137.3
180.6
179.1
181.0
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