Family Economics Review [1976, Number 2]

              HIGHLIGHTS/SPRING 1976
THE FARM FAMILY LIVING SURVEY
CANNING AND FREEZING
HOW HOUSEHOLDS USE ENERGY
THE IMPACT OF INFLATION
PROPERTY OF THE
tt~RARY
JUN 2 2 1976
uNIV~k!:>ll V OF NORTH CAROLINA
AT GREENSBORO
ARS-NE-36
Consumer and Food Economics Institute
Agricultural Research Service
U.S. DEPARTMENT OF AGRICULTURE
FAMitY ECONOMICS REVIEW is a quarterly
report on research of the Consumer and Food
Economics Institute and on information from
other sources relating to economic aspects of
family living. It is prepared primarily for home
economics agen.ts and home economics
specialists of the Cooperative Extension
Service.
Authors are on the staff of the Consumer and Food
Economics Institute unless otherwise noted .
Editor: Katherine S. Tippett Editorial Assistant: Sherry Lowe
Consumer and Food Economics Institute
Agricultural Research Service
U.S. Department of Agriculture
Federal Building
Hyattsville, Md. 20782
FAMILY E 'ONOMIC REVIEW
FAMILY EXPENDITURES: THE FARM FAMILY LIVING SURVEY 1
by Fred C. Thorp
Statistical Reporting Service
During 197 3 and early 197 4, the Statistical
Reporting Service of the U.S. Department of
Agriculture conducted a comprehensive survey
to determine living expenditures for farm oper­ators'
families . Data were collected from 2,600
families by personal interviews.
Expenditures in 1973
The survey results indicate farm families in
the United States spent an average of $9,317 in
1973, or a total of $27 billion. The family
income from farm and nonfarm sources, before
taxes, averaged $12,371 and after taxes,
$10,965. et farm income rose to $33 billion
in 1973 from $18 billion in 1972, so expendi­tures
in 197 3 may have been somewhat atypi­cal.
However, the expenditure patterns follow
earlier survey findings .
Housing, food, and clothing usually referred
to as the basic categories accounted for 57 .4
percent of the total expenditures.
Housing, including shelter, household opera­tions,
furnishings, equipment, and utilities took
the largest amount-$2,671 per family or 28.7
percent of the total expenditure. Of each dol­lar
spent for housing, about one-half was for
shelter, one-fourth for furnishings and equip­ment,
and one-fourth for the operation of the
household. This breakdown is fairly consistent
for all economic groups.
Food, excluding the value of products con­sumed
on farms where grown, but including
nonalcoholic beverages, meals eaten away from
home, and food stamps was second with 21.6
percent of th total, or an average of $2,021.
Food stamps accounted for $7 .24, or about 0.1
percent of the average family expenditure.
About 82 cents of the food dollar expenditure
went for food and nonalcoholic beverages used
at hom . Food consumed away from home
a~count d f r roughly 18 cents. The percent­age
of the food dollar used for food away from
hom tended to decrease as income decreased.
'This article is condensed from a paper given at the
alional Al(riculturul Outlook onference in Novem­b
r 1975. The complete paper may be ordered from
the on ·um<>r and Food Economics Institute (see
pagc 2 of cover for addr ss).
SPRl G 1976
The survey did not ask highly detailed ques­tions
on food purchases; nor were families
asked to keep a diary. The questions asked for
usual amounts spent per week or per month.
Transportation constituted the third largest
component of family spending. The purchase,
operation, and maintenance of motor vehicles
took 17.6 percent for an average of $1,639.
Almost one-half was for the purchase of motor
vehicles. The transportation dollar breaks down
into an average of 46 cents for the purchase of
motor vehicles, 40 cents for operating ex­penses,
12 cents for maintenance and repair,
and 2 cents for other travel and transportation.
Hig:1er income families spent more of their dol­lar
on the purchase of vehicles and less on
operating expenses, the reverse being true for
lower income families. Maintenance and repair
took roughly 12 cents of the transportation
dollar for all income classes.
Clothing expenditures were a distant fourth
in importance with 7.0 percent of the total, or
an average of $648 per family . The share of the
clothing dollar averaged 34 cents for purchases
for females ages 16 and over; 10 cents for girls
2 to 15 years of age; 31 cents for males 16 and
over; 10 cents for boys 2 to 15 years of age;
2 cents for children under 2 years; and 13 cents
f6r materials and services which were not iden­tified
with individual family members. This
allocation of the clothing expenditure was
generally true for all income classes.
Medical care cost each family an average of
$624 and accounted for 6. 7 percent of total
expenditures. Health insurance premiums made
up 38 cents of the dollar spent for medioal
care. The percent of the dollar decreased as
income decreased, going from 42 down to 31
percent. However, this does not necessarily
mean that the lower income families have less
protection, since more of them have off-farm
jobs that include health benefits.
Gifts and contributions made up 3.9 per­cent
of the total, followed by personal insur­ance
with 3.4 percent. About 2.3 percent of
the family expenditure was for personal care.
Recr ation, reading, education, tobacco, alco­holic
beverages, and other expenditures
3
accounted for the remammg 8. 7 percent. Of
these items, education. with 1. 7 percent or an
average of $160, was the largest, followed
closely by recreation and reading with 1.5 per­cent,
or an average of $140.
Changes in Spending Patterns Between 1955
and 1973
The last comparable expenditure survey
conducted by the Department of Agriculture
(USDA) was in 1955 and included 3,845
respondents. Rural farm family expenditure
data are available for 1961 as a part of the
Bureau of Labor Statistics (BLS) nationwide
survey of consumer expenditures. These data,
however, are not directly comparable with the
1955 and 1973 surveys because of some differ­ences
in concepts and collection procedures.
The farm family averaged 3.5 persons in
1973, down from 3.8 in 1955. The average age
of farm operators (head of household) in the
197 3 survey was 50.4 years, compared with
49.6 years in 1955. Total expenditures for
family living in 1973 were more than $9,300.
This is nearly triple the average expenditure of
$3,300 in 1955. When the change in price level
is taken into account, real consumption was up
about 70 percent. In 1973, U.S. farm families
were using a smaller proportion of their total
expenditures on food, clothing, medical care,
tobacco, and alcoholic beverages than in 1955.
A greater proportion of the family expendi­tures
was used for transportation, education,
personal insurance, gifts, and contributions.
Housing was the largest expenditure group­ing
for farm families in both 1955 and 1973,
accounting for 28.1 percent of total expendi­tures
in 1955 and 28.7 percent in 1973. Com­pared
with 1955, a greater proportion of the
197 3 housing dollar was used for shelter and
less for furnishings and equipment and house­hold
operations. In 1973 about 47 percent of
the housing dollar was for shelter compared
with 38 percent in 1955. Expenditures for
food and beverages predictably decreased in
importance from 25.2 to 21.7 percent. Tradi­tionally,
food responds less than other cate­gories
to increases in family income. The larg­est
percentage increase between the 2 years
occurred in automobile expenditures. These
rose from 11.0 to 17.2 percent of total expend­itures.
Auto sales were a record high in 1973
and farm families were using a significant par-
4
tion of their income for auto and truck pur­chases.
Respondents were asked to report
motor vehicle purchases for 1970 through
1973. The family share (excluding costs
charged to the farm as production expenses) of
all motor vehicle purchases averaged $298 for
1970, $433 for 1971, $691 for 1972, and $756
for 197 3. Expressed as a percent of operator's
realized net farm income, the purchases would
represent 7, 12, 14, and 10 percent for those
four years. This shows a substantial upgrading
of transportation in 1971, 1972, and 1973.
Clothing expenditures declined sharply as a
proportion of total spending, from 13.0 to 7.0
percent. Also, tobacco and alcoholic beverages
took a sharply smaller proportion of spending
in 1973 than in 1955. Expenditures for educa­tion
and personal insurance were up substan­tially
in 197 3. About the same percentage of
total expenditure was used for recreation and
reading and personal care in 1973 as in 1955.
Spending Patterns Related to Farm Product
Sales
Survey data have been summarized by
economic class of farms based on income from
sales of agricultural products. Below are the
sales classes and percent of farm families in
each group.
Farm product sales
Stratum 1 - $40,000 or more . . .... .
Stratum 2 - $20,000 to $39,999 ... .
Stratum 3- $5,000 to $19,999 .... .
Stratum 4 - $1,000 to $4,999
Stratum 5- Less than $1,000 ..... .
Percent
18.9
14.5
24.8
25.7
16.1
On average, off-farm income made up over
one-half of the money income before taxes for
all farm families. For Stratum 1 farms, it aver­aged
about 25 percent of total income and
climbed to over 90 percent for Strata 4 and 5.
Money income before taxes was $21,700 for
Stratum 1 farms, th n dropp d to $12,400 for
Stratum 2. Stratum 3 farms averag d $10,300,
Stratum 4, $9,500, and Stratum 5, $9,000.
The housing category was the largest
expenditure for all strata farms and accounted
for 28 to 30 percent of the family budget. In
this category, the averag exp nditure for shel­ter
ranged from $1,824 per y ar for tratum 1
FAMILY ECONOMI REVIEW
farms downward to $941 for the Stratum 4.
Family spending for furnishings and equipment
ranged from $1,117 for Stratum 1 to $507 for
Stratum 5. Household operation costs were
between $675 to $700 for Strata 3 to 5, $757
for Stratum 2, ·and $852 for Stratum 1·.
Food ranked second in overall importance,
with expenditures taking a greater proportion
of the total as the income levels dropped. Food
accounted for 18.6 percent of the total for
Stratum 1 farm families and 24.6 percent in
Stratum 5. Actual expenditures ranged from
$2,526 for Stratum 1 to a low of $1,776 for
Stratum 4.
Transportation made up about 16 percent
of total expenditures for Strata 1 and 2 farms,
17 percent for Stratum 3, and over 19 percent
for Statum 5. Expenditures for purchases of
motor vehicles for Stratum 1 averaged $1,189,
more than 1% times the outlay for Stratum 2.
The expenditures for farms in Strata 3 through
5 were between $600 and $650. Strata 1 and 2
spent the most on vehicle maintenance and
repair, at $241 and $205, respectively. The
remaining groups spent an average of $175 to
$180. Operating expenses averaged $740 for
the larger farms then dropped to $615 to $635
for Strata 2, 3, and 4, but went up to $685 for
Stratum 5. This probably reflects more driving
to off-farm jobs.
Clothing expenditures as a percent of total
expenditures for family living ranged from 6.5
to 7.4 percent for various strata. The dollar
expenditure for Stratum 1 was nearly $1,000,
then dropped to $707 for the next stratum,
and averaged $602, $493, and $504 for the
next three respective groups. This same pattern
held for purchases of men's, women's, and chil­dren's
clothes.
Medical care required 6 to 7 percent of the
family budget. Annual expenditures followed
income, amounting to $885 for farms with the
upp r incom to $472 for farms with the least
income.
Personal care also followed income,
accounting for 2 to 2.5 percent of total family
living xpenditures. Tobacco and alcoholic
beverages made up about 1 percent of the total
exp ndilure for each strata. Recreation and
.reading, education, personal insurance, and
cash gifts and contributions outlays all decreas­ed
a income deer as d, both in terms of dol­lars
and a a percent of total xp nditures.
SPRING 1976
Percent of Families Rej)orting Selected
Expenditures
The survey data indicated that about 80
percent of the farm-operator families owned
the dwelling they occupied. This is based on 81
percent of the respondents reporting property
taxes paid on owner occupied dwellings. Cash
spent for living quarters was reported by 12
percent of the families. The remaining families
had other arrangements for housing, such as
house included with farmland rent, living with
parents, or living in a rent-free dwelling.
Health insurance premiums were paid by 72
percent of the families. By farm income
groups, the percent reporting were 83, 79, 70,
71, and 60, respectively, for Strata 1 through
5. Hospital expenses were reported by about
one-fourth of the families, with the percentage
ranging from 22 for the lower income group to
27 percent for the upper income farms.
During 1973, nearly 30 percent of the fami­lies
purchased one or more autos to be used for
the family. Surprisingly, this was only slightly
above 197 2. The big increase of families pur­chasing
autos occurred between 1971 and
1972, when the percent purchasing jumped
from 18 to 29 percent.
In the home-furnishing line, 16 percent pur­chased
bedroom furniture, 11 percent outdoor
patio furniture, 11 percent color TV sets,
8 percent dining room furniture, 5 percent
kitchen furniture, and 2 percent pianos or
organs. Clothes washers were the most fre­quently
purchased major appliance with 10
percent of the families purchasing them in
1973. Percent of families purchasing other
major appliances were: Cook stoves 9 percent,
refrigerators 9 percent, homefreezers 7 percent,
clothes dryers 6 percent, sewing machines
5 percent, dishwashers 4 percent. Purchases <>f
one or more small electrical kitchen appliances
were made by 37 percent of the farm families.
Twenty percent purchased electrical personal
care equipment. Photographic equipment pur­chases
were made by 9 percent of the respond­ents
and 7 percent reported buying stereo sets
or components.
Source for Additional Data
Survey results of the 1973 farm family
expenditure survey are published in a Statisti­cal
Reporting Service publication titled,
5
"Farm-Operator Family Living Expenditures
for 1973," Sp Sy 6 (9-75) . Copies may be
obtained from the Crop Reporting Board, Sta-tistical
Reporting Service, USDA, Washington,
D.C. 20250.
RECENT CHANGES IN AMERICAN FAMILIES
Marriage rates were lower and divorce rates
were higher in August 197 4 than in August
1973. Other recent changes in family lifestyles
include more delay in marriage, changes in
divorce patterns among social levels, and a
decrease in household size . This information is
contained in "Recent Changes in American
Families," the first in a new series of occasional
reports prepared by the Population Division,
Bureau of the Census. These reports, published
in Series P-23 of Current Population Reports,
will include broad speculative analysis and illus­trative
hypotheses as an aid in understanding
population statistics and in assessing their
potential impact on public policy. (U.S.
Department of Commerce, Bureau of the Cen­sus,
Population Division, Washington, D.C.
20233.)
CANNING AND FREEZING-WHAT IS THE PAYOFF? 1
by Evelyn H. Johnson, Extension Service
The science of nourishment is both intellec­tual
and practical. The practical aspect was
brought forcibly to our attention in recent
months as some 30 million Americans rushed
out to beat inflation with a garden hoe and a
jar lid. These gardeners have produced some
prize-winning blisters and aches. They have
reached a low level of despair with the elusive­ness
of canning lids, the fickleness of jelly that
didn't jell, pickles that didn't pickle, and toma­toes
that didn't pH properly. Many gardeners,
though, have found an unsuspected green
thumb. They exposed friends and family to
fresh-from-the-garden produce and take-home
presents. They have freezers and shelves well
stocked with containers of home-preserved
fruits and vegetables.
Home food preservation saves money. Or
does it? There are many hidden costs that must
be considered in home canning and freezing of
foods-costs of produce, equipment, heat and
energy consumption, and interest on large cash
1 This article is condensed from a paper given at the
National Agricultural Outlook Conference in Nov m­ber
1975. The complete paper may be ordered from
the Consumer and Food Economics Institute (se
page 2 of cover for address).
6
outlays such as a freezer. Furthermore, there is
a considerable time expenditure. If you have
marketable skills, your time might be more
profitably spent earning dollars instead of gar­dening
or preserving food.
Cost of Produce for Canning and Freezing
Produce used in home canning and freezing
may come from several sources-home gardens,
roadside markets, Pick-your-own fields, or gifts
from friends-and the price will vary accord­ingly.
In July 1975, in Ithaca, .Y., 1 bushel of
green peas cost $6 from a roadside stand, $3 in
a pick-your-own field, and $1.17 plus a share
of fixed costs from a home garden.1 Before
you rush out to plant a garden, however, con­sider
the potential costs: Tilling th soil, ferti­lizer,
garden tools, pesticides, and water.
Remember that even xperi<>nc d gard ners
suffer som crop failures as w ll as bountiful
harvests!
In 1973, Barbara Bridges, a stud nt at the
University of Maine, did a r s ar ·h proje ·t
entitled "llome Veg tabl Uard •nin!-(- F'rom
' Klippstcin, R. B., and Wnlla<"l' , E. Artua/ Cos/s of
/lome Food Pre.~erua/ioll. Dovision of utrotional
Sciencrs, Coop. Ext. SPrv., Corn<•ll Univ. 197!1
FAMILY ECON MIC.' REVIEW
Seed to Table." The results of this theoretical
study indicated expenses of $92.64 for harvest­ing
1,409 pounds of fresh vegetables from a
4,800-square-foot plot. The total value of the
vegetables was ·estimated (using local chain store
prices) at $521.11, a profit of approximately
$430. Add $189 for labor to the expense
column and the garden will still return about
$240. Multiplied by several years of gardening,
or by the local population of gardeners, the
result is impressive.
A 30- by 30-foot plot planted by Julian A.
Wesley, an Extension agent, Milwaukee
County, Wis., produced vegetables valued at
$179.53 for a cash outlay of $27.45 for seeds,
plot rental, fertisizer, and tools. Wesley esti­mated
that about 75 man-hours of labor at $2
per hour would wipe out most profits. He sug­gests
that vegetable growing be considered as
recreation.
In addition to the cash a family need not
spend at the supermarket, a gardener gains
through healthy outdoor exercise, opportuni­ties
for family activities, and across-the-fence
neighborliness. Perhaps, the decreased time
spent in shopping for fresh produce is an asset
for some families. Certainly all in the family
welcome the fresh-from-the-garden taste when
dinner is served.
Cost of Home Freezing and Storage of Food
Your garden is setting a production record.
Your favorite supermarket has a special on
locally grown green beans. Should you freeze
or not? Marcile Allen, Extension specialist in
nutrition at Purdue University, thinks, "Freez­ing
may be the answer-if you have freezer
space. It can be the key to varied family meals,
an easy and excellent way to preserve many of
today 's surpluses for tomorrow. But selecting a
freezer to fit your needs and filling that freezer
with high quality food takes time, energy,
money and know-how."
Th two main advantages of freezing are that
( 1) th proc dure is simple to do and (2) freez­ing
will k ep foods closer to fresh than any
oth r m thod of preservation. The main dis­advantage
are th costs of purchase and opera­tion
of th fr ezer.
tudi s re ently made by Extension nutri­tioni
ts in the Division of Nutritional Sciences
t orn 11 University indicated that food
at home costs almost 19 cents per
PRIN 1976
pound more than that purchased and con­sumed
as needed, even when using an energy­efficient
freezer to full capacity in an area
where electric rates are relatively low (see foot­note
2). High electric rates, poorly operating
freezers , or inefficient use of freezer space or
materials will add to the cost, in some cases as
much as 53 cents per pound of food.
There are fixed and variable costs associated
with owning and using a freezer. Fixed annual
overhead costs include the cost of the freezer
amortized over the number of years the freezer
is expected to be used, interest foregone on the
money used to purchase the freezer, an annual
repair allowance, and the cost of electricity to
maintain the freezer temperature at 0° F. Vari­able
costs include the cost of electricity to
freeze food and lower its temperature to 0° F,
and the cost of packaging, water, and fuel to
prepare foods for freezing. These costs vary
with the amount of food frozen.
To calculate the annual overhead cost of any
freezer, divide the total cost of the freezer,
including finance charges, taxes, delivery, and
installation, by the length of time3 you expect
to keep the appliance. Add 5 to 6 percent of
the cost of the freezer to account for interest
that could have been earned if the money had
been put to some other use, and 2 percent of
the purchase price as an allowance for repairs.
The electrical energy required to maintain
0° F in a home freezer varies, depending upon
the size and type of freezer. You may pay
heavily for the convenience of frostless
freezers. A 15-cubic-foot conventional freezer,
with an average wattage of 341, that uses
approximately 1,165 kilowatt-hours (kWh) per
year will cost $46.60 in electrical energy
(assumes a cost of 4 cents per kWh). By cot;n­parison,
a frostless freezer of the same size,
with an average wattage of 440, using 1,761
kWh per year, cost $70.44 to operate. The size
of the freezer makes a difference also. Assum­ing
a cost of 4 cents per kWh, a 6-cubic-foot
freezer may cost $26.28 per year to operate; a
3 The average service-life expectancy of a new freezer
has been estimated by USDA to be 20 years ; 9 years
for a used freezer. This is the number of years, on the
average, families actually keep freezers, not how long
they can be made to last. Many factors influence the
decision to replace or dispose of an appliance. See the
Summer 197 5 issue of Family Economics Reuiew for a
discussion of the service-life expectancy of appliances.
7
12-cubic-foot freezer, $43.80; and an 18-cubic­foot
freezer, $52.56.4
The table below shows annual overhead
costs for owning and operating a 15-cubic-foot
freezer which cost $300, plus $41 for sales tax
and delivery charge (see footnote 2 for source).
Item Cost
Amort ization
Donars
($341. divided by the 20-year
expected life) . ........ ..... . . 17.05
Interest foregone
($341 . at 6 percent) ....... ... . 20.46
Annual repair allowance
(at 2 percent of $300.) ....... . 6.00
Electricity to maintain 0° F ... . 36.75 to 204.12
Total overhead .. ..... ... . ..... I 80. 26 to 24 7. 63
In addition to the overhead costs that are
incurred simply by owning a freezer that is
plugged in, there are additional costs associated
with the amount of use the freezer gets. It
takes about 0.1 kWh to freeze a pound of food
and lower its temperature to 0° F. The annual
cost of electricity for freezing food will depend
on the freezer, the total number of pounds
frozen, and the local cost of electricity.
The cost of packaging including reusable
containers is about 2 to 6 cents per pound.
Aluminum foil costs more; rigid containers,
amortized over several years, may cost less. The
cost of packaging to freeze 1 pound of food is:
Packaging material
Heat-sealable pouch ... . .
Bag with twist tie ..... .
Plastic carton . ...... .. .
Glass jar ............. ..
Plastic freezer wrap ... .
Coated freezer paper ... .
Heavy duty aluminum foil
Size
6~ in X 8 in
I pt
1 pt
1 pt
l 11 sq ft
1~ sq ft
11, sq ft
Price
(cents)
6 .4-6.7
l. 2-2.0 I
19.0-38.0 2
21 .0-22.0 2
1.2-10.5
I. 8-4.5
5.2
1 This cost does not include the cost of cover boxes
which shape the filled bags into uniform sizes for
compact storage and prevent tears in the bags. The
cost of the pint-sized cover box is about 2 to 4
cents and can be used many times.
2 Reusable.
4 Adapted from Van Zante, H. J . Household Equip­ment
Principles. Englewood Cliffs, N.J .: Prentice-Hall.
Examples given for kWh per year are illustrative only
and do not represent an average for all models or the
energy usage of any particular models . In addition to
differences due to the self-defrost feature and size,
energy costs will vary with the amount and type of
insulation, whether the freezer is an upright or chest
type, and other design features.
8
The cost of water and fuel used in washing,
blanching, and chilling foods is estimated at
0.004 cent or slightly less than a half cent per
pound of food.
Table 1 estimates the range of fixed and vari­able
costs of freezer operation in a 15-cubic­foot
freezer. Table 2 estimates the cost of
operating a 12-cubic-foot freezer filled to
capacity 1 time during a year, 11h times, and
21/2 times. The amortization was figured over
20 years in table 1 and 15 years in table 2; the
interest rate was 6 percent in table 1 and 3 per­cent
in table 2, and packaging was 5 cents per
pound in table 1 and 3 cents in table 2. Note
the increase in costs for electricity and pack­aging
as more food is frozen, but the reduced
total cost per pound.
To save money by home freezing foods, a
family would need to select a freezer to fit
family needs, use it properly, freeze only those
foods the family likes to eat and in amounts
they can enjoy, and find economical sources of
those foods. Just storing food in a freezer may
raise the price by 20 cents per pound over a
year's time. Opening the doors or keeping the
freezer in a warm place will increase the electri­cal
costs. Excessive or wasteful use of pack­aging
materials is costly also (see footnote 2).
Costs of Home Canning
Canning is probably the most economical
and practical method of preserving food in the
home. The canning operation ,varies tremen­dously
from household to household- as to
what foods are canned, how they are pro­cessed,
the kinds of containers and equipment,
and the amount canned at a given time. Some
families combine their canning activities and
share the results. Most home canners grow their
food; others purchase it at farm markets or har­vest
fields. These factors, as well as th costs of
labor, energy, water, and ingredients added
during the canning process, determine the total
cost of home canning. Inconsistency of th se
factors from household to household and com­munity
to community makes it impossibl to
derive a cost (per pound of home-cann d food)
that applies to all household situations. lnfor
mation can be provided to help the hom can­ner
figure fairly accurately the costs of canning
various foods in a given household situation.
The cost of produc may be th major
expense in canning if the produ is purchas d
FAMILY E ONOMIC REVIEW
Table 1. Annual cost of freezing and storing food
in a 15-cubic-foot freezer
Pounds of food stored
Expense
525 1,312
Dollars Dollars
Overhead (fixed costs) ....
Cost to store prepackaged,
frozen food (overhead
divided by the number
80.26 to 247.63 80.26 to 247.63
of pounds stored) ....... . .15 to .47 .06 to .18
Packaging (at 0.05 per
pound ..... .... . ..... ... .
Electricity to freeze
food (at 0.1 kWh per
pound, ranging from
26.25 65.60
0.03 to 0.09 per kWh) .... 1.58 to 4.73 3.94 to 11.81
Total annual cost ..... . 108.09 to 278.61 149.80 to 325.04
Total cost per pound
to package, freeze,
and store food ....... . .20 to .53 .11 to .25
Source: Klippstein, R. B., and Wallace, E. Actual Costs of Home Food
Preservation . Division of Nutritional Sciences, Coop. Ext. Serv.,
Cornell Univ. 1975.
at local food markets. Growing your own pro­duce
or buying it directly from the farm and
orchard, may give you good quality produce at
less cost during the height of the season. Con­sider,
also, the cost of added ingredients-sugar,
vinegar, spi es, p ctin, and salt. (Figure the
cost of sugar by allowing 21JI cups per pound.)
The most expensive piece of equipment for
home canning is a pressure canner, ranging in
pri e from $40 to $75 for models commonly
used. mall r models priced from $20 to $35
may b mor practical for the small family or
ine perienc d anner who doesn't plan to can
large quantities of food. The initial cost of the
pre ur canner can be amortized over an
anticipat d 15- to 20-year life expectancy. Add
2 p rc nt of the purchase price to cover the
ost of r pairs p r yea~asket and pressure
ntrol saf ty valve. (There should not be a
n d for r pair for several years after the pur-
PRING 1976
chase of a new canner.) A large water bath can­ner
is needed for processing fruits, tomatoes,
pickles, and preserves. One can be purchased
for $6. A jar lifter for about $2 to $3, a funnel,
and a canning book are all that is needed to
turn the home kitchen into a small cannery.
New canning jar units range in price from
about $2.29 to $3.49. The price of glass jars
can be amortized over a 1 0-year average life
span. Canning lids vary widely in price, from
1.5 to 5 cents per lid. Rings are about 1 cent,
amortized over 10 years.
The cost of electrical energy required for
processing can be determined if the electrical
input of each range surface unit being used,
time at each heat setting, and local fuel costs
are known. The amount of gas used can be
determined only if a monitoring meter is used.
Water for washing produce and steam for
blanching can be estimated at a cost of 0.4
9
Table 2. Cost of operating a 12- cubic-foot f reezer
Item
Net depreciation, based on
15-yr usage, cost of $250
when new ...................... .
Return on investment
foregone at 3% ....... . ........ .
Repairs (2% of purchase price) .. .
Electricity for freezing food
at 4¢ per kWh ................. .
Electricity for maintaining
0° F 1,100 kWh at 4¢ per kWh ...
Packaging, average 3¢ per pound
Total cost per year
Cost per pound
Fi l led to cap acity-~
1 time
(360 lb)
16 . 39
11.26
5.00
1.44
44.00
10.80
88.89
0.24
1 ~ times
(540 l b)
Dollars
16.39
11.26
5.00
2.16
44.00
16 . 20
95.01
0 .17
2~ t imes
(900 l b)
16.39
11.26
6 . 00
3 . 60
44 . 00
27.00
107.25
0.12
Source: Barton, J. A., Extension Specialist Foods and Nutrition, VPI and
Virginia State Univ., 1975.
cents or about one-half cent per pound of food
canned.
The table below gives an estimated cost for
canning 280 quarts of food. Note that neither
the cost of food nor the cost of labor is
included.
Item Cost
Dollar's
Pressure canner (amortncd over 20 yr) 3.25
Rcpa1 rs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . 75
Water-bath canner (amortized) . • . . . . .• . . . .. .60
Small equlpmt·nt . ...•...•... .. .. .. .... ..... .SO
Jars and I ids (amort ned over 10 yr) . . . . . . 12.00 to 16.00
ll'ater and steam . . . . . . . . • . . . . . . . . . . . • . . . . . . 5.00
Elect r1 city for process tng at 1. St p~r kWh:
140-qt pressure canner . . . • . • • . . . . . . . . . . . 1.30
140-qt water-hath canner . . .•. . . . . . . . . . . .. 2.00
rota I ................................... 25.40 to 29.40
Per quart .. . • . . .. . .. . .. .. .. . . . . .. .. . • . . .09
Recent studies at Com 11 University (see
footnote 2) indicated that th cost for canning
a quart of tomatoes at home rang d from 4.3
cents, if jars were on hand and the tomatoes
10
were free of cost, to almost 51 cents if both
jars and tomatoes were bought. They estimated
the range in cost for home canning green beans
as 4 cents a quart to 63 cents a quart, and the
cost for a quart of peaches in syrup from 20.5
cents to 90.5 cents. Their cost analysis for can­ning
the three foods is shown in table 3. Note
that the total cost per quart do s not includ
cost of time spent and equipment used. Cost of
equipment would add one-fourth to one-half
cent per quart to the total cost as given. Total
cost per quart could b reduced through great­er
yield per bushel by careful shopping or
home gardening.
Th odor Wishnetsky and J rry Cash,
Cooperativ Extension ervi , Michigan Stat
Univ rsity, state that the main r asons for the
Ia k of previously publish d information on
home food pr s rvation osts is th inh r nt
uncertainty involv d in d ciding th bas s for
calculating many of th cost fa tors. They
FAMILY E NOMICS REVIEW
en
"'C
~ z
....
1£)
-:I
a>
.... .....
Table 3. Cost analysis of home canning-June 1975
(Cost per quart)
Cost of jar units or lids Cost of produce 1 Cost of Cost of Total cost per quart
Jars additional processing (using I Lids Gift I Buy ingredients (electricity) electricity)
Peaches (1 bushel at $9.25 yielded 20 quarts)
On hand: 0.0¢ 4.6¢ 0.0¢ 46.3¢ Sugar: 15¢ 0.9¢ 20.5¢ to 66.~¢
(at 55¢/doz)
Purchased: 28.3¢ 0.0¢ 0 . 0¢ 46.3¢ Sugar: 15¢ 0.9¢ 44.2¢ to 90.5¢
(at $3.39/doz
includes lids) I' I
Tomatoes (1 bushel at $4.25 yielded 17 quarts)
On hand: 0.0¢ 3.3¢ I 0.0¢ 25.0¢ -- 1. 0¢ 4.3¢.to 29.3¢
(at 39¢/doz)
I -
Purchased: 24.9¢ ' I 0.0¢ 0.0¢ 25.0 -- 1. 0¢ 25 .9¢ to 50.9¢
(at $2.99/doz i I
includes lids) i I
'
Green beans (1 bushel at $6.00 yielded 16 quarts)
I
On hand: 0.0¢ i 3.3¢ 0.0¢ 37.5¢ -- 0.6¢ 3.9¢ to 41.4¢
' (at 39¢/doz)
I
Purchased: 24.9¢ I 0.0¢ 0.0¢ 37.5¢ - -
I 0.6¢ 25.5¢ to 63.0¢
(at $2 . 99/doz i
I I
includes lids) r
I
----
1 Cost in Ithaca, N.Y., 1974 growing season.
Source: Klippstein, R. B., and Wallace, E. Actual Costs of Home Food Preservation . Division of
Nutritional Sciences, Coop. Ext. Serv., Cornell Univ. 1975 .
agree that capital costs (tools for gardening and
equipment for canning) will not apply to some
home gardeners and canners, will apply in part
to others, and will apply in full to still others.
They have computed cost totals, therefore, for
each of two products, green beans and toma­toes.
The total cost per quart for canning green
beans, in the summer of 197 5 was $1.21 when
total capital costs were assigned to the first
year's canning operation, $0.42 when the capi­tal
costs were amortized over 20 years, and
$0.37 if there were no capital costs. The corre­sponding
costs for canning tomatoes were
$0.74, $0.22, and $0.19.
Wishnetsky and Cash believe that the true
cost lies somewhere between the upper and
lower values. They base their data on the arbi­trary
assumption that a typical family puts up
180 quarts of food per season . They point out
that not all harvested produce will be usable.
Food lost through spoilage or given away can­not
be ignored as an additional cost factor that
raises the net cost per bushel for the home gar­dener.
They suggest there should be no prob­lem
in making corrections to compensate for
local prices or for variations in yield , where
they are known to exist. Corrections for vari­ations
in total jars canned per season can also
be made without difficulty. They conclude:
"Superior quality (compared to commercial­ly-
canned) that is attainable for some home
gardeners and home canners is an intangible
that the researchers made no attempt to
quantify. Likewise, the cost of labor was
ignored. If it were to be included at the typi­cal
manual labor rate, there would be little
likelihood for any cost saving for any home­gardening/
home-canning operation. It might
be of interest, however, after computing the
home-gardening/home-canning cost for a
given commodity (under given, local con­ditions)
, to compare that cost with the aver­age
pric of comparable, commercially-can­ned
material over the next 12 months, to
calculate the cost saving (if any) and th n
divide that figure by th numb r of h urs of
labor expended. The figure thus arrived at
will represent the $/hour 'earned' by thai
individual for his labor. Th n th question
can b posed, 'Was it worth it?"'5
• Wishn tsky, T., and Cash, ,J. Cost of llome Garden·
ing and CanninJ; Green Beans and Tomatoes . Michi)!an
Stat Univ. 1975.
12
In comparing the cost of home-canned foods
with commercially canned ones, some differ­ences
were found by the Cornell researchers
(table 4). The greatest savings from time spent
was in canning tomatoes. This documents an
earlier assumption that home canning provides
substantial savings if produce is homegrown
and jars and equipment are available from
previous years. It points out that there are only
small savings if jars and produce have to be
purchased. The savings are further reduced if
commercially canned foods can be bought in
case lots at special discounted prices.
The home canners may wish to consider
several other factors:
• Adequate space for storage. Food may
freeze and jars burst, resulting in loss of
both jar and food. Overheated storage
space lowers the quality of the food. Jars
may be accidently broken if stored in the
living areas of the house.
• Creativity in canning and canning without
exact instructions may result in food
waste and family illness due to food
spoilage.
• Home-canned foods should be boiled 10
minutes or more, unless the canner is
absolutely sure of the method.
• Some foods (for example, fresh carrots)
are available year round at reasonable
cost.
• Home-canned tomatoes or juice is far
more expensive as a source of vitamin C
than commercially canned or frozen
orange juice. When canning supplies and
freezer space are limited, canners should
consid r carefully the nutritional value of
foods available for preserving.
• It is economical to can and fr z only
the amount that can b u ed in a r ason­abl
length of tim .
Canning is probably th most c nomical
and practical m thod of preserving food in the
home. Hom canning can provid a great f el­ing
of p rsonal ac ompli hm nt; it can bring
family m mb rs together in reativ activity; it
provides s curity in having fo d within arm's
r ach ; it offers a . upply of foo pr par d
ace rding to family pr fer n s and sp cial di -
tary n ds.
The most e nomi al pr s rvati n m thod
dep nds on that family' atin~ habits. You
can't sav<' mon y by canning gr n b •ans wh •n
FAMILY E N Ml' REVIEW
your family only likes frozen ones. You can't and freezing food unless someone takes
save money by growing a garden and canning responsibility for getting the work done.
Table 4. Comparison of costs of home and comme~cial ly canned foods
(Quart of canned p~oduct)
Source of Source of Cost
jars
produce
Home canned 1 I Store bought 2
Peaches
On hand Gift 20.5¢
Do Bought 66.8¢
Purchased Gift 44.2¢
94¢ to $1.10
Do Bought 90.5¢
Tomatoes
On hand Gift 4.3¢
Do Bought 29.3¢ 64¢ to 90¢
Purchased Gift 25.9¢
Do Bought 50.9¢
Green Beans
On hand Gift 3.9¢
Do Bought 41.4¢ 62¢ to 78¢
Purchased Gift 25.5¢
Do Bought 63.0¢
1 Using electricity.
2 April 1975, Ithaca, N.Y.
Source: Klippstein, R. B., and Wallace, E. Actual Costs o Home Food
Preservation. Division of Nutritional Sciences, Coop. Ext. Serv.,
Cornell Univ. 1975.
AMENDMENTS TO REAL ESTATE SETTLEMENT PROCEDURES ACT
the
The Real Estat Settlement Procedures Act
of 1974, whi h b arne effective June 20,
1975, has b n amended as of January 2, 1976.
Th r quir ment for disclosure of settlement
osts 12 day b fore closing has b en r pealed.
Inst ad, a n w section was add d to the act,
r quiring that th tl m nt statement be
mad available to th borrower one business
day before settlement. The original legislation
also was amended to repeal the requirement
that the statement of settlement costs (Uni­form
Settlement Statement) contain Truth in
Lending information, and the requirement that
the previous selling price of existing real prop­erty
be disclosed. Implementation of these new
regulations will take place June 30, 1976.
PRIN 1976
13
HOW HOUSEHOLDS USE ENERGY 1
by Dorothy K. Newman and Dawn Day 2
Being patriotic today now includes saving
energy. Energy shortages and pollution from
excessive energy use are the subject of heigh­tened
notice in the media and by all levels of
Government. This article explores just how
households use energy, and the limits and
potentials for energy conservation.
The information on how American house­holds
use energy is based in part on two nation­al
sample surveys: (1) A survey of households,
and (2) a survey of the electric and natural gas
utilities that serve them. The first survey fotmd
out about the energy-using characteristics of
the households themselves and of their dwell­ings
in the spring of 1973. In the second, util­ities
(after authorization from the households)
provided the actual amount and cost of the
electricity and natural gas their customers used
in a 12-month period of 1972-73.
The two sets of information-from house­holds
and their utilities directly-made it pos­sible
to match the exact amount and cost of
electricity and natural gas used with each
household's characteristics and the character­istics
of their home. Answers from the house­holds
also gave the basis for getting informa­tion
about car and gasoline use.
The work was done in the Washington Cen­ter
for Metropolitan Studies with funds from
the Ford Foundation.3
The Household as Energy Consumer
The main findings are repeated in virtually
every area into which the investigation reached.
They showed, without doubt, that the more
money you have, the more energy you use aL
'This article is condPnsed from a pap r given at the
National Agricultural Outlook Conference in Novem·
ber 1975. The complete paper may be ordered from
the Consumer and Food Economics Institut ( e
page 2 of cover for address).
2 Respectively, Director, Project on Race and Social
Policy, Washington, D.C., and Assistant Prof ssor,
Brooklyn Coli ge of th City University of New York,
and Research Associate, Project on Race and Social
Policy.
Views expressed are those of th authors.
J Additional results from this study arc availabl(> in
The American Energy Consumer, by D. K. Newman
and D. Day. Massachusetts: BallinJ;!er, 197fi.
14
home and in your automobile.4 This is regard­less
of any other condition-climate; how and
how far you commute to work; the size of
your house; your age; number in the house­hold;
and whether your house is protected
from the weather by insulation. Paradoxically,
the better off you are, the more likely you are
to have equipment that saves energy and a
house and equipment that use a lot of energy.
Another key finding is that almost all house­holds
have a limited choice, especially about
the most energy-related features of their
house--the design, the furnace, and the water
heater. The structure and built-in equipment
are there when most households buy or rent a
dwelling. If you judge energy use on the basis
of the number of major appliances in a home,
as many do, you would be right, but only
because the presence or absence of major appli­ances
is a key indicator of total energy con­sumption
and is linked chiefly with income.
Appliances, which are usually bought sepa­rately
and are not built in, do not use much
energy by themselves. Therefore, what one
chooses and buys separately is less important
to the energy consumed at home than the basic
features of the structure, about which a house­hold
has had little to say.
Limited choice is reflected also in the degre
to which households use automobiles. Whether
poor or rich, few workers felt they had a
choice in how they ommuted to their jobs.
Either they used a car or had a time- on uming
• Four incom groups are used in this analysis: Poor,
lower middle, upper middle, and w II off. Families and
individuals were defined as poor if their incomes fell
below c rtain levels. Th l!'v Is vari d with size of th
family and w re based on lhe .S. GovPrnment's defi ·
nition of poor and n ar po r for 1972. In our study,
the averag incom of poor hou eholds was $2,500.
The lower middle income group includes all the non ·
poor whose income was und r $12,000 in 197 2. The
av rage income of lower middle income hous<'holds
was about $8,000. The upper midcll income group
includes thos with incom s b twl.'cn 12,000 and
$15,999 in l 972i their average income was $1<1,000.
Th well off arc thos with incomes of ovPr $16,000i
their av r. ge mcomc wa $2•1,500. Th poor, upper
middle income, and w II off in oml' groups each com·
pris about a fifth of all householcls, and th loWl'r
middl ' in om group comprises about two fifth .
FAMILY EC NOI\11 S REVIEW
struggle with poorly routed public transporta­tion.
Therefore, almost all the chief breadwin­ners
in American families use a car to get to
work.
Lack of choice reaches far and deep. Exclu­sionary
hqusing patterns affecting lower
income and black households leave them even
lPss choice than others in the dwellings they
live in, and therefore, in the energy-using
features of their homes. Automobiles use more
energy and are more expensive. The 1973-74
price increases, during the energy crisis, were
greatest for compacts that cost and weighed
the least. Those who produce homes and the
facilities in them that determine how much
energy people use have been making their pro­ducts
more energy consuming and costly . For
instance, a frostless refrigerator uses two-thirds
more energy than a regular refrigerator and
today's regular kind uses over twice as much
energy as the models sold in 1950.
The costs are increasingly burdensome on
those at the lower end of the income range
because they have fewest options. They are
least able to afford the sharply rising prices for
every energy source. In addition, both electric­ity
and natural gas prices are ordinarily higher
the less you use. Poor and low-income house­holds,
who use the least amount, pay more per
unit (that is, per million Btu's) than the well
off.
The inevitable conclusion is that households
may be able to play only a modest role in
energy conservation by themselves. Possible
exceptions arc the well off who have most
option . Eve'n they are locked into a given
housing stock and certain transportation altern­atives.
Conservation then, is everybody's
business if the public is to save energy. To a
large extent the buck passes to commerce and
industry; to State and local governments that
can modify land u e, zoning, and building­-
permit re~ulations; to various arms of the
F d ral Government that administer or enforce
housing laws and utility and environmental
regulations, and, finally to the Congress. The
ongre s could enact legislation that would
remove orne large remaining roadblocks that
hind r fre hoic and energy-saving alterna­tiv
in housing and transportation. If house­hold
had mor choic , .they would sav
nergy. We found that peopl at all income
lev ls w re aware of how to save.
PRlN 1976
The dwelling. The basic level of household
energy use for heating, which accounts for
most of every family's energy consumption, is
determined by climate and the structure of the
dwelling itself. Once location is decided, cli­mate
is outside the household's control. The
dwelling structure is usually outside the
family's control as well. Most people live in
homes built long before they moved in. Even
families buying a new house have little to say
about the design. Their new home is likely to
be one of a dozen or more mass-produced for
sale by a developer who uses a set of master
blueprints rather than a home the family built
for themselves.
An important principle of energy conserva­tion
is that the more a dwelling is protected
from the weather, the less energy it needs for
heating. Thus-all other factors being equal-an
apartment uses less energy than a rowhouse (or
townhouse) of the same size, a rowhouse uses
less than a semidetached house, and a semi­detached
house uses less than a free-standing
single-family home.
The type of heating system makes a differ­ence.
An electrically heated home requires
about twice as much fuel per unit of heat as a
similar gas- or oil-heated home. The presence of
at least one thermostat or radiator valve is
important to' permit the family to control
room temperature.
Any openings in a building, such as doors or
windows, are places for heat to escape in the
winter or to enter in the summer. The type of
window also makes a difference. The most
common type of window-double hung-is the
most energy conserving. Casement and sliding
windows are less energy conserving since they
have more crevices and leaking areas for hot or
cold air to move in or out. Wood frames pro­vide
better protection than metal; double­glazed
(thermopane) glass gives more protec­tion
than conventional (single-glazed) glass.
The larger the window, the more heat is likely
to be lost. Storm windows, storm doors, and
weatherstripping can reduce heat loss.
Most of these structural characteristics that
affect energy use are determined at the time of
construction and may be impossible, or at least
difficult and expensive, to change. This is true
of square feet of floor space, size, shape, num­ber
of windows and doors, degree of insulation,
and type of roof and foundation.
15
In the face of these facts, analyses of data
from the U.S. Bureau of the Census show a
distinct trend toward more energy-using char­acteristics
in the design of American dwellings.
For instance, the single-family home-the most
energy-using type of structure-has become
more common, rising from housing two-thirds
of all American households in 1940 to three­fourths
by 197 3.
The new one-family houses being built and
added to the housing supply each year have an
increasing number and proportion of energy­using
features. More homes are being built with
electric heating, central air-conditioning, and
slab foundation. The trends are sharp.
Even though new housing is a small percent­age
of the total housing stock, it is an impor­tant
part because it will remain and influence
household energy use for years.
Home improvements are possible, but the
most energy saving-such as installation of
storm windows and insulation--are expensive.
The initial cost is beyond the ability of poor
and many lower middle-income households to
pay out directly, and credit costs are high. For
many households, installation depends on the
landlord. The poor and lower middle-income
households have more windows that are with­out
storm sash in their homes. These house­holds
are also the most likely to be without
insulation. Further, if you heat with natural
gas, as most people do, a storm window will
pay for itself in as few as 10 years only in very
cold climates (table 1).
Although families may not be able to afford
storm windows or to save money by installing
them, the energy savings possible are high and
could be very important to the country. A
home with the average number of windows
(12) would conserve over 20 million Btu's of
natural gas in a year. This is the equivalent of
13 percent of the natural gas used by the aver­age
family that uses natural gas for heating.
Lifestyle4'he family's use of the home.
While the structure of the dwelling determines
a basic level of energy us , the family's style of
living can make some difference. For example,
a family can influenc its own energy use by
turning down the thermostat in winter or turn­ing
off the natural gas pilot light in summer.
Th surv y findings show that hous holds
g nerally tended to keep their winter home
temperatur between 70 and 72 d gr s during
16
the day and below 70 at night. These tempera­tures
were reported in the spring of 197 3, even
before the Government urged us to "dial
down."
Turning off the pilot light of a natural-gas
furnace during the summer is a good way to
save energy. In the summer before the energy
crisis of 1973-74, about 13 million households
saved energy by having their pilot lights turned
off in the summer. Another 25 million left
their furnace pilot lights on. If these 25 million
households had turned off their furnace pilot
lights, the country would have saved 58 trillion
Btu's of energy, about 1 percent of the total
natural gas households consumed in 1972-73.
The dollar savings per household would have
been about $2.70 and is about $5.00 today.
These low savings are little incentive, espe­cially
when you have to call the gas company
to turn the pilot light off in the spring and light
it in the fall. If the gas company charges the
household directly for this, and many do, the
charge could wipe out the dollar savings.
Cooking and refrigerating appliances account
for about 6 percent of all personal energy con­sumption.
Other appliances and lighting use an
additional 9 percent-15 percent in all.
How much energy an appliance uses in a
given year depends on how much energy it
takes to run the appliance per second or per
hour and how much the appliance is used. For
example, the average wattage (energy per
second) of a microwave oven is 1,450. This is
over four times the wattage of a 12-cubic-foot,
frost-free refrigerator. Yet, over a year, the
oven uses less than a fifth as much energy as
the refrigerator because the refrigerator is
plugged in all the time while the microwave
oven is very seldom in actual use.
Most electrical and gas appliances on the
market have increased in energy us per appli­ance
since the fifties. For instance, in 1950 a
prosperous homeowner could buy something
called a home freezer cabin t (using 620 kWh
per year). By 1959 the fre z r was on th mar­ket
(using 860 kWh per y ar). By 1969 the
thing to buy, if budget permitted, was a frost­free
freezer (using 1,761 kWh). Th increas in
size and convenience is und niabl . o is th
increase in energy us (180 perc nt). Incr ases
occurred els where too. Th room cool r (935
kWh) became the window air-condition r
(1,389 kWh). Th wring r wash r ( 45 kWh)
FAMILY E NOMlCS REVIEW
TabZ.e 1. Annual. cost vs. savings for instaZ.Z.ing one storm window~
two seZ.ected cities~ December 19731
Atlanta Boston
Years
Natural gas Natural gas
Storm
cost savings
Storm
cost savings
window Heating & window Heating &
cost air-condi- Heating cost air-condi- Heating
tioning only tioning only
DoZ.Z.ars
1 23.95 1. 92 1.58 30.63 5.24 5,12
2 25.27 3.95 3.25 32.31 10.77 10.52
3 26.66 6.09 5.01 34.09 16.60 16.22
4 28.13 8.34 6.87 35.96 22.75 22.23
5 29.68 10.72 8.83 37.94 29.24 28.57
6 31.31 13.23 10.90 40.03 36.09 35.26
7 33.03 15.88 13.08 42.23 2 43.31 2 42.32
8 34.85 18.68 15.38 44.55 50,93 49.77
9 36.77 21.62 17.81 47.00 58.97 57.63
10 38.79 24.73 20.37 49.59 67.45 65.92
11 40.92 28.01 23.07 52.32 76.40 74.67
12 43.17 31.47 25.92 55.20 85.84 83.90
13 45.54 35.12 28.93 58.24 95.80 93.63
14 48.04 38.97 32.10 61.44 106.31 103.90
15 50.68 43.03 35.45 64.82 117.40 114.73
16 53.47 47.32 38.98 68.39 129.10 126.16
17 56.41 51.84 42.70 72.15 141.44 138.22
18 59.51 56.61 46.63 76.12 154.46 150.94
19 62.78 61.64 50.77 80.31 168.20 164.36
20 3 66.23 2 66.95 55.14 84.73 182.69 178.52
1 December 1973 prices were used for storm windows and natural gas.
2 The year when the storm window pays for itself.
3 Not computed after 20 years.
Source: Newman, D. K., and Day, D. American Energy Consumer. Massachu­setts:
Ballinger, 1975, (table 3-12, p. 46).
Derived using the following method: Each storm window is assumed to be 15
square feet, the usual size of a double-hung window. Storm-window prices
are for medium-priced aluminum sash sold at retail and installed in each
of the cities by Sears, Roebuck and Company. Natural gas prices are as of
December 1973, from the U.S. Bureau of Labor Statistics. Storm window
costs and energy cost savings are computed assuming a 5.5 percent interest
rate, compounded annually.
SPRING 1976
17
became the automatic clothes washer (103
kWh).
Not every household has all types of appli­ances.
Refrigerators, stoves, and television sets
are most common-almost all households have
them. Three-fourths of all households have
clothes washers too, either wringer or auto­matic.
About half of all households have
clothes dryers. A third have food freezers. Sub­stantial
differences exist between households in
appliance ownership, by income class.
Consumers may exercise considerable discre­tion
in buying appliances and water heaters
since the equipment is often not part of the
structure. Even here choice is limited. First, a
family may not be able to afford the item. For
instance, a family trying to make ends meet
would have little incentive to replace an elec­tric
water heater with a more energy-conserving
gas water heater.
A customer is limited by what is available in
the stores. For example, virtually all refriger­ators
now sold at retail are the more energy­intensive
frost-free variety. Bearing this out, all
refrigerators priced for the Consumer Price
Index of the Bureau of Labor Statistics are
frost free.
The Energy Gap
Now that Americans have learned that fossil
fuel energy, like all natural resources, is finite,
they must consider distribution and pricing
policies to give all Americans a fair share of
energy. Present maldistribution must be recog­nized,
as well as the possibility of present and
future shortages.
The poor use less energy; they pay higher
prices for the energy they must have; and they,
more than any other group of Americans, suf­fer
from xposure to the noxious byproducts
of energy consumption and production.
Energy us d by the poor is almost ntir ly
for ess ntials-space and water heating, cook­ing,
food refrigeration, and lighting.
When fuel supplies are limited and increas­ingly
expensive, the wealthy can buy as much
as they want if pric is th only obstacle. The
poor, on the other hand, ar in vitably d -
prived by rising costs. Th y are forced to fore­go
some measure of pleasant or necessary lif
support 'f not in heat and light, or in gasoline
for n cessary transportation, then in th loss of
amenities.
18
In 1972-73 poor households used an average
of 207 million Btu's of natural gas, electricity,
and gasoline. The well off used more than
twice as much. The middle-income groups fell
between. The same stairstep pattern occurs for
each fuel separately. The incline of the steps
differs, however.
As income rises, the increase in natural gas
consumption is gradual; the increase in electric­ity
is intermediate; and the increase in gasoline
is sharp. The well off use almost one and one­half
as much natural gas as the poor, over two
and one-fourth as much electricity, and over
five times as much gasoline. The well-off use
more of each than the middle-income groups,
but the differences are not as great.
Natural gas is used primarily for heating and
cooking. It seems reasonable that, for these
necessities, the less advantaged cannot reduce
consumption much below that of the well off.
Conversely, there would seem to be little rea­son
for the well off to increase their consump­tion
greatly.
Electricity is used mainly in appliances and
lighting, and this is part luxury and part neces­sity.
Here, as with natural gas, there seems to
be a point when the well off prefer to spend
their money for things other than electricity­using
devices.
Gasoline is truly the fuel of both necessity
and pleasure. Gasoline may be necessary for
shopping and commuting to work, but many
gallons of gasoline are onsumed for family
vacations, weekend ex ursions, second cars,
extra large cars, and so on. It is for these rea­sons
that the well off use more than five times
as much gasoline as the poor and more than
twice as much as the lower middle-income
group.
The poor and the lower middle-income
households use less fuel for th ess ntial of
heating, lighting, and cooking be aus they are
fore d to b thrifty and because th ir hom s
are modest. They are mor likely to live in
apartments or homes with only a f w rooms
and a f w windows (tab! 2).
Virtually all poor hous holds have a r frig r­ator,
a stov , and a television. The refrig rator
and stove are unqu stionably n c ssiti s. By
today's American standards, t I vision provid s
an e onomi al form of nt rtainment. With
any parti ular applian , the poor ar I ss like­ly
to hav th more .n rgy-int nsiv model.
FAMILY E ONOMI REVIEW
Table 2. Climate and housing characteristics> by income> 1973
(Percent of households)
Climate and structural
characteristics
All households .................. .
Climate under ·3,500 heating
degree days ..... . .............. .
Apartment ...................... . .
Less than 5 rooms ............ . .. .
Living room less than 200 sq ft ..
Less than 15 windows ......•..•...
No picture window ............... .
Some storm windows .............. .
Protected doors 1 2 •....•.•...•••.
Basement in single-family homes ..
Insulation in single-family
homes 2 ••••••.•••••••• ••• ••••••••
Poor
100
41
32
47
62
82
70
31
41
31
41
Lower
middle
100
33
26
35
55
73
56
49
53
45
78
Upper
middle
100
29
13
18
36
67
38
54
58
52
86
Well-off
100
25
8
8
29
45
29
63
70
61
94
1 Includes entrances with storm doors and doors opening on to apartment
hallways and other heated areas.
2 Excludes unknowns.
Source:
setts:
Newman, D. K., and Day, D. American Energy Consumer. Massachu-
Ballinger, 1975, (table 5-5, p. 94).
For example, the poor are less likely than other
households to have a color TV or frost-free
refrigerator. Aside from the refrigerator, stove,
and TV, poor households are much less likely
than others to have and enjoy the convenience
of major appliances.
The energy gap is greatest in gasoline use.
Almost 50 perc nt of all poor households and
ov r 15 percent of all lower middle-income
hous holds have no car. The well off have more
than on ar.
Poor and lower middle-income households
with cars us less gasoline because they go few-r
places and b cause their cars get better gaso­lin
mil ag . They get better mileage because
these groups own the older cars that tend to
w igh l s than new r models and are without
PRING 1976
such gasoline-consuming extras as air-con­ditioning
and power steering.
These facts are helpful in shaping energy
policy. They establish by whom and wpere
household energy conservation is practiced. A
family's ability to cut back energy use is limit­ed
by the size of the home and its location, and
basic appliance and transportation needs. Only
over the long haul can these be exchanged for
more energy-efficient living conditions.
In the meantime, when the focus is on ultra­high
energy use today and on energy conserva­tion,
the spotlight needs to be on the well off.
Well-off households use the most energy and
have the present resources to make energy-con­serving
improvements.
19
THE IMPACT OF INFLATION ON FAMILIES 1
by ancy S. Barrett and Anita Oriscoll 2
Congressional Budget Office
Inflation is a very general term that refers to
an increase in some weigh ted average of the
prices of goods and services produced or con­sumed
in an economy. To arrive at a measure
of inflation that has economywide significance,
individual price changes must be weighted
according to the importance of the commodi­ties
and services in the economy: Food price
changes, for instance, have a larger weight than
price changes for pianos.
There are various measures of inflation the
most commonly cited ones being the Cons~mer
Price Index, the Wholesale Price Index, and the
Gross National Product (GNP) deflator. Each
of these price indexes encompasses a different
mix of goods and services and applies different
weights to price changes. It is impossible, how­ever,
to gage the actual increase in living costs
for any particular family on the basis of any
r~~dily available price index, since the compo­Sition
of purchases for any particular family
will not be identical to the weights assumed in
constructing statistical price indices. The con­sumption
pattern used to construct the Con­~
umer Price Index (revised in 1964), for
mstance, is based on a 1960-61 expenditure
survey of urban wage earners and clerical
workers. Its applicability to broader segments
of the population (or later time periods) is cer­tainly
questionable. For instance, when food
prices rise, families that allot a greater propor­tion
of their budget to food than th families
surveyed will experience a greater increase in
living costs than is shown by the Consumer
Price Index.
Not only are there various ways to measur
inflation, but there are many different chann Is
through which the inflationary proc ss is trans­mitted.
Differences in the underlying causes of
inflation, even more than measurement prob-
'This article is a cond nsed ver ion of a pap r pr .
sented at the National Agricultural Outlook Confer·
ence in November 1975. The compl t paper may b(>
ordered (see page 2 of cover for addres ).
'. Resp ctively, 0 puty Assistant Dtr ctor for Fis at
Polley and Staff Economist, Congre stonal Budget.
Office. The views expres d are thos of th<· author
and not of the Congr sional Budg t Office.
20
lems, can affect the way inflation impacts on
the family.
EXCESS-DEMAND INFLATION
Consider the case of an inflation triggered by
an excessive demand for labor. This type of
inflation occurred in the late sixties in the eco­nomic
expansion associated with th Vietnam
buildup. Although pric increas d throughout
the economy, labor was in short supply relative
to some other resources. In the long run, firms
could substitute capital and other materials for
labor. In the short run, however, not much sub­stitution
took plac , and real wages-particu­larly
in the industrial and service sectors-rose
relative to real G P. This m ant a real increase
in the spending pow r of the household sector.
From a macroeconomic point of view infla­tion
caused by an excess demand for labor has
an expansionary effect on th conomy. The
process feeds on itself since increased house­hold
purchasing power and pending incr ases
the demand for goods and s rvic s, and h nc
the demand for labor, still fur h r.
A 1970 study by two Univ ity of \ iscon­sin
economists, Hollister and Palm r inve ti­gat
d the effect of xc s-d mand inflation n
the distribution of income within th hous -
hold sector. 3 Th y concluded that th
may benefit as much a oth r ag arn r
sine improved mploym nt opportuniti
available and transfer paym n t.s, such
security and food stamps, tend to ri
than pric s in th s p riod . Furth r, r i n of
wealth du to inflation aff ts th ri h mor
~han the poor, so that inflation l nd to qual­Jze
w alth.
To th xtent that an
tion r distributes in m(' \ ag arn rs and
~h P?or and r di tribut w alth, thi. t IH' of
mflat1 n could p tt>ntially rrouc in •quality.
H?wev r, l~ di tributional impact rna vary
w1th the sk1ll 1 v .I f wag • arn rs, with m
highly skill workers gaining most, , that the
. ' II.ollist r, R G., and Palm r, J . L. Th 1mpacl of
mflat10n on th poor. In Buuldtn~ and Pfaff (t•d )
Rl'dtslribulton o{ lllc Htcll a11d /'oor · Tilt• Grant~ f:co'
nomtcs u{ Income Rcdt. lrtbutioll (' thfornt Wad •
worth, 197 2.
F MILY !:'.<' Ml 'REVIF.V
overall distributional consequences are very
uncertain.
COMMODITY INFLATION
More rec.ently, a different type of inflation­ary
process has emerged with totally opposite
consequences both for overall household
spending power and for the distribution of
incomes within the household sector. Inflation
beginning in 1972 was triggered primarily by
relative increases in food and energy prices.
From January 1973 to July 1975, food prices
rose some 37 percent, while the nonfood com­ponent
of the Consumer Price Index rose 23.6
percent. Hourly compensation increased 20.1
percent over the period, while real spendable
weekly earnings outside agriculture declined
5.6 percent. Further the price of petroleum
increased over 400 percent, with other energy
prices also increasing. The ripple effects of
these dcv lopments were not inconsequential
as wage earners and business managers attempt-to
re ·oup their declining real incomes
through higher wages and profits. A highly
r strictive fiscal and monetary policy that rein­fore
d t.h erosion of real spending power in
the private se tor resulted in a severe recession
that gr atly restricted the ability of workers to
maintain their real earnings and the ability of
firms to incr ase prices to restore their profits.
n mplo mE'nt reached 9 percent and indus­trial
capa ·ity utilization fell by 63 percent.
Effect on Overall Household Spending
From a macro conomi per pective, higher
food and enE'rgy pric have a deflationary
ff t on on mi a tivity sin they reduce
th r al p nding pow r of th household sec­tor,
producing a r al utba kin the demand for
g od and rvice . ThC' o ts of higher food
pri · · f r m ri an hou ehold in e 1973 are
C' timat d to b about $55 billion. Higher
n rgy pric · added 40 billion to th fuel bills
of Am ri an . \\' ighed again t a G P of
around 1,300 billion in 1973, thi repre ents a
izabil' d •fl t.ion m a r al purchasing power for
the · nom as a wh I .'1
s1mplP way to cal ulul thl' dfecl of hi!!her food
pnc •s on lh hou:, hold ~ector i to obsNve that food
n•pr<'st•nu about 2fl pNC<'Ill of th<' avera~tl' hou '<'hold
hud '<'l . Thu~. a I 0 p('rCI'Ill ri. <' m food pricl' , reduce
con um •r rt•al iru.•omt·~ by 2.f1 pt•rct•nl.
PlU (, 1976
Coupled with this overall reduction in spend­ing
power are several major income transfers.
Higher food prices, for instance, transfer
incomes from nonfarm to farm households.
Farm families, however, also must pay higher
prices for the food they eat. Further, farm
households typically spend a smaller percent­age
of their incomes than urban households.
The net effect is a decline in the overall spend­ing
in the economy.
Higher petroleum prices transfer income
both to OPEC (Organization of Petroleum
Exporting Countries) nations abroad and to
domestic oil companies. In the first case, there
is a net drain in purchasing power. In the
second case, whether an increase in oil com­pany
profits deflates overall spending depends
in large measure on the uses to which the pro­ceeds
are put. The initial impact of higher oil
prices since 197 3 has been a sizable reduction
in household's purchasing power. It is unlikely
that the spending propensities of the oil com­panies
from their profits are as high as those of
families from their incomes.
Effect on Various Population Groups
Several factors should be considered when
assessing the effect of commodity inflation on
the distribution of incomes within the house­hold
sector.
• The poor spend a larger proportion of
their incomes on food, gasoline, and home
heating fuels than do affluent families
and, therefore, have experienced greater
increases in their living costs for these
items. 5 ·
• The unskilled, disadvantaged worker is
more likely to become unemployed in a
recession than the skilled, high-income
worker.
• Some categories of workers are better able
than others to obtain cost-of-living adjust­ments
in their incomes.
• As farm prices rise, the gains go primarily
to high-income farmers, with low-income
farmers experiencing little improvement
in their real incomes.
'Higher energy costs result in higher prices through·
out the economy. The higher food prices thus gener­ated
fall more heavily on the poor, yet the overall
rr ct on the famil. bud!!et is indeterminate except for
the p cific cases of gasoline and home-heating fuels.
21
• Asset holders experience erosions of their
wealth in an inflation while debtors' real
obligations fall.
The first four factors-income effects-sug­gest
that higher food and fuel prices produce
an inflationary environment that worsens the
inequality of income distribution within the
household sector, with the burden falling dis­proportionately
on the poor. The last factor­wealth
effect-works in the other direction.
Regre ive effect on real income.6 The table
provides estimates of an average household's
total budget spent for food at different income
levels in 1972 and 1974. The lowest income
group spends over 40 percent of its income on
food while the highest income group spends
about 10 percent on food. With food prices
rising 37 percent from January 197 3 to July
1975 the burden falls more heavily on the
poor.' For example, if the poor spend two-fifths
of their budget on food, and food prices rise 37
percent combined with a 24 percent rise in all
other items the weighted impact on the poor
becomes (2/5 X 37) + (3/5 X 24), or 29 per­cent.
In contrast, the affluent spend one-tenth
of their budget on food. The weighted impact
of the price rises on the affluent becomes 25
percent. The poor are also at a major disadvan­tage
in that their consumption is limited to
begin with so that a shift to less costly items is
not always possible. This is due in part to the
disappearance from the market of many
simple, les expensive foods.
A similar analysis can be done for gasoline
expenditures by income group as this is
another component of the budget that has
shown dramatic price increases. The poor, as an
income group, spent some 5 p rcent of their
average weekly income on gasoline during the
period July 1972 to June 1973. The afflu nt
(average income of $17 ,749) sp nt und r 3 p r­c
nl of their weekly incom on gasolin during
the sam period. As gasolin prices have on­tinued
to increase sine thai limP, it b ·om
obvious that thes ('XP nditurcs arc falling
heavily on the poor. In addition, low-incom
households sp nd an av rage of more than 11
' R(•al incomP is pur('ha~>in ~ powc·r of in um , for
cxampiP, monPy incom • adjuslNI to n•flp t pric~>
changr· · in the goods and sNvict•.s pu rch; •d hy thl'
family.
22
Food expenditure as a fraation of inaome
by inaome deaiZe for 1972 and 1974
Income
decile
Food/income
1972 1974
Lowest ........... .
Second ........... .
Third ............ .
Fourth ........... .
Fifth ............ .
Sixth ............ .
Seventh .......... .
Eighth ........... .
Ninth ....... ..... .
Highest .......... .
Average ........ .
40.1
31.1
25.1
21.2
19.1
17.5
15.8
14.0
13.1
10.8
20.7
Per ent
46.6
32.7
28.0
22.4
20.8
18.9
17.6
14.9
14.3
11.4
22.8
Source: Draft chapter, vol. 4, Five Thousand
Families: Patterns of Economic Progress,
Institute for Social Research, University of
Michigan, 1975.
percent of their in orne on natural gas and elec­tricity,
compared with Jess than 2 p rcent for
hous holds with annual incomes over $16,000.
Thus, an increase in prices of food, gasoline,
and home-h ating fu I affects th poor propor­tionately
more than other groups in oci ty.
Yet, r cession cannot be viewed as a trade-off
to ease the burd n of pric increase on this
group becaus it is th poor-th un kill d, di -
advantaged work r-that ar mor lik ly to b
un mployed in a r c sion. By ra , bla k ar
hurt mor by the incr as in un mploym nt (a
measur d by the absolute in ·r a in th ir
unemploym nt rat ). Blacks aJ o fall mor
heavily into Lhe category las ifi d a poor. By
x and age, worn n and t<>enag r . ·p rien d
gr ater incrras in lh ir un mploym nt rat s
al o. By cupalion, blu -collar \ ork rs, par­ti
ularly p raiiv s and nonfarm labor r ·uff r
the most un mployment. Th · ar th un kill-d
work rs who fall h avily into th cat g ry
of "poor." By indu tr , lh hurd n of
un mpl ym 'nt fell hl'avi t n
and manufa Luring, ar a' that , r
unionizPCl hut whPr · nonuniot j h
paying and in ·p ·un'.
Not only do th poor re !•iv<' a dispro­portionate
shart of tlw burd n of b th com­modity
inflation and un 'mploynwnt, hut m ny
I• A. 11L' 1<: ONO. II('. H.!-, VIEW
poor families are less able than others in the
population to obtain cost-of-living adjust­ments-
such as escalator clauses in collective
bargaining contracts-in their incomes.
Escalator clauses have played a significant
role in wage determination in union contracts
since World War II, but they have operated in a
cyclical fashion-being very common during
periods of inflationary expectations and less
common during periods of stable prices. The
seventies have shown an increase in escalator
clauses, but the clauses still cover a small frac­tion
of the American work force. For example,
in 1974 the U.S. labor force numbered 91.1
million persons. Average employment for the
year in nonagricultural establishments (includ­ing
government) was 78.3 million. Of this num­ber,
only 7.7 million or some 9.8 percent were
covered by escalator clauses. The average
increase for workers covered by escalator
clauses has been considerably less in recent
years than the increase in prices. During 197 4
the Consumer Price Index (CPI) rose by 12.2
percent. orne 31 percent of the workers cover­ed
by escalator clauses (mostly in trucking)
received less than 2 percent by way of escalator
wage increases. Of the covered workers, 14 per­cent
received wage increases between 8 and 9
percent, 29 percent received increases between
9 and 10 percent, and 7 percent (under 1 per­cent
of the entire work force) received
increas of 10 percent or more. Thus, escala­tion
clau s do not offer widespread protection
to th .S. work force against the burden of
higher pri
Th poor do b nefit from cost-of-living
adjustm nts, how ver, in case where transfer
paym nts ar ti d to the CPl. The main exam­ples
of th o ial ecurity payments and
food tamps.
Food tamp bonus payments are tied to the
food compon nt of th CPl. Yet, the payment
sch dul . i only r vi ed very 6 months as an
aft r-th -fa t r ognition of higher food prices .
Th in rim exp nditure ar not made
u n r i r c gnili n giv n to anticipation of
furth r food pri in r as . Further food
tamp not alway ·ov r a family's total
fo d l ill ·in v ra i on a liding scale that
d p nd n income. D pite the rapid expan­f
thi pr gram ov r the pa t few years,
1 t ommitt e on utrition and
d h · timat that onl 38 per-
PRI , 1 76
cent of those eligible for food stamps are
receiving them.
Thus, while the poor are hurt proportion­ately
more by rising food prices, a third of this
group is at least partly protected from the
impact. Of the two-thirds remaining, it is prob­able
that some are benefiting from other trans­fer
payments that cover some of the burden of
higher food prices. Yet, these figures indicate
that the burden falling on the poor is still very
great.
Higher food prices reduce real incomes in
the nonfarm economy, but increase incomes in
the farm sector. Total farm income (net of
expenses) increased 43.4 percent between 1972
and 1974. Within the farm sector, however,
these gains were not distributed evenly. It is
not the small single-family farm that benefited,
but rather some 35 percent of this income
went to commercial farms with over $100,000
in sales, which make up only 4 percent of all
farms. 7
Thus, while farmers gain at the expense of
the consumer, small farmers gain very little at
all while large farmers make more substantial
gains. The same might be said for the gains of
large oil companies-both domestic and for­eign-
when oil prices rise.
Wealth effects. While the income transfers
associated with a commodity price inflation
tend to be regressive, the wealth effects act in
the opposite direction. Higher prices erode the
value of fixed value assets and also reduce the
real value of debts. The recession also produced
a sharp decline in equity prices, contributing to
a decline in the market value of paper assets.
Property that is not fixed in value, however,
like real estate, will not be affected and may
even gain in value relative to the increase in
consumer prices.
These wealth effects most likely took their
heaviest fall on upper income families. The
very poor would not be likely to feel much
effect in either direction, since they are neither
asset-holders nor debtors (not being good
credit risks). The distributional impact among
middle-income families is less certain, since the
balance sheets of families in the middle-income
ranges vary widely with respect to indebted­ness,
net worth, and the composition of assets.
' U.S. Department of Agriculture, Economic
Re earch Service, Farm Income Statistics, July 1975.
23
SOME NEW USDA PUBLICATIONS
(Please give your ZIP code in your return address when you order these.)
The following are for sale by the Superintendent of Documents, U.S. Government Printing
Office, Washington, D.C. 20402:
• EW LIFE FOR OLD DWELLINGS: APPRAISAL AND REHABILITATION. AH 481.
December 1975. $1.70.
• NUTRITIVE VALUE OF AMERICA FOODS-IN COMMON UNITS. AH 456.
ovember 1975. $5.15.
• THAT WE MAY EAT. 1975 Yearbook of Agriculture. $7.30 (hardback).
Single copies of the following are available free from the U.S. Department of Agriculture. Please
address your request to the office indicated .
From Office of Communication, Washington, D.C. 20250:
• GROWING BLACKBERRIES. FB 2160. Revised October 1975.
• CO TROLLING TOMATO DISEASES. FB 2200. Revised September 1975.
• HOW TO MAKE JELLIES JAMS, A D PRESERVES AT HOME. G 56. Revised
December 1975.
• GROWING FLOWERING ANNUALS. G 91. Revised October 1975.
• HOMEMAKERS' FOOD A D UTRITIO K OWLEDGE, PR CTICES, AND OPI -
IONS. HERR 39. November 1975.
From Economic Research Service, Division of Information, Washington, D. . 20250:
• FARM POPULATION ESTIMATES FOR 1974. AER 319. D cemb r 1975.
From Food and Nutrition Service, Information Division, Wa hington D .. 20250:
• FOOD STORAGE GUIDE FOR SCHOOLS A D I STIT TIO . P 403. Revi d
ovember 1975.
From Statistical Reporting Service, Information Division, Washington, . . 20250:
• SCOPE AND METHODS OF THE STATISTICAL REPORT! G ERVI E. M 130
July 1975.
THE HIRED FARM WORKING FORCE OF 1974
In 1974, there wer approximately 2.7
million persons 14 years of age and over who
did farm wagework at some tim during the
year. The hired farm working force has chang­ed
little over the past 3 years. Thus, th annual
employment of farmworkcrs appears to hav
become stable after the long downward tr nd
of pr vious years.
Generally, hired farm wag workers wer
young (m dian ag 23 y ars), whi (83 per·
cent), male (79 percent), and r sid d in non­farm
places (76 p rc nt). Th y arned an
av rage of $1,447 in annual cash wages, or
$16.60 per day for 87 days of farm wag work.
24
our : U.S. D1•parlnwnt or J,!ricullur , E onum1c
ll!•st>ar h t•rvi<'l' , Tlw lltrl'd Fnrm tru r/tr11 • f'11r r of
I!J74 A Stalr.<lu·a/ fll'fWr/ , Ef 2 7, July I !li fi.
fAMILY E' 0.11<' REVU~W
SOME NEW USDA CHARTS 1
ENERGY PRICES
'1. OF 1 967-~----,-----..------r:----.,
/
.'
200~----4-----~-- '---~
.Lfuel oil
.' & coal•
1751------+--------+--- 1--------1
I
; ,.·}
150 1------+-------+.' -./~ --------~ I ;,-:,-
_i i.-\..
125 ~onsumer ~~- t~ Gas & electricity •
price int•~··-.. . ... ·····;--<;
1
. osoline, regular
100
~:;;;:::;;;;.:::..-::.::. ...........••.... /· & premium•
1967 1970 1973 1976
• IICti/OilJ lilt ,.,..,I<IG f .. Ql• o,""Uo!Of'O "r rttii.NV'OttfAT/0'11 ·N~/1 b. 'VO\Or .. AVEltAIO( fOif '~'
IU: ~'"' l,lttf.A'W' """(J l,.tto;flf.!. ·~ Ctl'loCAt ....Oitrlll'<i
1 Black and white photographic prints or colored
slides of charts may be ordered from Photography
Divi ion, Office of Communication, U.S. Department
of Agriculture, Washington, D.C. 20250. Slides are 30
CONSUMER PRICE INDEX
% OF 1967
All Items Food Medical Housing a TransportatiOn Apparel
Care & Upkeep
cents each and prints are $2.70 (8" X 10" or less).
When ordering, please give negative number, title of
chart, and, if a print, the size desired.
TO RENT OR BUY
The wide variety of choice in today's shelter
market the mobility of American families, and
the opportunities for returns on savings in
inv stm nts other than housing have all con­tribut
to the complexity of decisions on
wh th r to rent or to buy one's shelter needs.
As a r ult, a sound decision cannot be based
on a simpl omparison of the monthly costs
for owning and r nting. A bulletin prepared in
1974 by Raymond W. Gieseman of the Bureau
of Labor tatistic , U.S. Department of Labor,
ntitl d "R nt or Buy: Evaluating lternatives
in th h It r Mark t,' d crib a method of
anal zing th financial cost and benefits of
O\ nin a hom ompar d with r nting in com­bination
, ilh a program of r gular monthly
iii d p riod of time. The bul­ma
b ord red for 80 cents
up rint nd nt of Documents,
.. Gov rnm nt Printing ffic , Washington,
D. . 20402 ( to ·k . 029-001-01341- }, or
from on urn r Informati n, Publi Do u-
Pu blo, olo.
onden ed
PRl 1 7
from the bulletin was presented by the author
at the National Agricultural Outlook Confer­ence
in December 1975. This paper is available
from the Consumer and Food Economics Insti­tute
(see page 2 of cover for address).
The bulletin gives step-by-step calculations
on how to determine the monthly rental rate
which would permit the renter to equal the
gains from ownership. The method assumes
that the renter invests the money that would
otherwise be required initially to purchase a
house-such as a downpayment and settlement
costs-and, in addition, follows a program of
regular monthly saving. The estimate of the
cost of owning a house includes the downpay­ment,
settlement costs, the monthly mortgage
payment, and other monthly outlays for real
estate taxes, property insurance, maintenance
and repairs, and utilities. The potential tax sav­ing
through the deduction of interest is consid­ered.
An estimate is made of the net proceeds
from the sale of the house after a given number
of years.
25
!-.:)
0)
'r. >
3:
~
~. c
,........
~ ....
::": <
{'1'!
~
Cost of food at home estimated for food plans at foUl' aost levels, Marah
Sex-age groups
FAMILIES
Family of 2: 2/
20-54 years: ............. .
55 years ant! over ........ .
F3l11ily of 4:
Couple, 20-54 years and
children--
1-2 and 3-5 years ..... ..
6-8 and 9-11 years ..... .
INDI\'IOlJALS ~
Child:
7 months to 1 year ....... .
1-2 years ................ .
3-5 years ................ .
6-8 years ................ .
9-11 years ............... .
:!ale:
12-14 years ............. ..
15-19 years ... ........... .
~0-54 years .............. .
55 years and over ....... ..
!'eoale:
12-19 years .............. .
:!0-54 years ............. ..
55 years and over ........ .
PrcJ::nant ................. .
::ursiny .................. .
Cost for 1 week
11ni fty I Lo~-cost I '1orlerate- I Liberal
_j)_l_arl__ plan cost plan plan
Dollars Dollars Dollars Dollars
22.10
19.80
31.40
37.90
4.50
5.10
6.20
7.90
9.90
10.60
11.70
11. 10
9.80
9.40
9.00
8.20
11.30
12.00
28.90
25.60
40.80
49.30
5.60
6.60
7.90
10.20
12.80
13.60
15.00
14.60
12.80
12.10
11.70
10.50
14.50
15.40
36.30
31.80
50.90
61 . 80
6.80
8.10
9.80
12.80
16.00
17.10
18.80
18.40
15.90
15.00
14.60
13.00
17.90
19.20
43.70
38.20
61.20
74.40
8.10
9.70
11.80
15.40
19.30
20.50
22.70
22.20
19.20
18.00
17.50
15.50
21.40
22.90
Thrifty
plan
DolZars
96.10
85.80
136.50
164.80
19.60
22.20
26.90
34.40
43.00
46.00
50.50
48.20
42.60
40.90
39.20
35.40
49.00
52.10
197 6 , l'. S . ave rage l
Cost for 1 month
I Low-cost I Moderate- I Liberal
plan cost plan plan
Dollars Dollars Dollars
125.30
110.90
176.50
213.50
24.20
28.50
34.10
44.30
55.30
59.00
65.10
63.10
55.30
52.60
50.80
45.50
62.90
66.80
157.30
137.70
220.50
268.00
29.50
35.20
42.30
55.50
69.50
73.90
81.60
79.70
68.90
65 . 20
63.30
56.30
77.50
83.00
189.40
165.10
265.00
322.50
35.00
41.90
50.90
66.80
83.50
88.80
98.30
96.30
83.00
78.00
75.90
67.10
92.50
99.10
1/ Assumes that foot! for all ncals and snacks is purchased at the store nntl preparccl at home. l'stil'lates for each
plan "ere coMputed fron quantities of foods published in the lvinter 197n (thrifty plan) and \\'inter 1975 (low-cost,
.ode rate-cost, and liberal plans) issues of Farrily Eaonorr1'as Revi(!!J. The costs of the food plans were first estimated
usinJ! prices paid in 1965-66 by households fro!" t!SOA's Jlousehold Food Consumption Survey with food costs at four
selected levels. These prices are updated hy usc of "Fstirated Retail Food Prices by Ci tics• · relensed monthly by the
Bureau of Labor Statistics.
2/ 10 percent added for family size adjustment. See footnote 3. J.t The costs given are for individuals in 4-person families. for individuals in other size families, the following
adjustrents are suggested: 1-person--add 20 percent; 2-person--add 10 percent; 3-person--add 5 perc~nt; 5-or-6-
person--subtract S percent; 7-or-more-person--subtract 10 percent.
n
0 .e.n..
0
"""
0"" "
0 c
~
::
0
3:
!""'
c:
en
l> :z
c
::1:1
m
C') -0 :z
en
Cost of food at home estimated for food plans at three cost levels,
March 1976, Northeast Region y
Sex-age groups
Low-cost · i Ioder ate- Liberal
plan cost plan plan
Dollars Dollars JloUars Dollars DoZZ.ars Dollars
FAHILIES
Family of 2: 2/
20-54 years: ............ 30.60 39.30 47.30 132.80 170.20 205.20
55 years and over ....... 27.10 34.30 41.20 117.40 148.80 178.80
Family of 4:
Couple, 20-54 years
and children--
1-2 and 3-5 years ..... 43.00 54 . 80 66 . 00 186.50 237.60 286.20
6-8 and 9-11 years .... 51.90 66 .50 80.10 225.30 288.30 347.20
INDIVIOIJALS ~/
Child:
7 months to 1 year ...... 5.80 7.20 8.60 25.00 31.40 37.10
1-2 years ............... 6.90 8.70 10.40 30.00 37.70 45.20
3-5 years ............... 8 . 30 10.40 12.60 35.80 45.20 54.50
6-8 years ............... 10.70 13.70 16.50 46.60 59.40 71.40
9-11 years .............. 13.40 17 .10 20.60 58.00 74.20 89.30
'lale:
12-14 years ......... ... . 14.30 18.30 21.90 62.10 79.10 95.00
15-19 years ............. 15.80 20.20 24.30 68.40 87.50 105.40
20-54 years ............. 15.40 19.90 24 .10 66.90 86.20 104.40
55 years and over ....... 13.50 17.20 20.80 58.60 74.50 90.00
Female:
12-19 years ....•........ 12.70 16.10 19.30 55.00 69.70 83.50
20-54 years ............. 12.40 15.80 18.90 53.80 68.50 82.10
55 years and over ....... 11. 10 14.00 16.70 48.10 60.80 72.50
Pregnant ...•............ 15.30 19.30 23.00 66.30 83.40 99.80
. 'urs ing ................. 16.30 20.60 24.70 70.50 89.50 107.00
y Assumes that food for all neals and snacks is purchased at the store and prepared at home.
Estimates for each plan were computed from quanti ties of foods publisherl in the Winter 1975
issue of Family Economics Review. The costs of the food plans were first estil"ated usinr
prices paid in 1965-66 by households in the :-lortheast from the USDA's Household Food Con­sumption
Survey with food costs at three selected levels. These prices are updated by use of
''Estimated Retail Food Prices by Cities" (Boston; ~ew York, ~ortheas tern New Jersey;
Phi !adelphia) released monthly by the Bureau of Labor Statistics.
2/ 10 percent added for family size adjustment. See footnote :>.
"J..l The costs given are for individuals in 4-person families. For individuals in other size
families, the followin~ adjustments are suggested: 1-person--add :!0 percent: 2-person--acld 10
percent; 3-person--add 5 percent; 5-or-~-person--subtract 5 percent; 7-or-l"ore-person--suhtract
10 percent.
'PRl (, 197,
27
Cost of food at home estimated for food pZans at three cost levels,
March 1976, North Central Region 2/
'>ex-ar.e groups
FA.\HLIES
Family of 2 : 2/
20-54 years--: ........... .
55 years and over ...... .
Family of 4:
Couple, 20-54 years
and children--
1-2 and 3-5 years .... .
6-8 and 9-11 years ... .
INOIVIDU.i\LS 3/
Child: -
7 months to 1 year ..... .
1-2 years .............. .
3-5 years .............. .
6-8 years .............. .
9-11 years ............ ..
~ !ale:
12-14 years ............ .
15-19 years ............ .
20-54 years ............ .
55 years and over ...... .
FeMale:
12-19 years ............ .
20-54 years ............ .
~S years and over ...... .
Prernant . . ............. .
. urs inp ........... , .... ,
Cost for 1 lvcck
Low-cost 1 11oderate-plan
' cost plan
Do llars
28.80
25.50
40.SO
49.10
s.so
6. so
7.80
10.20
12.70
13.60
1S.OO
14.SO
12.70
12.10
11.70
10.50
14.40
15.30
Dollars
3S.SO
31.10
49.80
60.60
6.60
7.90
9.60
12.60
1S.70
16.70
18.50
18.00
1S.60
14.80
14.30
12.70
17.SO
18.70
Liberal
plan
Dollars
42.90
37.40
60.00
73.10
7.80
9.SO
11. so
IS .10
19.00
20.10
22.30
21.80
18.80
17.70
17.20
15.20
21.00
22.SO
Cost for 1 Month
LO\>J-COS t
plan
!JoZ Zars
124.70
110.40
17S.80
212.80
23.90
28.40
34.00
44.20
SS.20
S8.90
64.90
62.90
SS.10
S2.40
so.so
4S.30
62.SO
66.30
Dollars
154.00
134.90
21S.80
262.70
28.70
34.40
41.40
S4.SO
68.20
72 .so
80.10
78.10
67.SO
63.90
61.90
SS.10
7S.70
81.10
Liberal
plan
Dollars
186.00
162.30
260.10
316.80
33.90
41.00
so.oo
65.60
82.10
87.30
96.80
94.60
81.60
76.60
74.SO
65.90
90.80
97.30
1/ Assumes that food for all meals and snacks is purchased at the store and prepared at hol'1e.
r:stimates for each plan were computed froM quantities of foods puhlishecl in the \\'inter 1975
issue of Family Economics Review. The costs of the food plans were first I'Stirated usiny
prices paid in 1965-66 by households in the North Central RetTion froM the IJSD.i\'s Household
food ConsuMption Survey with food costs at three selected levels. These prices arc updated hy
usc of "EstiMated Retail Food Prices by Cities" (Chicapo, Cleveland, Detroit, St. Louis)
released monthly by the Bureau of Labor Statistics.
2/ 10 percent added for family size adjustment. Sec footnote 3.
3! The costs given are for individuals in 4-person families. For individuals in other size
families, the followinp adjustments are suggested: 1-person--add 20 percent ; 2-person--add 10
percent; 3-person--add S percent; S-or-6-person- -subtract S percent ; 7 -or-More-person- -suhtract
10 percent.
28 FAMILY ECO OMI , REVIEW
Cost of food at home estimated fo1' food pZans at thi'ee cost ZeveZs,
Ma1'ch 1976, Southern Region l(
Sex-age groups
FAMILIES
Family of 2: 2/
20-54 years-:-............
55 years ancl over .......
Family of 4:
Couple, 20-54 years
and children--
1-2 and 3-5 years .....
6-8 and 9-11 years ....
INDIVIDUALS ~
Child:
7 nonths to 1 year ......
1-2 years ••..••.........
3-5 years •..............
6-8 years .............. .
9-11 years ............ ..
!ale:
12-14 years ............ .
15-19 years ............ .
20-54 years ............ .
55 years and over ...... .
Female:
12-19 years .. ... . . ..... .
20-54 years ............ .
55 years and over ...... .
Pregnant ............... .
Nursing ................ .
Cos t
Low-cost
plan
Dolla1's
28.70
25.30
40.20
48.80
5.40
6.40
7.70
10.10
12.60
13.50
14.90
14.40
12.60
12.10
11.70
10.40
14.40
15.30
for 1 week
~ loclerate-cost
plan
TJo ZZa1's
35.40
30.90
49.50
60.40
6.60
7.80
9. 50
12.50
15.70
16.70
18.40
17.90
15.40
14.80
14.30
12.70
17.50
18.80
Liber;ol
plan
Dolla1's
41.10
35.70
57.60
70.00
7.70
9.10
11.10
14.50
18.10
19.30
21.40
20.80
17.90
17.10
16.60
14.60
20.30
21.80
Cost
Low-cost
plan
DoZZars
124.20
109.60
174.30
211.40
23.60
27.90
33.50
43.70
54.80
58.50
64.70
62.40
54.50
52.40
50.50
45.10
62.50
66.30
for 1 MOnth
~ lode rate-cost
plan
Dollars
153.50
133.80
214.50
261.40
28.60
33.90
41.10
54 .10
67.80
72.20
79.80
77.50
66.70
63.90
62.00
54.90
76 .00
81.30
Liher:~l
plan
Dollars
178.60
155.00
250.10
303.90
33.40
39.60
48.10
62.90
78.60
83.80
92.80
90.30
77.60
74.10
72.10
63.30
88.10
94.30
Y As sumes that food for all meals ancl snacks is purchased at the store and prepared at home.
l.:s timates for each plan were computed from quanti ties of foods published in the Winter 1975
issue of FamiZy Economics Review. The costs of the food plans were first esti~ated using
prices paid in 1965-66 by households in the South froll' the USDA's Household Food Consumption
Survey with foocl costs at three selected levels. These prices arc upclated hy use of "Esti­mated
Retail Food Prices by Cities" (Atlanta; Baltimore; Washington, D. C., 11aryland , Virginia)
released monthly by the Bureau of Labor Statistics.
2/ 10 percent added for family size adjustMent. See footnote 3.
3! The costs given are for individuals in 4-person families. For inclividuals in other size
frunilies, the following adjustments are sugrestecl: 1-person--add 20 percent; 2-pcrson--adcl 10
percent; 3-person--add 5 percent; 5-or-6-person--subtract 5 percent ; 7-or-more-person--suhtract
10 percent.
29
PRING 1976
Cost of food at home estimated for food prans at three cost revers,
March 1976, Western Region 1/
Cost for 1 week Cost for 1 month
Sex-are groups
Low-cost I !ode rate- Lihcral L01~-cost ~!ode rate-plan
' cost plan
I
plan plan cost plan
DoUars DoUars DoUars DoZrars DoUars
FMIILIES
Fal"ily of 2: 2/
20-54 years~ ............ 28.20 35.60 43.10 122.30 154.60
55 years and over ....... 25.10 31.10 37.60 108.20 135.20
Family of 4:
(oup1e, 20-54 years
and chi 1 dren--
1-2 and 3-5 years ..... 39.70 49.90 60.50 172.40 216.10
6-8 and 9-11 years .... 48.20 60 .80 73.70 209.10 263.60
I. !HVIDUALS ll
Child:
7 nonths to 1 year ...... 5.40 6.50 8.00 23.40 28.30
1-2 years .... . ..... · ..... 6.40 7.90 9.60 27.80 34.20
3-5 years ............... 7.70 9.60 11.70 33.40 41.40
6-8 years ............... 10.00 12.60 15.30 43.50 54.60
9-11 years .............. 12.60 15.80 19.20 54.40 68.50
'!ale:
12-14 years ............. 13.40 16.80 20.40 57.90 72.80
15-19 years ............. 14.70 18.50 22.50 63.70 80.30
20-54 years ............. 14.20 18.10 21.90 61.70 78.40
55 years and over ....... 12.50 15.60 18.90 54.00 67.70
FeMale:
12-19 years ............. 11.90 14.80 17.90 51.40 64.00
20-54 years ............. 11.40 14.30 17.30 49.50 62.10
55 years and over ....... 10.30 12.70 15.30 44.40 55.20
Prernant ................ 14.10 17.50 21.10 61.10 75.90
:'ursinp ................. 15.00 18.80 22.60 64.90 81.40
Liberal
plan
DoUars
186.80
162.90
261.70
319.30
34.50
41.40
50.50
66.40
83.10
88.30
97.60
95.00
81.90
77.40
74.80
66.20
91.30
97.80
1/ Assul"lcs that food for all meals and snacks is purchased at the store and prepared at ho~e.
Estil"ates for each plan lvcre colljluted from quantities of foods puhlishe~ in the Winter 1975
issue of Famiry Economics Review. The costs of the food nlans 1vcre first cstil"ated usinp
prices paid in 1965-66 by households in the West froll' the USDA's Household Food Consumption
Survey !.'ith food costs at three selected levels. These prices are updated hy usc of "F.stimated
Retail Food Prices hy Cities" (Los Anpeles; San Francisco, flakland) released monthly by the
Bureau of Labor Statistics.
2/ 10 ryercent added for family size adjustll'ent. Sec footnote 3.
3/ The. costs p:iven arc for indi victuals in 4-person families. f'or individuals in other size
fanilies, the followinp adjustments arc sugpcsted: 1-pcrson--add 20 percent; 2-pcrson--add 10
p(;rccnt ; 3-person- -add 5 percent; 5-or-6-person- -suht ract 5 percent; 7-or-morc-pcrson- -subtract
10 percent.
30 FAMILY E 0 MI REVIEW
CONSUMER PRICES
Conswne!' pl'iae index f'or u1'ban L.,age ea!'ners and aZe!'iaal LI01'kers
(1967 = 100)
Group March 1976 Feb. 1976 I Jan. 1976 March 1975
All i tell's ................... .
Food .......................
Food at horne ............ . 1
Food away from ho~e ..... .
llousinr. ................... .
Shelter ................. .
Hent . . ................ ·1
llomeownershi p . ......•..
Fuel and utilities ...... .
Fuel oil and coal ..... .
Gas and electricity ... .
Jlousehold furnishings
and operation .. ..... ·, ..
Apparel and upkeep ........ .
'!en 's and boys ' .•........
Women's and girls' ...... .
Footwear ...........•.....
Transport at ion ............ .
Private ................. .
Public .................. .
Health and recreation ..... .
tedical care ........... ..
Personal care ........... .
Readinp and recreation .. .
Other r,oods and services.
167,5
178.7
177.7
182.8
1'14 0 5
176.3
142.7
188.7
178.9
247.6
183.7
166.6
145.0
145 .4
138.5
147.5
159.8
158.5
172 0 3
160.6
180.6
157.4
149.0
151.8
167.1
180.0
179.6
181.9
173.8
176.0
142.1
188.6
177 0 9
249.4
181.9
165.2
144.0
143.9
138.2
146.1
158.5
157.2
170.4
159.7
178.8
157.0
148.5
151.3
Source: U.S. DepartMent of Labor, Bureau of Labor Statistics.
166.7
180.8
180.8
180.9
173.2
175.9
141.2
188.8
176.3
248.9
179.5
163.7
143.3
142.6
138.1
144.7
158.1
156.8
170.2
158.6
176.6
155.7
148.2
150.5
Index of p1'ices paid by farrne!'s for fani ly Zi v1:ng i terr·s
(19C7 = 100)
Mar. Feb. Jan. ~1ar. Feb.
Item 1976 1976 1976 1975 1975
All items .................... 184 183 183 173 175
rood and tobacco ........... 1
181 --- --- 176 ---
Clothing ................. "I --- 193 --- --- 182
Household operation ........ --- --- 188 --- ---
161 --- ---
llouseholcl furnishings ...... --- ---
--- 183 ---
Building materials, house .. 1 192 ---
I
Source: U.S. Department o f Agn· cu 1t ure, Statistical Reportinr Service.
SPRING 1976
.....__
157.8
171.3
171.4
171.3
163.6
166.6
135.5
178.2
163.0
228.3
164.0
155.6
140.9
141.3
136.1
144.0
144.8
144.0
152.3
151.1
164.6
148.9
142.0
146.5
Jan.
1975
173
168
149
31
FAMILY ECONOMICS REVIEW
SPRING 1976
CONTENTS
Family Expenditures: The Farm Family Living Survey
Fred C. Thorp
Page
3
Recent Changes in American Families . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Canning and Freezing-What is the Payoff? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Euelyn H. Johnson
Amendments to Real Estate Settlement Procedures Act 13
How Households Use Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Dorothy K. ewman and Dawn Day
The Impact of Inflation on Families. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Nancy S. Barrett and Anita Driscoll
The Hired Farm Working Force of 1974 24
Some ew USDA Charts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
To Rent or Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Regular Features
Some ew USDA Publications 24
Cost of Food at Home, U.S. and Regions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Consumer Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
lssu May 1976
32 FAMILY E NOMI REVIEW