Family Economics Review [1981, Number 4]

              FALL 1981
IN THIS ISSUE:
CREDIT USE- PURCHASE OF
HOUSEHOLD APPLIANCES
THRIFTY FOOD PLAN
PRESIDENT'S COMMISSION ON PENSION
POLICY-AN UPDATE
Dep sito
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U.S. DEPARTMENT OF AGRICULTURE
Agricultural Research Service
FAMILY ECONOMICS REVIEW is a quarterly
report on research relating to economic aspects
of family living. It is prepared primarily for
home economics agents and home economics
specialists of the Cooperative Extension Service.
Editors: Kathleen K. Scholl
Katherine S. Tippett
Family Economics Research Group
Agricultural Research Service
U.S. Department of Agriculture
Federal Building
Hyattsville, Md. 20782
Agricultural Research Service, Family Economics Review, Fall 1981
Published by Agricultural Research Service,
Northeastern Region, U.S. Department of Agriculture, Beltsville, Md. 20705
FAMILY ECONOMICS REVIEW
CREDIT USE IN THE PURCHASE OF HOUSEHOLD APPLIANCES
By Marsha Freeman Epstein1
Credit Trends
Consumer credit outstanding increased dra­matically
over the past 20 years both in dollar
terms and as a percentage of personal dispos­able
income (8). In early · 1960 consumer
credit outstanding was $60.0 billio~ and repre­~
ented 17.4 percent of personal disposable
mcome. By early 1980, consumer credit out­standing
had increased 541 percent to $384.4
billion and represented 19.8 percent of per­sonal
disposable income, down from a high
of 22.2 percent in mid-1979.
Consumer credit is credit extended to in­dividuals
through .regular business channels
such as commercial banks, finance companies
credit unions, and retailers to finance or re~
finance consumer purchases (8). Most credit
that consumers use is in the form of install­ment
credit, which is repaid in two or more
scheduled payments. The rest is noninstallment
credit, which is repaid in one lump sum.
Noninstallment credit includes single-payment
loans, charge accounts, and credit provided
by service providers such as doctors and
hospitals.
The rapid increase in consumer credit out­standing
may be due to several factors (8):
1. The high inflation rate of the late seven­ties
encouraged households to buy on credit
because they knew that they would repay
the loans with "cheaper" dollars.
2. While the rate of increase in the price
of personal expenditures almost doubled from
1976 to 1979, the interest rate on finance
company personal loans remained relatively
constant at 20 to 21 percent, which led to a
decline in "real" interest rates.
3. Consumers tended to use credit instead
of cash and pay their outstanding balance in
full at the end of the billing period.
4. The portion of the population most
likely to maintain an installment debt balance­families
with a head aged 25 to 44-increased.
Although in the long run consumer credit
outstanding increased, credit growth slowed
during the recession periods of 1961, 1970,
1 Family economist, Family Economics Research
Group, Agricultural Research Service, U.S. Department
of Agriculture.
FALL 1981
1975, and 1980. The use of consumer credit
fell dramatically during early 1980 as a result
of credit controls enacted by the Federal
Reserve Board (Fed).
Consumer credit for the purchase of con­sumer
durables followed a pattern similar to
that of consumer credit in general. Although
data on consumer credit outstanding for
~urables are unavailable, the Fed does publish
figures on consumer credit extended for the
purchase of durables (2). Consumer credit
extended is the amount of credit granted
during a specific time period, such as a fiscal
quarter or year. Consumer credit extended
for the purchase of durables reached a high
of 3.5 percent of personal disposable income
in the late seventies and then fell to a low of
0.2 percent in 1980. This decrease resulted
not only because of the Fed's credit controls
but also because households spent fewe;
dollars on consumer durables. Preliminary
estimates for the first quarter of 1981 indi­cate
both an increase in expenditures for
consumer durables and an increase in the
use of consumer credit for the purchase of
those durables.
Credit User Characteristics
What kind of households use credit to buy
consumer durables? Research (3, 5, 6) indicates
that durable purchasers and credit users have
many common characteristics. Durable pur­chases
and credit use are reported most often
by young married couples (under 45 years of
age) with children. Levels of durable purchases
and credit use are positively related to house­hold
income and negatively related to age of
household head. New homeowners are more
likely than renters or established homeowners
to purchase durables and use credit.
While many studies have analyzed the char­acteristics
of credit users compared with non­users
(1, 3, 4), little descriptive analysis con­cerning
the characteristics of debtors at differ­ent
levels of credit use has been published. To
describe some economic and demographic char­acteristics
of households associated with high
and low levels of credit use in the purchase of
household appliances, staff of the Family
3
Economics Research Group (FERG) analyzed
data from the 1972-73 Consumer Expenditure
Survey (CES)-the most recent detailed in­formation
available of this type. The CES
contains information on the purchase price
and payment method for major and minor
appliances purchased during a 26-month sur­vey
period. 2 According to the CES, credit
includes 30-day credit, installment credit, and
other credit such as revolving and layaway
plans.
Data Analysis
Almost all the approximately 20,000 survey
households purchased at least one household
appliance during the survey period, and almost
half the purchasers used credit on at least one
occasion. Only households that purchased at
least one household appliance on credit (8,049
households) were included in this analysis.
Households were divided into two groups
by the amount of money spent on household
appliances. This division was done to avoid
potentially misleading results caused by the
comparison of households with extremes in
appliance expenditures. Households that spent
more than the average appliance expenditure
of the sample ($1,334) were classified as having
a high appliance expenditure, while those that
spent the average or less were classified as
having a low appliance expenditure.
The propensity to use credit,
dollars spent on appliances purchased on credit
dollars spent on appliances X 100,
was then calculated for each household, and
an average propensity to use credit was calcu­lated
for each of the two appliance-expenditure
groups (50 pet for the high appliance-expendi­ture
group and 54 pet for the low appliance­expenditure
group). Next, within each ap­pliance-
expenditure group, households were
divided into two subgroups of low and high
2 Data derived from the Interview Survey Inventory
of Consumer Durables Public Use Tape, Consumer
Expenditure Survey-1972-73, U.S. Department of
Labor, Bureau of Labor Statistics. The survey period
includes purchases made from January 1972 through
March 197 3 for those households in the first survey
year, and January 1972 through March 1974 for those
households in the second survey year.
4
propensity to use credit. Households with a
propensity to use credit that was greater than
the group's average were classified as having a
high propensity to use credit, while those with
a propensity to use credit that was equal to
or less than the group's average were classified
as having a low propensity to use credit.
Finally, the appliance-expenditure groups
were dissolved, as the two high-propensity
subgroups were combined and the two low­propensity
subgroups were combined to form
two new categories of high-propensity house­holds
and low-propensity households.
Results
Households with a high propensity (HP) to
use credit were at a lower economic level than
households with a low propensity (LP) to use
credit. HP households reported a lower income
and spent fewer dollars on appliances than LP
households; nevertheless, HP households spent
more of those dollars on credit purchases
(table 1).
Further evidence that HP households were at
a lower economic level than LP households was
provided by two measures of economic well­being
adapted by researchers at FERG.3 The
first and most comprehensive measure, based
on the work of James N. Morgan, was derived
from data on family income, size, composition,
and labor force participation. The second
measure, based on the uniform poverty index
developed by Mollie Orshansky and others,
assessed the relationship of available income to
income needs. With both measures, the lower
index score indicates the lower level of eco­nomic
well-being. HP households averaged
lower and significantly different scores than LP
households on both the Morgan-based and the
Orshansky-based measures. The Orshansky­based
measure also indicated that HP house­holds
were twice as likely as LP households to
have lived below the poverty level.
Demographic characteristics may further
explain some differences in income and eco­nomic
well-being between households with
3 Schwenk, Frankie N ., and Colien Hefferan, Family
well-being: Subjective measures from objective data,
paper presented at the American Home Economics
Association Annual M,eeting, Atlantic City, N.J.,
June 25, 1981.
FAMILY ECONOMICS REVIEW
high and low propensities to use credit. The
majority of household heads in both groups
were employed in lower paying occupations
(such as clerical, sales, crafts, and skilled and
unskilled labor; however, heads of HP house­holds
were less likely than those of LP house­holds
to be employed in higher paying profes­sional,
managerial, and technical positions.
Since occupational attainments are often
related to educational achievement, it was not
surprising to find that heads of HP households
were less educated than heads of LP house­holds.
When data on age of household head were
analyzed in conjunction with data on house­hold
type, the effect of household life cycle
was evident. Although most household heads
were married, heads of LP households were
more likely than those of HP households to
be married (table 2). As expected, younger
household heads at both propensity levels
were more likely than older household heads
to be married and have children. Although the
addition of children to the household may
increase the household's demand for appliances
and further strain the household's income and
cause increased levels of credit use, husband
and wife LP households were more likely than
husband and wife HP households to have
children. This finding is contrary to results of
much previous credit research but is supported
by the findings of Ryan and Maynes ( 7), who
studied the excessively indebted and founded
that "families with children are those least
likely to be in trouble due to installment debt."
A greater proportion of HP households
than LP households purchased appliances on
credit, and HP households averaged a higher
credit expenditure per category of appliances.
When appliance categories were arranged
according to the frequency of credit purchases,
the patterns of HP and LP households were
identical with one exception: HP households
were more likely to purchase large kitchen
appliances than personal care appliances,
whereas LP households demonstrated the
opposite tendency. In a discretionary cate­gory
of appliances that includes television
and sound equipment, HP and LP households
differed significantly in their likelihood to
purchase on credit. HP households were al­most
twice as likely as LP households to
purchase these items on credit.
In general, LP households were more likely
to purchase household appliances on 30-day
credit than on installment credit. This decision
to contract for short-term credit may indicate
that LP households use credit as a convenience
Table 1. Economic characteristics of households
by their propensity to use credit
Households with-
Char acteristic1
Credit propensity ..... .. . . .. . .. . . .. .... · .percent · · · · · ·
Appliance expenditure . . ... .. ......... .. ... dollars · · · · · ·
Credit expenditure for household appliances .... . .... · do · · · · · ·
Annual disposable income . ... . ..... . ...... · · · · · do · · · · · ·
Indexes of well-being :
Morgan-based measure . . . . . .. · · · · · · · · · · · · · · · · · · · · · · ·
Orshansky-based measure ... . . · · · · · · · · · · · · · · · · · · · · · · ·
Living below poverty level. .... .. ...... · · · · · .percent · · · · · ·
High propensity
to use credit
78
1,318
1,001
9,695
112
315
8
1 . All f1gures are average scores •th the ex ception of the percentage living below poverty level. WI
FALL 1981
Low propensity
to use credit
25
1,351
330
12,653
124
374
4
5
Table 2. Percentage of households with high propensity to use credit (HP) and low propensity
to use credit (LP) by age of head and marital status
Head younger than 45 years old Head 45 years or older
Marital status
HP households
Married ......... . ........ 78
No children ......... . .. . 12
Children ••• • 0 •• • •• •••• • 66
Oldest under 6 years ... . . 23
Oldest 6-17 years . ....... 37
Oldest over 17 years. . . . . . 6
Not married .... .. .. . . . . ... 21
No children . . .... . .. .. .. 11
Children • •• 0 0 0 0 •• • 0 •• •• 10
measure rather than as a means of stretching
limited financial resources. In contrast, HP
households tended to rely on installment
credit that allowed them to pay for the appli­ance
over time with specified payments. The
use of installment credit may indicate that
HP households had limited financial resources
and were unable to pay for the appliance at
or soon after the time of purchase.
High levels of credit use may indicate dif­ferent
financial preferences on the part of
debtors. Many households may choose to use
credit as a matter of convenience or may bor­row
funds to keep financial reserves in high­interest-
bearing accounts or certificates of
deposit. Market conditions such as rapidly
rising inflation and longer maturity period
on consumer loans may encourage house­holds
to assume more debt. For some house­holds,
however, high levels of credit use
may signal a loss of control over household
finances. In contrast to those that use credit
as a convenience, these households may have
accumulated more debt than they are able
to handle.
REFERENCES
1. Awh, Robert Y., and D. Waters. 1974.
6
Discriminant analysis of economic, de­mographic
and attitudinal characteristics
of bank charge card holders: A case study.
Journal of Finance 29 : 973-980.
LP households HP households LP households
85 70 80
15 30 27
70 40 53
21 1 1
41 11 15
8 28 37
15 30 19
9 19 12
6 11 7
2. Board of Governors of the Federal Reserve
System, Division of Research and Statis­tics.
1981. Flow of Funds Accounts, 1st
Quarter 1981-8easonally Adjusted and
Unadjusted, Z.1, pp. 6-7.
3. Durkin, Thomas A., and Gregory E. Ellie­hausen.
1978. 1977 Consumer Credit
Survey. Board of Governors of the Fed­eral
Reserve System, Washington, D.C.
4. Hendricks, Gary, and Kenwood C. You­mans
with Janet Keller. 1973. Consumer
Durables and Installment Debt: A Study
of American Households. Institute for
Social Research, Ann Arbor, Michigan.
5. Katona, George, Lewis Mandell, and Jay
Schmiedeskamp. 1971. 1970 Survey of
Consumer Finances. Institute for Social
Research, Ann Arbor, Michigan.
6. Mandell, Lewis, George Katona, James N.
Morgan, and Jay Schmiedeskamp. 1973.
Surveys of Consumers 19 71-72-Gontri­butions
to Behavioral Economics. Insti­tute
for Social Research, Ann Arbor,
Michigan.
7. Ryan, Mary E., and E. Scott Maynes. 1969.
The excessively indebted-who and why.
Journal of Consumer Affairs, winter issue,
pp. 107-126.
8. Steinberg, Edward I. 1981. Consumer credit,
1960-1980. Survey of Current Business
61(2):14-18. U.S. Department of Com­merce,
Bureau of Economic Analysis.
FAMILY ECONOMICS REVIEW
THRIFTY FOOD PLAN
The adequacy of the USDA's thrifty food plan as a standard for benefits for the Food
Stamp Program is currently under review. Printed below are excerpts from testimony
pres~n:ed before :he Subcommittee on Domestic Marketing, Consumer Relations, and
Nutntwn; Committee on Agriculture; House of Representatives; which describes the
thrifty food plan (TFP), how it was developed, how costs are estimated and how the
TFP varies f~om fo~d:consumption patterns. It was presented on March' 18, 1981, by
Robert L. R1zek, Drrector, Consumer Nutrition Center, Human Nutrition Science and
Education Administration. '
The thrifty food plan (TFP), developed by
USDA in 1975, is the least costly of the four
USDA family food plans. It was adopted as
the basis for the coupon allotment for the
Food Stamp Program, effective January 1976
(Federal Register, Vol. 40, No. 231-Monday,
December 1, 1975) and incorporated into the
Food Stamp Act of 1977, Public Law 95-113,
approved 9/29/77.
The TFP is a research-based set of econom­ical
and nutritious diets that reflect insofar as
possible, food choices of households with
limited food budgets. The TFP is an assort­ment
of foods that represents as little change
from average food consumption of persons
in U.S. households with relatively low food
costs as was required to provide a nutritious
diet while controlling costs. The TFP specifies
the amounts of foods of different types (food
groups) that households might buy, or obtain
from other sources, to provide nutritious
meals and snacks for household members.
In the plan, amounts of food groups are sug­gested
for men, women, and children of dif­ferent
ages and for pregnant and nursing
women (table 1). A plan for any household
can be determined by totaling the amounts
suggested for persons of the sex and age of
household members.
A four-person household-a man, woman,
and children 6-8 and 9-11 years of age-is
used by the Department in setting food stamp
allotments. This is not a typical food stamp
household. USDA studies have shown that
allotments based on this four-person house­hold
exceed the sex-age-specific TFP cost
for 75 percent of food stamp households.
Households following the TFP may choose
from the food groups those foods they enjoy
FALL 1981
eating. Since the TFP is based on average
consumption patterns, not all foods in it are
economical. A food list for a family of four
for a month (table 2) illustrates the kinds and
amounts of food used in estimating the cost
for the plan. In this illustration, the plan
provides 23 pounds of red meat and 7 pounds
of poultry, despite the fact that chicken is
a more economical source of protein than
most types of red meat.
Sample menus for a week (table 3) show
how foods in the TFP can be combined into
appetizing and nutritious meals. The meals
are not expected to suit any family entirely.
However, they can be prepared from foods
typical of those used by survey households
operating on low budgets. These foods are
generally available in stores across the coun­try.
The amounts of foods in the sample
menus that are served to family members
will differ depending on individual food
needs. For example, at a meal, young chil­dren
may eat % cup of vegetables and teen­agers,
% cup. Generally, servings of bread
and cereals are generous and servings of meat,
poultry, and fish are small. Meals for a day
for a man following the TFP, on the average,
contain about 1% cups of milk, 4 to 5 ounces
of cooked lean meat or alternate such as egg
or legumes, 3 to 4 servings of vegetables and
fruit, and 7 or more servings of cereal, pasta,
and bread and other bakery products.
How TFP Was Developed
Data from the USDA Household Food Con­sumption
Survey 1965-66, the most recent
such data available when the plan was de­veloped,
were used to develop the TFP. In
7
00
Table 1. Thrifty food plan: Amounts of food for a week1
Meat and alternates Vegetable and fruit group Bread and cereal group2 Other foods
Milk group group group
Family member
Milk, Meat, Dry beans Dark-green, Citrus Other Other
cheese, poultry, Eggs and peas, deep-yellow fruit,
Pota- vegetables, Cereal Flour Bread bakery
Fats, Sugar,
oils sweets
ice cream3 fish4 nuts5 vegetables tomatoes
toes fruit products
Qt Lb No Lb Lb Lb Lb Lb Lb Lb Lb Lb Lb Lb
Child:
7 months to 1 year 5.0 0.39 1.2 0.15 0.41 0.55 0.09 2.49 6 1.02 0.02 0.08 0.04 0.04 0.19
1-2 years ..... ... 3.3 .83 3.3 .17 .22 .89 .65 2.26 6 1.02 .31 .78 .24 .11 .30
3-5 years ........ 3.5 .95 2.5 .28 .20 .92 .88 2.28 1.03 .37 .94 .53 .38 .74
6-8 years ........ 4.2 1.27 2.4 .49 .22 1.10 1.23 2.50 1.12 .62 1.42 .79 .51 .94
9-11 years ....... 4.9 1.61 3.4 .53 .28 1.52 1.48 3.38 1.34 .81 1.82 1.10 .60 1.20
Male:
12-14 years ...... 5.2 1.79 3.6 .67 .33 1.45 1.59 3.30 1.22 .81 2.07 1.13 .77 1.21
15-19 years ...... 5.1 2.35 4.0 .43 .32 1.70 2.10 3.43 .98 .99 2.36 1.46 1.00 1.05
20-54 years . . . . . . 2.6 3.03 4.0 .44 .39 1.80 2.02 3.69 .89 .92 2.29 1.33 .95 .86
55 years and over . . 2.4 2.45 4.0 .25 .51 1.85 1.75 3.77 1.09 .80 1.90 1.12 .79 .94
Female:
12-19 years ...... 5.4 1.80 3.8 .28 .42 1.74 1.22 3.61 .72 .76 1.49 .84 .51 .74
20-54 years ...... 2.8 2.41 4.0 .27 .52 1.86 1.51 3.39 .90 .67 1.41 .67 .57 .57
55 years and over .. 2.8 1.84 4.0 .19 .60 2.02 1.26 3.73 1.12 .68 1.30 .58 .37 .45
Pregnant .... ... . 7 5.2 2.69 4.0 .42 .56 2.17 1.89 4.03 1.13 .58 1.41 .66 .59 .58
Nursing ......... 7 5.2 3.00 4.0 .38 .57 2.36 1.92 4.27 .98 .63 1.56 .82 .80 .75
'"%j
1 Amounts are for food as purchased or brought into > the kitchen from garden or farm. Amounts allow for about 5 percent of the edible food as discard due
.~..... to plate waste, spoilage, and the like. For general use, round the total amount of food groups for the family to the nearest tenth or quarter of a pound. In
t"' addition to groups shown, most families use some other foods: Coffee, tea, cocoa, soft drinks, punches, ades, leavening agents, and seasonings. ><
t:j
2 Unenriched, refined bread, cereals, and flour are counted as "other foods" in the daily food guide.
~ 3Fluid milk and beverage made from dry or evaporated milk. Cheese and ice cream may replace some milk. Count as equivalent to a quart of fluid milk:
0 z Natural or processed Cheddar-type cheese, 6 ounces; cottage cheese, 2-1/2 pounds; ice cream or ice milk, 1-1/2 quarts; unflavored yogurt, 4 cups.
0 4Bacon and salt pork should not exceed 1/3 pound for each 5 pounds of this group.
.~..... 5Weight in terms of dry beans and peas, shelled nuts, and peanut butter. Count 1 pound of canned dry beans, such as pork and beans and kidney beans, as
~ 1/3 pound. 00
::0 6 Cereal fortified with iron is recommended.
t:j 7 For pregnant and nursing teenagers, 7 quarts is recommended. .<....:.
t:j
~
Table 2. Food list for a month based on the thrifty food plan for an
average 4-person household receiving food stamps
Foods
Milk (includes nonfat
dry milk) ............... .
Cheese ................... .
Ice cream ................. .
Beef .................... .
Pork ..... . .............. .
Variety meat
Poultry ....
Fish .... . . .............. .
Eggs .... .. .
Dry beans ...
Mature beans, canned ......... .
Peanut butter .............. .
Carrots . ................. .
Dark-green leafy vegetables .. . .. .
Other dark-green and
deep-yellow vegetables .....
Citrus fruit or juice ......... . .
Tomatoes, tomato products. . . ...
Potatoes ....... . ..........
Apples .. ••••••••••••••••• 0
Bananas .................. .
Other fresh fruit ............ .
Amount
54 qt
4-3/4 lb
6 qt
13 lb
6-1/2 lb
3-1/2 lb
7lb
2lb
5 doz
2-1/2 lb
4lb
2-1/2 lb
3 lb
2lb
1-1/2 lb
17 lb
9lb
24lb
8-1/2lb
5lb
8-1/2 lb
Foods
Fruit, canned . . . . . . . . . . . ....
Fruit juice, canned ........ ... .
Lettuce, salad greens ......... .
Cabbage ..... ..... ........ .
Other fresh vegetables . . . . . . . . .
Snapbeans, canned ........... .
Green peas, canned ....
Other canned and frozen
vegetables, vegetable soup .....
Flour and mixes ............ .
Cornmeal ................. .
Rice or pasta . . . . . . . . . .
Ready-to-eat cereal,
other cereal . . . ..
Bread ................... .
Crackers .. . ....... .
Other bakery products;
soups, mainly rice or pasta
Margarine, butter ............ .
Shortening, oil or
salad dressing . . . . . . . . . . .
Sugar ..... .... .......... .
Other sweets. . . . . . . . . . . .....
Amount
5-1/2 lb
2-1/2 lb
4lb
2-1/2 lb
7-1/2lb
2lb
2lb
7 lb
12lb
3 lb
6lb
8lb
26lb
2-1/2 lb
11-1/2 lb
5 lb
5lb
8 lb
5-1/2 lb
NOTE: Provides for the average food needs (as suggested in the thrifty food plan for men, women, and children
of different ages) of 4-person households receiving food stamps. National Survey of Food Stamp and Food Distri­bution
Program Recipients, November 1973. In addition to foods listed, most families use some other foods:
Coffee, tea, cocoa, soft drinks, punches, ades, leavening agents, and seasonings. Approximately 5 percent above the
cost of the foods on the list is allowed for purchase of these foods when costs for the plan are estimated.
9
FALL 1981
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Table 3. A week's menus based on the thrifty food plan
SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY
B Orange juice Orange juice Peaches, sliced Orange juice Peaches, sliced Apple juice
R French toast Ready-to-eat cereal Grits Eggs Ready-to-eat cereal Farina
E Sirup Toast Cinnamon toast Pan-fried potatoes Toast Toast
A Beverage Beverage Beverage Toast Beverage Beverage
K Beverage
F
A
s
T
Beef pot roast Grilled cheese Frankfurters Beef macaroni soup Noodle soup Frankfurter bean
L Gravy Sandwiches Sauerkraut Saltine crackers Peanut butter and soup
u Mashed potatoes Macaroni salad Bread Plums jelly sandwiches Saltine crackers
N Mixed vegetables Baked apples Oatmeal cookies Beverage Carrot sticks Oatmeal cookies
c Bread Beverage Beverage Graham crackers Beverage
H Ice milk Beverage
Beverage
Beans in tomato Beef stew with Beef pie with Fried chicken Beef patties Cheese rare.bit on
D sauce vegetables vegetables Rice Baked potatoes toast
I Macaroni salad Cornbread Refrigerator Gravy Stewed tomatoes French-fried
N Pear halves Ice milk biscuits Corn Muffins potatoes
N Cornbread Beverage Lettuce wedges Bread Ice milk Collards
E Gelatin with dressing Peanut butter cake Beverage Meringue pie
R Beverage Peanut butter cake Beverage Beverage
Beverage
s Ready-to-eat Bread and jelly Cheese and Ready-to-eat cereal Peanut butter cake Graham crackers
N cereal sandwiches saltine crackers
A
c
K
Note: Milk for everyone at least once daily, and for children, teenagers, and pregnant and nursing women, more often.
Spreads for bread and sugar for cereal, coffee, and tea may be added if desired.
SATURDAY
Apples, quartered
Pancakes
Sirup
Beverage
Cheese sandwiches
Gelatin (with
apple juice and
celery)
Meringue pie
Beverage
Spaghetti with meat
sauce
Tossed salad
(lettuce, carrots,
dressing)
Bread sticks
Ice milk
Beverage
Ready-to-eat cereal
developing the plan, minimal changes in
average consumption patterns required to
meet nutritional and cost constraints were
systematically identified by use of a quadratic
programing model. Generally, changes were
reductions in quantities of meat, poultry, and
fish, fruit, and vegetables (other than pota­toes),
and increases in quantities of potatoes,
dry beans, and grain products. Figure 1 shows
how food in the TFP compares with average
food consumption patterns for a four-person
household from a more recent survey con­ducted
in spring 1977.
Nutritive Value of TFP
The TFP provides for nutritious diets. It
was designed in 197 5 to provide the Rec­ommended
Dietary Allowances (RDA) set
in 1974 by the National Academy of Sciences­National
Research Council (NAS-NRC) for
protein, calcium, iron, magnesium, vitamin A,
thiamin, riboflavin, niacin, vitamin B6 , vitamin
B 1 2 , and vitamin C. To meet their iron al­lowances,
young children, teenage girls, and
women of childbearing age will need to select
frequently foods that provide important
amounts of iron, such as liver, heart, kidney,
economical lean meats, dry beans, dry peas,
dark-green vegetables, dried fruits, cereals
with added iron, and molasses. Such special
selections are also necessary for meeting al­lowances
for iron in the more expensive food
plans. Levels of vitamin B6 and magnesium
in the TFP for a few sex-age categories were
below the RDA but above levels in usual
consumption patterns.
Estimates were not made of levels provided
by the plan of some nutrients for which there
are allowances. Phosphorus levels were not
calculated but are known to be well above
the allowances in most U.S. diets. The use
of iodized salt is recommended as an effi­cient
way to supplement dietary iodine. The
requirement for vitamin D for normal persons
can be met by exposure to sunlight. How­ever,
for infants and elderly persons whose
activities limit their exposure to sunlight,
the allowance should be provided in the diet
by such foods as eggs, liver, butter, and milk
Thrifty Food Plan Compared with Food Consumption
Dairy products
Meat, fish.
poultry
Eggs
Legumes, nuts
Potatoes
Cereal, flour
Bread
Other bakery
Fats, oils
Sugar, sweets
%Below
Average
Consumption
Food plan and food consumption for 4-person family
USDA Nationwide Food Consumption Survey, Spnng 1977. 48 states
Figure 1
FALL 1981
% Above
11
fortified with vitamin D or by supplementa­tion.
Insufficient reliable information was
available on the content in foods of three
other nutrients for which allowances were
set in 197 4-vitamin E, folacin, and zinc­to
make reliable estimates of levels provided
by the plans.
A TFP developed to meet the RDA would
be expected to provide generous amounts of
nutrients for most persons. The NAS-NRC
states that the basis for the RDA is such that
"even if a person habitually consumes less
than the recommended amounts of some
nutrients, his diet is not necessarily inade­quate
for those nutrients." Although USDA
uses the RDA as a standard in developing
food plans, it recognizes that failing to meet
the RDA does not imply dietary inadequacy.
This is fortunate, because nationwide studies
show that very few people-rich or poor-­have
diets every day that meet the RDA for
all nutrients. These studies also show that
average calorie intakes for sex-age categories
are as much as 25 percent below the RDA
for energy; yet obesity continues to be a
national problem.
Fat provides 30-39 percent of energy in
the TFP, depending on the sex-age category.
Sugars, other than found naturally in foods,
in the plan provide 12 to 16 percent of en­ergy-
less than levels in consumption pat­terns
used as the basis for the plan. Cholesterol
levels do not exceed 350 mg per day.
Allowance for Food Waste
In developing the plan, the RDA were
increased by 5 percent to allow for some dis­card
of edible food without jeopardizing the
nutritional quality of the diet. {The discard
of inedible parts of food, such as excessive
fat and drippings from meat and poultry,
peelings and bone, and losses of vitamins
in cooking, is allowed for in the nutritive
values used.) Allowance for edible discard
is believed necessary because some edible
food is discarded in most homes in the prep­aration
of food, as plate waste, or due to
spoilage. Household discard of edible food
of 5-11 percent has been estimated from
admittedly inconclusive studies of food waste
by USDA and the University of Arizona ....
12
How TFP Costs Are Estimated
U.S. average costs of foods in the TFP for
individuals in each of the 14 sex-age categories
and for selected families are estimated by the
Consumer Nutrition Center each month and
released by USDA. (Costs for the other three
plans-low-cost, moderate-cost, and liberal­are
also estimated.) Average prices paid for
almost 2,000 foods by survey households
with relatively low food costs are used as
basis for the TFP estimates. Such prices re­flect
the assortment of food container sizes
and brands, quality of food selected, and
price levels of stores of purchase for families
who use food at relatively low cost. Prices
are updated monthly using the Bureau of
Labor Statistics' Consumer Price Index for
the most detailed food groupings.
The September 1980 cost for foods in the
TFP for the four-person household ($233
per month) is the basis for the food stamp
allotment for four-person households with
no income (effective for the 1981 calendar
year, in accordance with the Food Stamp
Act Amendments of 1980). For smaller and
larger households, the maximum allotment
is adjusted for the number of household
members and for economies associated with
buying and using food in large households
relative to small ones.
Many households, whether or not they
are eligible for food stamps, do not select
nutritious assortments of food. Receipt of
enough food stamps to buy the TFP, of course,
will not assure that the recipient gets a nutri­tious
diet. Food stamp recipients may not
use their stamps to purchase foods as sug­gested
in the TFP. They may make more or
less economical and nutritious choices than
those in the plan.
The TFP is but one of many combinations
of foods that could be developed at extremely
low cost. Amounts of food groups in consump­tion
patterns could be changed in other ways
to provide nutritious diets. While such combi­nations
would deviate further than the thrifty
plan from food consumption patterns as
reported in 1965-66, they might be as accept­able
as the TFP to some households. Other
plans at the same or lower cost than the TFP
could be developed if selections of foods
within food groups were limited to only those
foods which are less expensive, rather than
FAMILY ECONOMICS REVIEW
selections typical of those in survey house­holds.
However, for purposes of estimating
the nutritive value and the cost of a plan for
use nationwide, average selections of foods
in food groups based on those made by sur­vey
families with relatively low food costs
have been used.
TFP Costs and the Cost and Quality of
U.S. Diets
The Nationwide Food Consumption Sur­vey
1977-78 provides information that shows
that some households spend at levels below
the maximum food stamp allotment level
based on the cost of the TFP. It also shows
that some households spending at the maxi­mum
allotment level used food that provides
the RDA for 11 nutrients studied.
The TFP was developed at a cost level below
which 10 percent of U.S. households spent
in 1965-66. In 1977-78, of over 14,000 U.S.
households surveyed, 11.6 percent used food
at home during the survey week valued at less
than the maximum food stamp allotment for
a household of that size.
The nutritive value of household diets was
estimated and compared to the 1974 RDA
for 11 nutrients. (This is but one of several
measures of nutritional quality of household
diets that might be used.) Of households using
food valued at the full food-stamp-allotment
level, 9 percent used food that met the RDA
for 11 nutrients and 33 percent used food
that met 80 percent or more of the RDA for
11 nutrients ....
Since the TFP was developed in 1975, new
information has become available on food con­sumption
and food prices of households
(Nationwide Food Consumption Survey 1977-
78), on nutritional goals (1980 Recommended
Dietary Allowances and other dietary stan­dards),
and on the content of several additional
nutrients in an increasing number of foods.
USDA is now using this new information to
evaluate and revise the thrifty food plan as well
as the other more costly plans.
FINAL REPORT OF PRESIDENT'S COMMISSION
ON PENSION POLICV1
An article in the Spring 1981 issue of Family
Economics Review2 included a discussion of
concerns related to the Nation's retirement,
survivor, and disability systems that were
being considered by the President's Commis­sion
on Pension Policy. The Commission,
established by President Jimmy Carter, has
now made final recommendations in the
report Coming of Age: Toward a National
Retirement Policy. The Commission believes
a desirable goal for retirement income is the
complete replacement of preretirement dis-
1 A copy of the complete report, Coming of Age,
Toward a National Retirement Income Policy, 1981,
is available from the Superintendent of Documents,
U.S. Government Printing Office, Washington, D.C.
20402, for $5.50. Ask for Stock No. 040-000-00450-5.
2 Schwenk, Frankie N., 1980, Pensions, Family
Economics Review, pp. 8-13, Spring issue, U.S. Dep~t­ment
of Agriculture, Agricultural Research Serv1ce.
FALL 1981
posable income. The proposals for attainment
of this goal include recommendations for a
long-term shifting from dependency on pay­as-
you-go financed Federal programs--such as
social security, welfare, and in-kind benefit
programs-to a strengthened and balanced
program of employee pensions, social security,
and individual efforts.
Employee pensions. The Commission rec­ommends
a Minimum Universal Pension
System (MUPS). The proposed system would
be established for all workers and funded by
employer contributions. All employees over
the age of 25 having 1 year of service and
1,000 hours of employment with their em­ployer
would be eligible, with vesting of bene­fits
beginning immediately. The MUPS bene­fit
would supplement social security benefits
and could not be integrated with social secu­rity.
One major concern of the Commission
13
was the need for portability; that is, the carry­ing
of pension rights from job to job. The pro­posed
MUPS would have portable benefits and
would establish a clearinghouse for benefit
records in the Social Security Administration.
Two additional concerns considered by the
Commission were (1) the tendency of workers
to "cash-out" or take funds out of pension
funds when they left jobs, thereby reducing
later security, and (2) the lack of benefits for
some spouses. The final report addresses these
concerns by recommending that all cash-outs
of pension benefits over $500 be prohibited
unless transferred to an IRA (Individual Re­tirement
Account) or the plan of a subsequent
employer. In regard to spouse benefits, the
report recommends that postretirement sur­vivor
protection under the pension plan should
be mandatory unless a waiver is signed jointly,
with each spouse bieng a willing and knowl­edgeable
signatory. Similarly, the survivor
option should be provided automatically to
the survivors of workers who die in the 10-year
period prior to normal retirement age. The
pension entitlement earned during the marriage
should be divisible in separation or divorce.
Social security. To strengthen the social
security component of retirement income, the
Commission recommends mandatory universal
social security coverage. Specifically, it rec­ommends
extending social security coverage
to all new workers who otherwise would not
be covered. The Commission believes that
individuals who are already retired and workers
eligible for immediate retirement should not
be affected by any modification of a pension
system caused by coordination with social
security coverage. Social security should not
replace an existing pension system for workers
who are not covered by social security. Rather,
an existing system should be modified to take
into account benefits available under social
security. To help solve the longrun financing
problem in the current social security system,
an increase in the normal retirement age from
65 to 68 should be phased in over a 12-year
period beginning in the year 1990. Pension
14
plans should be allowed to increase their nor­mal
retirement age in tandem with social
security. The Commission recommends that
upon divorce the shared earnings concept be
used; that is, the annual earnings for each year
of marriage would be divided equally. Upon
death of the social security participant, the
survivors would inherit the earnings credit of
their spouses. The shared earnings concept
is not recommended for disability.
The Commission also recommends that tax
treatment on social security should be changed
so that at the time of filing the employee
would take a tax deduction or tax credit for
his or her contribution. Taxes would be paid
when social security benefits are received. As
this is phased in, the social security earning
test would be phased out.
Individual efforts. To increase individual
savings, favorable tax treatment should be
extended to include employee contributions
to pension plans. A refundable tax credit also
is recommended for low- and moderate-income
people to encourage voluntary individual
retirement savings and employee contributions
to plans.
Alternative work patterns for older workers
should be encouraged and developed through
research and demonstration programs in exist­ing
Federal employment programs. Job retrain­ing
and job redesign for older workers in
private industry also should be encouraged.
To provide inflation protection for retire­ment
income, the Commission recommends
that the Bureau of Labor Statistics develop
a separate cost-of-living index for the retired.
Until a new index is developed for the retired,
Federal pensions should be adjusted on the
basis of average Federal wage increases or the
Consumer Price Index, whichever is lower.
As a long-term goal, inflation adjustment
for employee pensions should be encouraged
through tax policy but, in the short term, is
not recommended since emphasis should be
placed on expanding pension coverage to more
people rather than providing full inflation
protection to some.
FAMILY ECONOMICS REVIEW
PERSPECTIVES ON WORKING WOMEN: A DATABOOK
In June 1980, nearly 45 million women­more
than half of all women 16 years of age
and older--were in the labor force. These
women made up 43 percent of the work force
compared with 32 percent in 1955. The
number of children with mothers in the labor
force also increased since 1955, reaching 30.1
million in March 1979. These trends and
others are featured in the newly revised pub­lication,
Perspectives on Working Women:
A Databook, released by the U.S. Department
of Labor's Bureau of Labor Statistics. This
databook, designed to serve as a general re-source
for everyone interested in the role
of women in the U.S. economy, includes 100
tables containing information on women's
participation, employment, and unemploy­ment
in the labor force; extent of work ex­perience;
marital and family status; school
enrollment and education; earnings and in­come;
race and Hispanic origin; and other
selected topics. Copies of the databook, Bul­letin
2080, are for sale for $4.50 by the Super­intendent
of Documents, U.S. Government
Printing Office, Washington, D.C. 20402.
Ask for GPO No. 029-001-02527-1.
CHILD SUPPORT AND ALIMONY: 1978
Child Support
In 1978, 7.1 million women had one or
more children under 21 years of age who were
members of the household but whose father
was not. Of these women, 48 percent were
awarded and entitled to child support pay­ments
in 1978, 41 percent were not awarded
payments, and 11 percent were awar?ed pay­ments
but were not entitled to receive them
because of reasons such as death of the former
spouse or children reaching age eligibility
limits.
Of the women entitled to child support pay-ments
in 1978 only about three-quarters
received them (about one-half received f~ll
payment while one-quarter received partial
payment). Child support payments that women
received averaged $1,800 and repr~sented
one-fifth of the women's total money mcome
of $8 940. This was considerably higher than
the av' erage income of women w h o w~r e en-titled
to child support payments but did not
receive them ($6,220) and women who were
not awarded child support ($4,860). .
Two-thirds of the women entitled to child
support payments had court-ordered agree­ments
and almost one-third had voluntary
'
FALL 1981
written agreements. The voluntary written
agreement was more effective than the court­ordered
agreement. Of all women who had
voluntary agreements, 68 percent were paid
in full, 20 percent received partial payment,
and 12 percent failed to receive payment.
This compares with 40, 24, and 36 percent,
respectively, for women with court-ordered
agreements. The average child su?port pay­ment
received under voluntary wntten agree­ments
was $1,690, which. was 50 percent
greater than the average payment ($1,090)
received by women with court-ordered agree­ments.
Of all women entitled to child support
payments, 1 in 6 lived below the pove~y level;
only three-fifths of these women received pay­ments.
The average child support payment to
women in poverty was $1,220, which repre­sented
one-third of their total money income
of $3,540. Never-married women living below
the poverty level were less likely than others
to be awarded child support payments. For
women in poverty, neither recipiency nor
amount of child support payments differed
significantly by race, Spanish origin, or edu­cation.
15
The proportion of women rece1vmg child
support payments and the average amount
received varied by demographic characteris­tics
(see table). Only 11 percent of never­married
women were awarded child support
payments, compared with 71 percent of other
women. The low percentage of never-married
women awarded payments may be due to
the difficulty in establishing paternity. Once
pay~ents were awarded, however, never­married
women were just as likely as other
women to receive payment, although they
received the lowest average payment. White
women were more likely than black women
or women of Spanish origin to be awarded
child support payments. Race and Spanish
origin did not seem to be factors in the re­cipiency
of awarded child support payments
but seemed to affect the amounts received
as white women received a higher payment
than did black or Spanish-origin women.
Women who did not complete high school
were less likely than women with higher
educational attainments to be awarded child
support payments. Not only did the more
educated women receive higher child support
payments than their less educated counter­parts,
but they also reported higher total
money incomes. This may be due to the
positive correlation between the educational
levels of husbands and wives. Since educated
husbands are more likely than uneducated
husbands to have a high income, they are
better able to afford child support payments.
Higher educated women also may be more
effective in using the legal system to obtain
and assure receipt of support payments.
Older women were more likely than younger
women to be awarded child support pay­~
ents. Although age did not affect the recip­Iency
of awarded payments, it was positively
associated with the amount received. The
number of children from an absent father
did not affect recipiency of payments; how­ever,
the average child support payment in­creased
with the number of children.
16
Alimony
Of the 14.3 million ever-divorced or sep­arated
women in 1978, only about 2 million
(14 pet) were awarded alimony or maintenance
payments or had an agreement to receive
the~. Of these women, about 760,000 were
entitled to payments in 1978. Approximately
two-thirds (69 pet) of the women entitled
to payments actually received them, with an
average payment of $2,850. The mean total
money income for women receiving payments
($11,060) was higher than that for women
due payments but not receiving them ($7,270).
The percentage of women who were
awarded alimony or maintenance payments
or had an agreement to receive them showed
little variation by selected characteristics.
The most pronounced difference in the likeli­hood
of alimony payments awarded was
between white women (16 pet) and black
women (7 pet). Approximately 13 percent
of Spanish-origin women were awarded pay­ments,
not significantly different from the
percentage of all women.
Rec~piency for women entitled to alimony
or mruntenance payments in 1978 also varied
little according to selected demographic and
economic characteristics. The likelihood of
white women receiving payments was not
significantly different from that of black
women or women of Spanish origin. Age,
work status, years of schooling, .and presence
of own children had little apparent effect
on recipiency. However, women who were
divorced or separated during the 1975-78
period were more likely to receive payments
( 84 pet) than those divorced or separated
before 1975 (54 pet).
Source : U.S. Department of Commerce, Bureau
of the Census, 1980, Child support and alimony:
1978 (advance report), Current Population Reports
Special Studies, Series P-23, No. 106. '
FAMILY ECONOMICS REVIEW
Women with ~hildren present under 21 years of age from an absent father:1
Child support payments awarded and received in 1978
Entitled to receive child support in 19782
Characteristics
of women
Number
of
women
Awarded
child
support
payments
Number
of
women2
Actually received
child support
Total
Mean
child
support
Mean
total
money
income
Thousands Percent Thousands Percent ------Dollars--------
All women .................... .
Current marital status
Married3 ..................... .
Divorced .................... . .
Separated .................... .
Widowed4 ...................•.
Never married . . . . . . . . ... ... ... .
Race and Spanish origin
White ....................... .
Black ....................... .
Spanish origin6 .......... .. .... .
Years of school completed
Less than 12 years . . . . . . . . . .. ... .
High school: 4 years . . . . . . . . . . .. .
College:
1-3 years ................... .
4 years or more . . . . . . . . . . . . . . .
Age
18-29 years ................... .
30-39 years ................... .
40 years and over ............... .
Number of children
1 child ...................... .
2 children .................... .
3 children .................... .
4 children or more . . . . . . . .... ... .
7,094
2,006
2,390
1,257
67
1,374
5,085
1,895
521
2,365
3,157
1,117
455
2,585
2,654
1,854
3,627
2,100
830
537
59.1
77.1
79.8
45.1
(5)
10.6
70.7
28.8
43.8
46.3
63.7
68.6
71.0
46.0
67.4
65.6
55.2
65.4
61.8
57.2
3,424
1,145
1,693
463
16
107
2,973
413
191
870
1,650
629
274
1,024
1,506
894
1,560
1,185
426
253
71.7
68.3
73.3
72.6
(5)
81.3
72.9
63.0
65.4
61.4
72.9
76.6
85.8
69.2
73.4
71.6
70.3
74.3
69.7
71.5
1,799
1,602
1,951
1,906
(5)
976
1,861
1,294
1,318
1,503
1,664
2,089
2,574
1,286
1,876
2,236
1,288
1,995
2,528
2,752
8,944
7,187
10,582
8,177
(5)
4,522
9,183
7,271
6,922
6,611
7,937
10,395
16,439
6,927
9,135
10,853
8,507
9,168
9,710
9,252
1 As of March 1979.
2Excludes those women who were awarded payments but were not entitled to receive them because of reasons
such as the death of the former spouse or the children reaching age eligibility limits.
a Remarried women whose previous marriage ended in divorce.
4Widowed women whose previous marriage ended in divorce.
5 Base less than 75,000.
6Persons of Spanish origin may be of any race.
Source: U.S. Dpeartment of Commerce, Bureau of the Census, 1980, Child support and alimony: 1978 (advance
report), Current Population Reports, Special Studies, Series P-23, No. 106.
17
FALL 1981
URBAN FAMILY BUDGETS-AUTUMN 1980
The Bureau of Labor Statistics has updated
to autumn 1980 its three hypothetical annual
budgets for an urban family and the compara­tive
indexes for selected urban areas. This up­dating
reflects changes in prices and personal
taxes from autumn 1979 to autumn 1980.
In autumn 1980, the U.S. average cost of
the lower budget for an urban family of four
was $14,044 a year; the intermediate level,
$23,134; and the higher level, $34,409 (see
table). These budgets represent an increase
in cost of the total budget over autumn 1979
of 11.6 percent for the lower budget, 12.8
percent for the intermediate budget, and 13.5
percent for the higher budget. These are the
largest increases since 1974. The intermediate
and higher budgets rose more than the lower
budget in 1980 because of large increases in
taxes and homeowner costs.
With the exception of housing and taxes,
costs went up about the same for each budget
level. Personal income taxes and transporta­tion
costs showed the largest increase and
clothing the smallest increase. Housing in­creased
more in the two higher budget levels
than in the lowest level because homeowner
costs, which are included only in the inter­mediate
and higher budgets, increased more
than rental costs. Personal income taxes rose
more at the lower budget level; however, the
impact of the increases is more pronounced
at the higher levels because taxes constitute
a larger share of the total budget at these levels.
The budgets represent the costs of three
hypothetical lists of goods and services that
were specified in the midsixties to portray
three relative standards of living. The hypo­thetical
urban family of four is defined as a
38-year-old husband employed full time, a
nonworking wife, a boy of 13, and a girl of 8.
Source: Department of Labor, Bureau of Labor
Statistics, 1981, Autumn 1980 urban family budgets
and comparative indexes for selected urban areas,
News USDL 81-195.
Annual budgets for a 4-person family at 3 levels of living,
urban United States, autumn 1980
Component
Total budget ....... .... ... . .......... . ...... . .
Total family consumption .................... .
Food ........................ . .. . .. .
Housing ............................ .
Transportation . . . . . . . . . . . . . . . . . . . . . . . .
Clothing ........................... .
Personal care . . . . . . . . . . . . . . . . . . . . . . . . .
Medical care . . . . . . . . . . . . . . . . . . . . . . . . . .
Other family consumption .......... .. ... .
Other items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Social security & disability . . . . . . . . . . . . . . . . . . . .
Personal income taxes . . . . . . . . . . . . . . . . . . . . . . .
Lower
$14,044
11,243
4,321
2,608
1,160
907
352
1,298
597
583
881
1,337
Intermediate Higher
$23,134 $34,409
16,969 23,266
5,571 7,024
5,106 7,747
2,116 2,751
1,292 1,888
471 668
1,303 1,359
1,109 1,829
957 1,610
1,427 1,608
3,781 7,924
Source: Department of Labor, Bureau of Labor Statistics, 1981, Autumn 1980 urban family budgets and
comparative indexes for selected urban areas, News USDL 81-195.
Note: Because of rounding, sums of individual items may not equal totals.
18 FAMILY ECONOMICS REVIEW
HOUSING AND URBAN DEVELOPMENT ABSTRACTS
Earth Sheltered Housing: Code, Zoning, and
Financing Issues, U.S. Department of Housing and
Urban Development. Ray Sterling, Roger Aiken, and
John Carmody of the Underground Space Center,
University of Minnesota. 1980.
Interest in the use of earth sheltered housing
has expanded in recent years, particularly
because of concerns for energy conservation
and environmental quality. This study was
aimed at determining whether use of earth
sheltered housing is likely to continue to
expand and whether such expansion is being
hindered by unnecessary restraints. Two key
questions are raised: Does earth sheltered
construction offer sufficient net advantages
in relation to other types of housing to sus­tain
a widespread continued increase in its
use? Are there legal, regulatory, or financing
restraints that will make this a difficult option
to pursue? To answer these questions, the
study reviews the concept and development
of earth sheltered housing, including a his­torical
background and the present status
of construction and research activity. Advan­tages
and disadvantages are discussed, as are
the issues and constraints in building codes
and zoning ordinances. Financing practices
and impediments are reviewed and specific
suggestions for potential owners are presented.
The appendices include references and related
talks and papers. Single copies of Earth Shel­tered
Housing: Code, Zoning, and Financing
Issues, PDR-585, are available free from HUD
USER, P.O. Box 280, Germantown, Md.
20874.
Departmental Programs, U.S. Department of Hous­ing
and Urban Development. 1980.
This booklet contains a brief description
of each HUD program including information
on grants, guarantees, loans, mortgage and_l~an
insurance home-ownership and rent subsidies,
and technical assistance. Single copies of
Departmental Programs, HUJ?-8?-370, ~e
available free from HUD, PublicatiOn Service
Center, 451- 7th Street, SW., Washington, D.C.
20410.
FALL 1981
How Well Are We Housed, Volume 6: larger
Households, U.S. Department of Housing and Urban
Development, Office of Policy Development and
Research. Ruth Limmer. 1980.
This report, part of a series on the housing
conditions of various groups within the pop­ulation,
discusses the inadequacies of the
housing of large families in the United States.
The large household, composed of six people
or more, decreased from 10.7 percent of
total households in the country in 1970 to
7.1 percent in 1976. Although the rate of
flawed housing for the entire Nation is 10
percent, it is 17 percent for large households.
The likelihood of being inadequately housed
is greatest in the rural West and in the New
York City area and is smallest in the North
Central region. Single copies of How Well
Are We Housed, Volume 6: Larger House­holds,
PDR-543, are available free from HUD
USER, P.O. Box 280, Germantown, Md.
20874.
Occasional Papers in Housing and Community
Affairs, Volume 6, U.S. Department of Housing and
Urban Development, Office of Policy Development and
Research. Bernard Ross, editor. 1979.
This volume presents three papers that
carefully assess various aspects of the Section
8 Rental Assistance Program and one paper
that provides a state-of-the-art review of
research to date on housing-market discrim­ination.
The first paper provides a broad
impact evaluation of the section 8 existing
program; it examines the extent to w~ich
the demand-side approaches can achieve
objectives related to the improvement of
housing and neighborhoods, consumer sov­ereignty,
program efficiency, program equity,
and administrative simplicity. The second
paper focuses on the verification of house­hold
income under section 8, while the third
paper examines the rent-reduction-credit fea­ture
of the program. The final paper reviews
research on housing-market discrimination,
distinguishing between discrimination and
19
segregation. Various potential causes of ob­served
price differentials between housing
submarkets occupied by blacks and whites
are analyzed, and the process of neighbor­hood
racial transition is discussed. A com­prehensive
agenda for research related to the
achievement of freedom of choice and inte­gration
is developed. Single copies of Occa­sional
Papers in Housing and Community
Affairs, Volume 6, PDR-497-6, are available
free from HUD USER, P.O. Box 280, German­town,
Md. 20874.
Families and Housing Markets: Obstacles to
Locating Suitable Housing, u.s. Department of
Housing and Urban Development, Office of Policy
Development and Research. Margaret C. Simms of the
Urban Institute. 1980.
This report is one of several supporting re­search
papers for HOD's Office of Policy
Development and Research contributing to
the White House Conference on Families. The
contribution was summarized in "Housing
Our Families," which was abstracted in Family
Economics Review Spring 1981 issue. Ab­stracts
of two other supporting research papers,
"How Restrictive Rental Practices Affect Fam­ilies
with Children" and "Measuring Restrictive
Rental Practices Affecting Families with Chil­dren,"
were also published in the Spring 1981
issue.
This report presents the conceptual frame­work
for assessing the housing problems of
various types of families that was used in
"Housing our Families," as well as the back­ground
materials used in some of that report's
chapters. The current position of individuals
and families in the housing market is evaluated.
The determinants of family housing quality
are categorized into demand and supply fac­tors.
Relevant literature that deals with housing
problems of families is reviewed. Income on
the demand side and discrimination on the sup­ply
side are identified as the most important
obstacles to securing appropriate housing for
families of various types. A research and policy
agenda is presented based on the review. Single
copies of Families and Housing Markets:
Obstacles to Locating Suitable Housing, PDR-
654, are available free from HUD USER, P.O.
Box 280, Germantown, Md. 20874.
20
Housing Costs in the United States and Other
Industrialized Countries 1970-1977, u.s. Depart­ment
of Housing and Urban Development, Office of
Policy Development and Research. E. Jay Howenstine.
1979.
This study compares the average annual rates
of increase in the cost of new housing and rents
in the United States and 20 industrialized
countries throughout the world. The average
rate of increase in the cost of new housing
for the period 1970-77 ranged from a low of
4.8 percent in Switzerland to a high of 17.3
percent in New Zealand. The United States
experienced an average rate of increase of 8.5
percent, placing it just into the lower range of
countries. In all but two countries, Japan and
Switzerland, rates of increase in new housing
costs were higher than rates of increase in the
Consumer Price Index, with the United States
falling midrange in the array of countries. The
United States was the lowest of all countries
in the average annual rate of increase in build­ing
labor costs and rents. Single copies of
Housing Costs in the United States and Other
Industrialized Countries 1970-1977, PDR-526,
are available free from HUD USER, P.O. Box
280, Germantown, Md. 20874.
Evaluation of Alternatives for Financing Low
and Moderate Income Rental Housing, u.s. Gen­eral
Accounting Office. 1980.
This report presents a comprehensive analy­sis
of alternative financing mechanisms for
the production of rental housing under section
8 of the National Housing Act, HOD's prin­cipal
housing assistance program for low- and
moderate-income households. A framework
is developed to identify and analyze relevant
factors (such as cost efficiency, financial risk,
life cycle costs, and tenants served) so that rec­ommendations
can be made. The section 8
alternatives are also compared with financing
mechanisms under the conventional public
housing program. Single copies of Evaluation
of Alternatives for Financing Low and Mod­erate
Income Rental Housing, PAD-80-13, are
available free from GAO, Document Handling
and Information Services Facility, P.O. Box
6015, Gaithersburg, Md. 20877.
FAMILY ECONOMICS REVIEW
How Selected HUD Programs Serve Low and
Moderate Income Families With Children
U.S. Department of Housing and Urban Development'
Office of Policy Development and Research. Su~
Marshall and James Zais of The Urban Institute. 1980.
This paper presents a preliminary examina­tion
of the extent to which HUD programs
have helped low- and moderate-income families
with children secure housing. Included is a
discussion of conceptual issues involved in
studies of how particular population groups­such
as families with children-are affected by
public programs. A number of factors likely
to affect participation in HUD programs by
families with children are analyzed. These fac­tors
include maximum mortgage limits, pro­hibitions
of discrimination, and the availability
of systematic ownership counseling. Finally,
the paper discusses possible policy directions.
An appendix summarizes three types of regula­tions
related to families with children, and a
bibliography includes about 7 5 references.
Single copies of How Selected HUD Programs
Serve Low and Moderate Income Families
With Children, No. 1418-1, are available free
from The Urban Institute, 2100 M Street, NW.,
Washington, D.C. 20037.
Price-Level Adjusted Mortgages (PLAMs): A
Comparison With Other Mortgage Instruments,
Federal Home Loan Bank Board, Office of Policy and
Economic Research. Henry J. Cassidy. 1981.
This paper describes how the price-level
adjusted mortgage (PLAM) works. Advantages
and disadvantages, for both borrowers and
lenders, are discussed. Examples are presented
and comparisons are made with the standard,
fixed-payment mortgage, the variable- and
renegotiable-rate mortgages, the graduated­payment
mortgage, and the shared-apprecia­tion
mortgage. Single copies of Price-Level
Adjusted Mortgages (PLAMs): A Comparison
With Other Mortgage Instruments, Research
Working Paper No. 90, are available free from
the Federal Home Loan Bank Board, Office
of Policy and Economic Development, 1700
G Street, NW., Washington, D.C. 20552.
FALL 1981
The Investment Demand for Housing, Federal
Home Loan Bank Board, Office of Policy and Eco­nomic
Research. Thomas P. Boehm and Joseph A.
McKenzie. 1981.
This paper explores the effect inflation has
on tenure choice and housing demand. Data
from the Institute of Social Research Panel
Study of Income Dynamics on mover house­holds
that purchased a home in the 1970-78
period were used to estimate a tenure choice
and a demand-for-housing equation. The re­sults
suggest that inflation adversely affects
home-ownership and housing demand. Price­and
interest-rate effects more than offset
the positive effect that expected apprecia­tion
has on housing demand. Single copies
of The Investment Demand for Housing,
Research Working Paper No. 99, are avail­able
free from the Federal Home Loan Bank
Board, Office of Policy and Economic Re­search,
1700 G Street, NW., Washington, D.C.
20552.
The Conversion of Rental Housing to Con­dominiums
and Cooperatives-Annotated Bib­liography,
U.S. Department of Housing and Urban
Development, Division of Policy Studies. 1980.
This bibliography references over 150 books,
articles, studies, and monographs related to
condominium and cooperative conversion.
Each entry is thoroughly annotated; informa­tion
on how to obtain many of the sources
is also included. The publication is part of a
group of materials prepared by HUD on con­dominium-
and cooperative-conversion activity
throughout the country. Included in the series
are The Conversion of Rental Housing to
Condominiums and Cooperatives: A National
Study of Scope, Causes and Impacts (ab­stracted
in Family Economics Review, Spring
1981) and two appendix volumes to the
study report. Single copies of The Conversion
of Rental Housing to Condominiums and
Cooperatives-Annotated Bibliography, PDR-
554-3, are available free from HUD USER,
P.O. Box 280, Germantown, Md. 20874.
21
Directory of Federal Statistics for Local Areas:
A Guide to Sources-Urban Update 1977-78,
U.S. Department of Commerce, Bureau of the Census.
1979.
This urban update is a supplement to the
Directory of Federal Statistics for Local Areas.
Together, these volumes show which govern­ment
reports provide statistics for cities and
other local areas. They cite reports published
by the Census Bureau and other Federal Agen­cies.
Both are for sale from the Superintendent
of Documents, U.S. Government Printing
Office, Washington, D.C. 20402, as follows:
Directory of Federal Statistics for Local Areas,
GPO Stock No. 003-024-01553-6, $5.50.
Directory of Federal Statistics for Local Areas:
A Guide to Sources-Urban Update 1977-78,
GPO Stock No. 003-024-02167-6, $4.50.
INTEREST RATES FOR HUD/FHA AND VA MORTGAGES
The U.S. Department of Housing and Urban
Development (HUD) increased the maximum
allowable interest rate for Federal Housing
Administration (FHA)-insured, level-payment
mortgages for single-family homes to 16.5
percent, effective August 17, 1981. The Vet­eran's
Administration (VA) simultaneously
made the same change for the maximum
allowable interest rate for V A-guaranteed home
mortgage loans. The higher interest rate will
cost the purchaser of a home with a $60,000,
30-year level-payment mortgage about an addi­tional
$49 per month.
The new rate exceeds the previous record
high that was in effect during the summer of
1981. The following table shows the history
of maximum allowable interest rates on HUD 1
FHA-insured mortgages since the beginning
of the program.
The interest rate ceiling on HUD/FHA­insured
graduated payment mortgages (GPM's)
'for single-family houses was raised to 17 per­cent,
up from 16 percent. HUD first began
setting an interest-rate ceiling specific to
GPM's effective August 20, 1980. There have
been six changes in the ceiling rates since
that time, with the GPM-specific rate con­sistently
0.5 percent higher than the rate for
level-payment mortgages. The monthly pay­ments
on GPM's start lower than for level­payment
mortgages, but rise over time. 1
Rates on conventional mortgages, those
not backed by the Government, have risen
1 For more information on GPM's, see "New mort­gage
designs," by Carolyn S. Edwards, Family Eco­nomics
Review, Fall1978, pp. 8-16.
22
above the HUD /FHA and VA ceiling, making
lenders reluctant to write the Government­backed
loans. To bridge the difference between
the FHA/VA ceiling and what lenders can
earn on a conventional mortgage, lenders
charge points ( 1 point equals 1 pet of the mort­gage)
which, in effect, represents a prepayment
of the interest differential. Because FHA/VA
buyers cannot pay more than 1 discount point,
sellers must cover this cost. As a result, sellers
are discouraged from selling to people with
the FHA/VA financing. With the increased
allowable interest rate, the number of dis­count
points required by lenders should be
reduced, preventing sellers from increasing
prices to avoid absorbing the points cost.
The rate change should help maintain FHA/
VA as a financing alternative for those who
need the more favorable terms of these Gov­ernment-
backed mortgages.
The Housing and Community Development
Act of 1980 directed HUD to adjust the FHA
ceiling rate frequently enough to minimize
discount points, especially in times of rising
interest rates. HUD has adjusted the rate five
times since October 8, 1980, the effective
date of that legislation. The increase from 13
percent, which was in effect in October, to
the current 16% percent translates into an addi­tional
$167.40 per month for buyers with
$60,000, 30-year level-payment mortgages.
The act also created a demonstration pro­gram
(which was just approved), that allows
1,000 FHA single-family mortgages in each
of the 10 HUD regions with a firm 30-day
loan commitment to be written at a negotiated
rate of interest, thus more accurately reflect­ing
market conditions.
FAMILY ECONOMICS REVIEW
HUD /FHA maximum allowable interest rates-single family houses
Rate
(Percent)
5-5-1/2 ............... . .... .. ........ .
5 ................................... .
4-1/2 .................. - .. .. . ....... . .
4-1/4 ................................ .
4-1/2 ................................ .
5 .... ........................... . ... .
5-1/4 ................................ .
5-3/4 ...................... . ......... .
5-1/2 ................................ .
5-1/4 ................................ .
5-1/2 ................................ .
5-3/4 ....................... . . . ...... .
6 ..... . ...................... . ...... .
6-3/4 ................................ .
7-1/2 . ............... ................ .
8-1/2 ................................ .
8 ................................... .
7-1/2 ........ . ....................... .
7 ................................... .
7-3/4 ................................ .
8-1/2 ................................ .
8-1/4 ................................ .
8-1/2 ................................ .
8-3/4 ................................ .
9 ................................... .
9-1/2 .. .... .......................... .
9 ................................... .
8-1/2 ................................ .
8 ................................... .
8-1/2 ................................ .
9 ..... .. ............................ .
8-3/4 ................................ .
8-1/2 ................................ .
8 ....... .. .......................... .
8-1/2 ................................ .
8-3/4 ................................ .
9 ................................... .
9-1/2 ....... . ........... . ............ .
10 ... ... ............. . .............. .
10-1/2 ............................... .
11-1/2 ............................... .
12 .................................. .
13 .......... ... ..................... .
14 .................................. .
13 .................................. .
11-1/2 ............................... .
12 .............................. .
13 .................................. .
13-1/2 ............................... .
14 .............................. .
14-1/2 ................ . .............. .
15-1/2 ........................... .
16-1/21
...................•.....•.
November 27, 1934
June 24, 1935
August 1, 1939
April 24, 1950
May 2, 1953
December 3, 1956
August 5, 1957
September 23, 1959
February 2, 1961
May 29,1961
February 7, 1966
April 11, 1966
October 3, 1966
May 7, 1968
January 24, 1969
January 5, 1970
December 2, 1970
January 13, 1971
February 18, 1971
August 10, 1973
August 25, 1973
January 22, 1974
April15, 1974
May 13, 1974
July 8, 1974
August 14, 1974
November 25, 1974
January 21, 1975
March 3, 1975
April 28, 1975
September 2, 1975
January 5, 1976
March 30, 1976
October 18, 1976
May 31, 1977
February 28, 1978
May 23, 1978
June 29, 1978
April 23, 1979
September 26, 1979
October 26, 1979
February 11, 1980
February 28, 1980
April 3, 1980
April 28, 1980
May 15, 1980
August 20, 1980
September 22, 1980
November 24, 1980
March 9, 1981
April 13, 1981
May 8, 1981
August 17, 1981
1 As of September 8, 1981, when Family Economics Review went to press.
Source: U.S. Department of Housing and Urban Development.
FALL 1981
Period
June 23, 1935
July 31, 1939
April 23, 1950
May 1, 1953
December 2, 1956
August 4, 1957
September 22, 1959
February 1, 1961
May 28, 1961
February 6, 1966
April 10, 1966
October 2, 1966
May 6, 1968
January 23, 1969
January 4, 1970
December 1, 1970
January 12, 1971
February 17,1971
June 30, 1973
August 24, 1973
January 21, 1974
April14, 1974
May 12, 1974
July 7, 1974
August 13, 1974
November 24, 1974
January 20, 1975
March 2, 1975
April 27, 1975
September 1, 1975
January 4, 1976
March 29, 1976
October 17, 1976
May 30, 1977
February 27, 1978
May 22, 1978
June 28, 1978
April 22, 1979
September 25, 1979
October 25, 1979
February 10, 1980
February 27, 1980
April 2, 1980
April27, •1980
May 14, 1980
August 19, 1980
September 21, 1980
November 23, 1980
March 8, 1981
April 12, 1981
May 7, 1981
August 16, 1981
23
NATIONAL HEALTH-CARE EXPENDITURES
National health-care expenditures (NHE)
amounted to $212.2 billion in 1979, a 12.5-
percent increase from 1978. This increase was
in line with an annual average increase of 12.2
percent since 1965. From 1965 to 1979,
expenditures increased more rapidly for health
care than for other sectors of the economy.
Thus, the health-care component of the Gross
National Product rose from 6.1 percent to
9.0 percent.
The NHE is the sum of expenditures for
personal health care and for the prepayment
and administration of public and private
health-related programs. The personal health­care
component measures spending for ser­vices
to individuals for hospital care, physi­cians'
and dentists' services, nursing home
care, drugs and medical sundries, and miscel­laneous
personal medical expenses. In 1979,
the Nation spent $188.6 billion on personal
health care compared with $80.2 billion
in 1972. Price inflation accounted for 65.6
percent of the increased expenditures for
personal health care, population growth
accounted for 6.6 percent, and greater use or
changes in the amounts and kinds of goods
and services accounted for 27.8 percent.
Hospital care, physicians' services, and nurs­ing
home care accounted for more than half
of health-care expenditures (see table). Al-though
increased hospital expenditures were
primarily due to inflation, an increase in
the number of laboratory tests, surgical opera­tions,
outpatient visits, and vacant hospital
beds per day added to the cost. The increase
in expenditures for physicians' services may
be attributed to the following factors: (1)
Increased number and specialization of doc­tors,
(2) tendency for physicians to perform
more diagnostic tests because of increasing
concerns over malpractice liability, and (3)
decrease in the practice of "discounting"
charges· for persons less able to pay, because
third party payments absorb a large portion
of reimbursements for services. Nursing home
expenditures constituted the fastest growing
health-care category. More elderly people
than ever before live in nursing homes be­cause
the lifespan has lengthened and social
patterns have changed in relation to family
responsibility for the elderly. Increased costs
of labor, fuel, and food also contributed to
the growth in expenditures for nursing home
care.
More than two-thirds of all personal health­care
spending in 1979 was financed by third
parties (public agencies, private insurers, and
philanthropic and industrial organizations),
up from less than one-half in 1965. While the
portion of funds supplied by private health
National health expenditures
Expenditure category
Total ............................................. .
Personal health care ................................. .
Hospital care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .
Physicians' services ................... ........ ..... .
Nursing home care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Drugs and medical sundries . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dentists' services ................................. .
Other personal care .. .............................. .
Administration, prepayment, public health activity,
research, and construction ........................... .
1965
$42.0
1 36.0
13.9
8.5
2.1
5.2
2.8
3.6
6.0
Billions
1979
$212.2
1 188.6
85.3
40.6
17.8
17.0
13.6
14.2
23.6
1 Subcategories may not add up to this amount due to rounding ................................ .
Source: Gibson, Robert M., 1980, National health expenditures, 1979, Health Care Financing Review, summer
issue, U.S. Department of Health and Human Services, Health Care Financing Administration.
24 FAMILY ECONOMICS REVIEW
insurers increased slightly between 1965 and
197~, public spending nearly doubled, pri­marily
as a result of the establishment and
expansion of the federally funded Medicaid
and Medicare programs. In 1979, 40.2 percent
($75.9 billion) of personal health-care spend­ing
was financed by public spending, 26.7
percent ($50.3 billion) by private insurers,
and 1.3 percent ($2.4 billion) by private phil-anthropic
and industry groups. The remaining
31.8 percent ($60.0 billion) was financed by
direct payments from consumers.
Source: Gibson, Robert M., 1980, National Health
expenditures, 1979, Health Care Financing Review,
summer issue, U.S. Department of Health and Human
Services, Health Care Financing Administration.
EVALUATING BENEFITS FROM RESEARCH IN HOME ECONOMICS
In the past, home economics has not had
the financial support necessary to produce a
coherent body of basic or applied research
findings partly because it encompasses many
diverse and interrelated variables. This com­plexity
often complicates efforts to evaluate
the benefits of home economics research.
With increasing concerns over rising levels
of public expenditures, there is pressure
for accountability in research and for infor­mation
on the expected payoffs from money
invested in research activities. Demonstrating,
through project evaluation, that research
findings can have a positive effect on families
has become an important factor in acquiring
initial and ongoing support for family-related
research programs.
Evaluating research projects is best accom­plished
when the necessary information is an­ticipated
while the research is being planned.
In this way the data necessary for the evalua­tion
process can be gathered at the same time
as data for the research project. The researcher
can begin this task by answering the following
questions:
• What are the objectives of the research
project?
• Who are the users and beneficiaries of
the information that will come out of
this project?
• By what method will the users and
beneficiaries receive the information?
• How will the benefits to each group be
measured?
• What will be the project costs and how
will they be measured?
• What kinds of records should be kept?
FALL 1981
Benefit-cost and cost-effectiveness analyses
can be valuable tools for demonstrating to
decisionmakers that home economics research
makes a difference. These analyses should be
used in the early stages of the decisionmaking
process, keeping costs and benefits in mind
as an aid in making decisions about resources.
Using benefit-cost analysis, research bene­fits
are evaluated in dollar terms. The actual
costs are subtracted from the benefits. It is
often difficult, however, to put a dollar value
on benefits. For example, improved parent­child
relationships cannot be assigned a dollar
value. Benefits may be found in costs avoided,
however, such as costs of crisis intervention
services.
For benefits that cannot be quantified,
cost-effectiveness analyses may be used. It is
much more difficult to document results
when output cannot be quantified; there­fore,
it is extremely important to develop
a rationale of need for those anticipated
benefits when using cost effectiveness. For
example, the cost-effectiveness method could
be used to evaluate several alternative strate­gies
for control of vitamin deficiency to deter­mine
which strategies would provide the neces­sary
results at the least cost.
Because cost-benefit and cost-effectiveness
analyses are respected methods for measuring
payoffs from projects, it is advisable to use
these evaluative methods whenever possible.
Several other methods, however, can give pos­sible
indications of the value of a particular
research.
Evaluative methods can be used in many
phases of home economics. A 1979 report,
25
Costs and Benefits of Nutritional Care, pro­duced
by the American Dietetic Association,
used benefit-cost analysis to develop research
protocols for use in nutritional counseling ser­vices.
In this research the relationship be­tween
change in nutritional services and
change in health status had to be determined.
Several analyses were used to evaluate
benefits from a household time-use study
conducted in 1967-68 by Kathryn Walker of
Cornell University. Indicators of benefits
included the number of publications based
on this research, the number of citations in
journals, the number and variety of the dis­ciplines
represented in the publications, the
amount of lag time between publication of
results and the citations, and the number
of requests for information that were made
to the researcher.
Establishing that benefits exceed costs or
that research is cost effective is only part
of the evaluation process. Although these
methods may assist in the decisionmaking
process, they do not determine the final de­cisions.
These decisions are determined through
collective evaluation of all the factors relating
to overall program objectives.
Source: Volker, Carol B. and Ruth E. Deacon,
1980, Report of evaluation of benefits from research
in home economics, Cooperative Research Agreement
12-15-79-23, U.S. Department of Agriculture, and
Iowa Agriculture and Home Economics Experiment
Station, Ames, Iowa. Single copies of the report are
available from Ruth E. Deacon, Dean of Home Eco­nomics,
123 McKay Hall, Iowa State University, Ames,
Iowa 50011.
SOCIAL INDICATORS Ill
The U.S. Department of Commerce, Bureau
of the Census, has released Social Indicators
III. Like its predecessors, Social Indicators
1973 and Social Indicators 1976, this 648-
page report provides a comprehensive collec­tion
of statistics describing social conditions
and trends in the United States. Eleven subject
areas are examined in separate chapters:
Population and the family
Health and nutrition
Housing and the environment
Transportation
Public safety
Education and training
Work
Social security and welfare
Income and productivity
Social participation
Culture, leisure, and use of time
Each chapter includes an introductory text,
colorful charts, statistical tables, references
to further reading, and names and addresses
of key resource individuals who can provide
additional information. The introductory chap­ter
includes an overview of quality of life in
26
the United States and three bibliographies
relating to major English language studies in
the field, other national social indicator re­ports,
and the U.S., State, and local-area social­indicator
reports. Information on sources
and quality of the data, a glossary of terms,
and an index are provided at the end of the
report.
Social Indicators III is available for $17
from the Superintendent of Documents, U.S.
Government Printing Office, Washington, D.C.
20402. Ask for stock No. 003-024-02683-0.
Social Indicators III is also supplemented
by a special issue of The Annals of the Ameri­can
Academy of Political and Social Science,
Social Indicators: American Society in the
Eighties. This special edition includes essays
that elaborate on individual chapters of Social
Indicators III or that focus on crosscutting
topics or issues. Volume 453 of the annals is
available from the American Academy of
Political and Social Science, 3937 Chestnut
Street, Philadelphia, Pa. 19104. The price is
$8 for paperback and $10 for hardback, plus
$1 handling charge for each.
FAMILY ECONOMICS REVIEW
ECONOMIC INDICATORS OF THE FARM SECTOR
The Department's Economic Research Ser­vice
(ERS) has developed new procedures
to measure statistically the economic status
of the Nation's farm and farm-operator in­come.
Economic Indicators of the Farm
Sector: Income and Balance Sheet Statistics
1979 is the first in four publications in th~
"Economic Indicators of the Farm Sector"
series. This publication replaces the "Balance
Sheet of the Farming Sector," which was
published annually, and is the first application
of the new set of financial measures used by
ESS.
To obtain a single free copy of this report
(SB 650), dated December 1980, write to:
Economic Management Services, Room 0054,
South Building, Washington, D.C. 20250.
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:
• A TIME TO CHOOSE: SUMMARY REPORT OF THE STRUCTURE OF AGRICULTURE.
January 1981. $5.50.
• INSECTS AND DISEASES OF VEGETABLES IN THE HOME GARDEN. AlB 380. Revised
November 1980. $3.75.
• A PLANNING GUIDE FOR FOOD SERVICE IN CHILD CARE CENTERS. FNS 64. Jan­uary
1981. $2.00.
Single copies of the following are available free from the U.S. Department of Agriculture. Please
address your request to the office indicated:
From Economic Management Services, Room 0054, South Building, Washington, D.C. 20250:
• INFLATION: A FOOD AND AGRICULTURAL PERSPECTIVE. AER 463. February 1981.
• FOOD CONSUMPTION, PRICES, AND EXPENDITURES. SB 656. February 1981.
• ECONOMIC INDICATORS OF THE FARM SECTOR: PRODUCTION AND EFFICIENCY
STATISTICS, 1979. SB 657. February 1981.
• ECONOMIC INDICATORS OF THE FARM SECTOR: STATE INCOME AND BALANCE
SHEET STATISTICS, 1979. SB 661. March 1981.
• ANALYSIS OF THE IMPACT OF FOOD STAMP REDEMPTIONS ON FOOD STORES
AND REGIONS- FISCAL YEAR 1978. TB 1646. April1981.
From Farmers Home Administration, Information Staff, Room 4121, South Building, Wash­ington,
D.C. 20250:
• THIS IS FmHA. PA 973. Revised August 1980.
From Soil Conservation Service, Information Division, Room 6204, South Building, Washing­ton,
D.C. 20250:
e ASSISTANCE AVAILABLE FROM THE SOIL CONSERVATION SERVICE. AlB 345.
Revised December 1980.
County Extension Staff: When ordering publications use Extensi~n Publications Shipping Order Form ES-91A
and follow instructions from your State Publications Distribution Off1cer.
FALL 1981
27
THE SUPPLY AND DEMAND FOR HOME ECONOMICS GRADUATES
The current and estimated demand for grad­uates
with advanced degrees in home eco­nomics
outweighs the supply. This conclusion
was drawn from a manpower assessment proj­ect
conducted by Science and Education
Administration's Office of Higher Education
in its recently released publication, Graduates
of Higher Education in the Food and Agri­cultural
Sciences: An Analysis of Supply/
Demand Relationships, Volume II-Home Eco­nomics.
In general, shortages of home eco­nomics
graduates occur in the occupations
of administrators and managers; design, man­ufacturing,
and processing specialists; market­ing,
merchandising, and sales personnel; and
scientific and professional specialities. The
supply of graduates exceeds demand, however,
in the occupations of media specialists, ser­vice
specialists, and educators. Graduates with
baccalaureate and master degrees appear to
be in greatest demand in business; family I
consumer resource management; food science
and human nutrition; food service manage­ment
and institutional management; human
environment and shelter; and textiles and
clothing. Graduates with Ph. D's are estimated
to be inadequate across the full spectrum of
home economics.
A limited number of copies of this report,
Miscellaneous Publication 1407, are available
free (while supply lasts) from Agricultural
Research Service, Publications, Distributions,
and Requests Unit, Room 6007, South Build­ing,
Washington; D.C. 20250.
RURAL AND SMALL TOWN POPULATION CHANGE, 1970-80
During the seventies-for the first time in
more than 160 years-the population growth
rate in the United States was higher in rural
and small-town communities than in metro­politan
areas. Preliminary counts from the
1980 Census of Population show that the
nonmetropolitan counties grew in population
by 15.4 percent from 1970 to 1980. This
compares with a 9.1-percent increase for
metropolitan counties, and a 10.8-percent
increase for the Nation as a whole. The number
of people in nonmetropolitan counties in­creased
from 54.4 million at the beginning
of the seventies to 62.8 million by 1980.
This includes 4 million people who moved
in from metropolitan areas and abroad. By
contrast, in the sixties some 2.8 million more
people moved out of the rural and small­town
counties than into them. However, some
nonmetropolitan counties have become metro-
28
politan in size and character as a result of
their growth and will soon be reclassified as
data become available. 1 The Federal Govern­ment
has recently adopted a more liberal
definition of metropolitan, that will also con­tribute
to a reduction in the official non­metropolitan
population.
1 In general, metropolitan areas contain urban centers
of 50,000 people or more. The boundaries are ex­tended
to county lines, and adjacent counties are
added to the area if they meet certain criteria of
worker commuting and metropolitan character. All
other counties are nonmetropolitan. Metropolitan/
nonmetropolitan status in this report is that of the
early seventies after the criteria in effect at that time
had been applied to the 1970 Census.
Source: Beale, Calvin L., 1981, Rural and Small
Town Population Change, 1970-80, EES-5, Economic
Research Service, U.S. Department of Agriculture.
FAMILY ECONOMICS REVIEW
ALTERNATIVE WORK SCHEDULES
In May 1980, about 12 percent of all full­time,
nonfarm, wage and salary job holders
worked flexible schedules that allowed them
to vary the hours their workday began and
ended. Compressed workweeks of 3, 4, or
4% days were reported by 2.7 percent of all
full-time wqrkers, up from 1. 7 percent in
May 1973.
Of all parents employed full time in wage
and salary jobs, 13 percent worked flexible
schedules although the option was more com­mon
for fathers than mothers. Men were more
likely than women and persons age 65 and
older were more likely than younger persons
to work flexible schedules. Flexible schedules
were most prevalent in occupations such as sales,
managerial and administrative professional and
technical, and transportation-equipment oper­atives-
occupations in which the practice
is long standing and informal. This is in con­trast
to clerical and service occupations, for
which flexible schedules are more recent.
Finance, insurance, and real estate; public
administration; and trade industries have the
FALL 1981
highest proportion of full-time workers on
flexible schedules. In Federal public admin­istration
where experimentation with alter­native
work schedules was encouraged, one
out of five workers was on a flexible schedule.
Compressed full-time workweeks of 4%
days or less were most common among ser­vice
workers, transportation-equipment opera­tives,
and factory operatives. Local public
administration led in the use of compressed
work schedules, many of which represented
schedules of police and fire personnel. Some
full-time employees were on schedules that
were both compressed and flexible. Workers
on weekly schedules of 5 days a week were
less likely than those on shorter workweeks
to have flexible schedules. Flexible schedules
were most prevalent among employees who
usually worked 6 days or more per week.
Source : U.S. Department of Labor, Bureau of
Labor Statistics, 1981, 10 million Americans work
flex ible schedules, 2 million work full time in 3 to
4% days, NEWS, USDL Pub. No. 81-100.
29
C>J
0
"1j > :..;..:.
t"
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t_:J:j
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0 r:n
::0
t_:J:j
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~
Cost of food at home estimated for food plans at 4 cost levels, June 1981, U.S. average 1
Sex-age groups
FAMILIES
Family of 2: 3
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
INDIVIDUALS 4
Child:
7 months to 1 year
1-2 years ............. . .
3-5 years .............. .
6-8 years .............. .
9-11 years ............. .
Male:
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 ............... ..
Thrifty
plan 2
$32.90
29.60
46.70
56.30
6.70
7.60
9.20
11.70
14.70
15.70
17.20
16.50
14.70
13 .90
13.40
12.20
16.80
17.80
Cost for 1 week
Low-cost
plan
$42.30
37.70
59.40
72.00
8.10
9.50
11.40
14.90
18.60
19.70
21.80
21.30
18.80
17.60
17.20
15.50
21.30
22.50
Moderate­cost
plan
$52.90
46.60
73.90
90.00
9.90
11.70
14.10
18.60
23.30
24.70
27.20
26.80
23.30
21.70
21.30
19.10
26.10
28.00
Liberal
plan
$63.40
55.50
88.40
107.60
11.60
13.90
16.90
22.20
27.80
29.40
32.60
32.20
27.90
25.90
25.40
22.60
31.00
33.20
Thrifty
plan 2
$142.30
127.90
202.10
244.10
29.00
32.80
39.90
50.90
63.80
68.00
74.40
71.40
63.50
60.10
58.00
52.80
72.80
77.30
Cost for 1 month
Low-cost
plan
$183.40
163.60
257.60
311.70
35.00
41.40
49.50
64.50
80.50
85.50
94.30
92.20
81.40
76 . 20
74.50
67.30
92.20
97.60
Moderate­cost
plan
$229.40
202.20
320 .60
389.80
42.70
50.90
61.20
80.50
100.80
106.80
117.90
116.10
100.90
94.20
92 .40
82 .90
113 .20
121.30
Liberal
plan
$274.30
240.90
383.00
466.00
50.40
60.30
73.30
96.20
120.40
127 . 50
141.40
139.30
120.90
112 . 10
110 . 10
98 . 10
134 .30
144.00
1Assumes that food for all meals and snacks is purchased at the store and prepared at home. Estimates for each plan
were computed from quantities of foods published in the Winter 1976 (thrifty plan) and Winter 1975 (low-cost, moderate­cost,
and liberal plans) issues of Family Economics Review . The costs of the food plans were first estimated using
prices paid in 1965-66 by households from USDA's Household Food Consumption Survey with food costs at 4 selected levels.
USDA updates these survey prices to estimate the current costs for the food plans using information from the Bureau of
Labor Statistics: "Estimated Retail Food Prices by Cities" from 1965-66 to 1977 and "CPI Detailed Report," tables 3
and 9, after 1977.
2Coupon allotment in the Food Stamp Program based on this food plan.
310 percent added for family size adjustment . See footnote 4.
4The costs given are for individuals in 4-person families. For individuals in other size families, the following
adjustments are suggested: 1-person--add 20 percent; 2-person --add 10 percent; 3-person--add 5 percent; 5- or 6-person-­subtract
5 percent; 7- or more- person--subtract 10 percent .
n
0
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0
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-4
:I:
0 s: m
CONSUMER PRICES
Consumer Price Index for all urban consumers
(1967 = 100)
Group
All i terns
Fo~d ........................... .
ood at home ................. .
Food away from home .......... .
Housing ........................ .
Shelter ...................... .
Rent ....................... .
Homeownership .............. .
Fuel and other utilities ..... .
Fuel oil, coal, and
bottled gas ............... .
Gas (piped) and electricity .
Household furnishings
and operation ............... .
Apparel and upkeep ............. .
Men's and boys' appa re 1 ...... .
Women's and girls' apparel .. ..
Footwear ..................... .
Transportation ................. .
Private ...................... .
Public ....................... .
Medical care .................. ..
Entertainment .................. .
Other goods and services ....... .
Personal care ................ .
June
1981
271.3
273.6
268.7
290.6
292.2
312.6
206.8
350.4
320.2
682.0
350.2
221.1
185.8
176.6
155.4
200.4
279.9
277.9
303.9
291.5
220.8
233.4
232.1
May
1981
269.0
272.5
267.7
289.3
288.5
308.4
205.9
345.0
314.9
685.8
339.6
220.1
186.4
176.8
157.2
201.0
277.8
276.0
297.7
289.0
220.3
232.2
230.5
Apr.
1981
266.8
272.9
268.7
288.2
284.8
303.8
204.2
339.3
310.5
690.6
330.6
219.2
186.4
175.6
158.8
199.3
275.3
273.4
297.2
287.0
219.2
229.9
228.7
June
1980
247.6
252.0
248.0
266.6
266.7
286.3
191.1
320.4
282.2
558.7
308.8
205.5
177.2
166.8
153.0
189.0
249.7
249.7
242.2
264.7
205.3
212.5
212.4
Source: U.S. Department of Labor, Bureau of Labor Statistics.
NEW BASE YEAR FOR CONSUMER PRICE INDEX
Beginning with the release of the January
1982 consumer price data, Consumer Price
Indexes (CPI's) that now have a base of
196 7 = 100 will shift to a new base year of
1977 = 100. This shift will be an arithmetic
change that will not involve changes in the
weights of index components or other sub­stantive
or conceptual changes.
The Office of Federal Statistical Policy
and Standards established the new base for
use by all Federal Government statistical
agencies. The shift is in line with the long­standing
policy that index bases be updated
FALL 1981
periodically. The 1977 base year was chosen
because (1) the most recent 5-year economic
census, on which many economic series are
benchmarked, was taken in 1977, and (2) 1977
was considered to be a year "with no particular
extreme conditions that would make it un­representative
of the recent period."
Sources: U.S. Department of Labor, Bureau of
Labor Statistics, 1981 : Federal agencies updating
base year of indexes to 1977, Monthly Labor Review
104(2) :75-76 ; The Consumer Price Index-January
1981, News USDL-81-113.
31
FAMILY ECONOMICS REVIEW
FALL 1981
CONTENTS
Page
CREDIT USE IN THE PURCHASE OF HOUSEHOLD APPLIANCES. . . . . . . . . . . . . . . . . . . . 3
Marsha Freeman Epstein
THE THRIFTY FOOD PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
FINAL REPORT OF PRESIDENT'S COMMISSION ON PENSION POLICY ............... 13
PERSPECTIVES ON WORKING WOMEN: A DATABOOK ............................ 15
CHILD SUPPORT AND ALIMONY: 1978 ......................................... 15
URBAN FAMILY BUDGETS-AUTUMN 1980 ..................................... 18
HOUSING AND URBAN DEVELOPMENT ABSTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
INTEREST RATES FOR HUD/FHA AND VA MORTGAGES .......................... 22
NATIONAL HEALTH-CARE EXPENDITURES .................................... 24
EVALUATING BENEFITS FROM RESEARCH IN HOME ECONOMICS. . . . . . . . . . . . . . . . . 25
SOCIAL INDICATORS III ..................................................... 26
ECONOMIC INDICATORS OF THE FARM SECTOR ................................ 27
THE SUPPLY AND DEMAND FOR HOME ECONOMICS GRADUATES ................. 28
RURAL AND SMALL TOWN POPULATION CHANGE, 1970-80 ....................... 28
ALTERNATIVE WORK SCHEDULES ................. ......... ................. . 29
NEW BASE YEAR FOR CONSUMER PRICE INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Regular Features
SOME NEW USDA PUBLICATIONS ............................................. 27
COST OF FOOD AT HOME .............................................. ...... 30
CONSUMER PRICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Issued October 1981
32