Bureau of Labor Statistics
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BLS 04-30 |
CONSUMER SPENDING PATTERNS IN
PHOENIX-MESA, 2001-2002
Consumer units1 in the Phoenix-Mesa, Arizona metropolitan area spent an average of $41,615 per year in 2001-2002, about 3.8 percent more than the typical U.S. household, according to the latest Consumer Expenditure Survey results from the Bureau of Labor Statistics of the U.S. Department of Labor. According to Acting Regional Commissioner Nancy Treadwell, expenditure levels for most major categories in Phoenix, including housing, transportation, food, and health care were close to the national average. And, since the average annual expenditure in Phoenix was also close to the U.S. total, the percentage of the budget spent on these items was similar to the national share. The typical Phoenix household also mirrored the national profile averaging 2.5 persons, including 1.4 wage earners.
Chart A. Percent distribution of total average expenditures, 2001-2002
A typical Phoenix household spent 65.7 percent of their budget for the three largest expenditure categories--food, transportation, and housing, about the same as the 65.3 percent spent by an average U.S. household. Greater variation existed among the other eight metropolitan areas in the West region. For example, the combined expenditure share for these three categories was well above the national average for households in San Diego and Los Angeles at 70.2 and 68.2 percent, respectively. In other areas, it was well below the norm, averaging 62.6 percent in Anchorage and 62.9 percent in Portland. (See table 2. Geographical boundaries of the region and metropolitan areas referenced in this release are contained in the Technical Note.)
This report contains annual data averaged over a two-year period, 2001 and 2002. The data are from the Consumer Expenditure Survey (CE), which is conducted on an ongoing basis by the Bureau of Labor Statistics (BLS). The U.S. Census Bureau collects the survey data for BLS. The CE is the only national survey that provides both complete data on household expenditures and the demographic characteristics of those households. Survey data cannot be used to make cost of living comparisons between areas. Expenditure levels vary among areas not only because of economic factors such as the prices of goods and services and family income, but also because of differences such as the age of the population, climate, consumer tastes, family size, etc. However, expenditure shares (or the percentage of a consumer unit's budget spent on a particular item) can be used to compare spending patterns across areas. Data shown are annual averages per consumer unit. An individual consumer unit may spend more or less than the average, depending on its particular characteristics.
Over the 2001-2002 period, the average Phoenix household spent 33.4 percent of its budget on housing, not too different from the U.S. average of 32.8 percent, making this the largest category of consumer expenditures. Among the other eight metropolitan areas in the West region, only Anchorage (30.8 percent) and Honolulu (32.7 percent) had a smaller expenditure share for housing than Phoenix. San Diego, at 40.0 percent, had the largest expenditure share for housing in the region. Shelter costs were the main component of a consumer unit's housing costs in Phoenix, accounting for 58.4 percent, not unlike the typical U.S. share of 58.7 percent. (See table 1.) Expenditures on utilities, fuels, and services comprised 19.4 percent of a housing budget in Phoenix, less than the national average of 20.7 percent but above that of the other metropolitan areas in the West.
Transportation was the second largest expenditure category in the Phoenix area accounting for 19.7 percent of a household's budget. Nationally, transportation costs made up 19.2 percent of all expenditures. In the West region, two metropolitan areas had expenditure shares for transportation at 20.0 percent or more-Seattle and Denver. At the lower end were Portland, Honolulu, and San Francisco, all averaging below 17.0 percent. Households in Phoenix allocated a smaller portion of their transportation expenditures for vehicle purchases than did consumer units nationwide (44.3 percent versus 47.1 percent). Households in Phoenix also owned fewer vehicles per household than the national average (1.8 versus 2.0). On the other hand, public transit, which includes spending for buses, taxis, subways, trains and planes, represented 5.3 percent of a Phoenix household's transportation budget, similar to the national average of 5.1 percent.
Food accounted for 12.6 percent of total expenditures in the Phoenix area, slightly less than the national average of 13.3 percent. Consumer units in Phoenix spent 42.3 percent of their total food budget on food prepared away from home, such as restaurant meals, carry-outs, board at school, and catered affairs; this was essentially the same as the nationwide average of 42.2 percent.
Phoenix residents spent a slightly higher portion of their total budget on personal insurance and pensions (10.2 percent), than did the typical consumer unit nationally (9.5 percent). Entertainment expenses also accounted for a larger than average share of a Phoenix household's budget-5.9 percent versus 5.0 percent nationwide.
On the other hand, out-of-pocket medical expenses contributed to 5.4 percent of total expenditures in Phoenix, close to the 5.7 percent spent nationally. Tobacco products and smoking supplies accounted for 0.7 percent of a Phoenix consumer unit's total expenditures. Nationally, that share was 0.8 percent.
Phoenix is one of nine metropolitan areas in the West region and 28 areas nationwide for which Consumer Expenditure data are available. Data are also available for the four geographic regions and the U.S. on the BLS Internet site http://www.bls.gov/cex/ in both text and PDF formats. For personal assistance or further information on the Consumer Expenditure Survey, as well as other Bureau programs, contact the San Francisco Information Office at 415-975-4350.
1 See Technical Note for definition of a consumer unit. The terms consumer unit and household are used interchangeably throughout the text for convenience.
The current Consumer Expenditure Survey program began in 1980. Its principal objective is to collect information on the buying habits of American consumers. The consumer expenditure data are used in a wide variety of research by government, business, labor, and academic analysts. The data are also required for periodic revision of the Consumer Price Index.
The survey consists of two components, a Diary or recordkeeping survey, and an Interview survey. The Diary survey, completed by participating consumer units for two consecutive 1-week periods, collects data on frequently purchased, smaller items. The Interview survey, in which the expenditures of consumer units are obtained in five interviews conducted every 3 months, collects data for larger-cost items and expenditures that occur on a regular basis. The U.S. Census Bureau collects the survey data.
Each component of the survey queries an independent sample of consumer units which is representative of the U.S. population. Over the year, about 7,500 consumer units are sampled for the Diary survey. The Interview sample is conducted on a rotating panel basis, with about 7,500 consumer units participating each quarter. The data are collected on an ongoing basis in 105 areas of the country.
The integrated data from the BLS Diary and Interview surveys provide a complete accounting of consumer expenditures and income, which neither survey component alone is designed to do. Due to changes in the survey sample frame, metropolitan area data in this release are not directly comparable to those prior to 1996.
The expenditure data in this release should be interpreted with care. The expenditures are averages for consumer units with the specified characteristics, regardless of whether a particular unit incurred an expense for a specific item during the recording period. The average expenditure may be considerably lower than the expenditure by those consumer units that purchased the item. This study is not intended as a comparative cost of living survey as neither the quantity nor the quality of goods and services has been held constant among areas. Differences may result from variations in characteristics such as consumer unit size, age, income levels, etc. Users should keep in mind that prices for many goods and services have risen since the survey was conducted.
In addition, sample surveys are subject to two types of errors. Sampling errors occur because the data are collected from a representative sample rather than the entire population. Nonsampling errors result from the inability or unwillingness of respondents to provide correct information, differences in interviewer ability, mistakes in recording or coding, or other processing errors. The year-to-year changes are volatile and should be interpreted carefully. Sample sizes for the metropolitan areas are much smaller than for the nation, meaning the resulting U.S. estimates are more reliable than those for the metropolitan areas.
Some expenditure components are subject to large fluctuations from one year to the next because these components include expensive items that relatively few consumers purchase each year. Thus, shifts from year to year in the number of consumers making such purchases can have a large effect on average expenditures. Examples of these types of expenses are purchases of new cars and trucks in the transportation component, and spending on boats and recreational vehicles in the entertainment component.
The Metropolitan Statistical Areas (MSAs) and Consolidated Metropolitan Statistical Areas (CMSAs) covered by the Consumer Expenditure Survey represent areas designated by the U.S. Office of Management and Budget and are based on definitions in effect as of December 1992. The general concept of an MSA is one of a large population nucleus, together with adjacent communities which have a high degree of economic and social integration with that nucleus. The following metropolitan areas are discussed in this release:
San Francisco-Oakland-San Jose, CA CMSA which is comprised of Alameda, Contra Costa, Marin, Napa, Santa Clara, Santa Cruz, San Francisco, San Mateo, Solano, and Sonoma Counties;
Los Angeles-Riverside-Orange County, CA CMSA which is comprised of Los Angeles, Orange, Riverside, San Bernardino, and Ventura Counties;
San Diego, CA MSA which is comprised of San Diego County;
Portland-Salem, OR-WA CMSA which is comprised of Clackamas, Columbia, Marion, Multnomah, Polk, Washington, and Yamhill Counties, Oregon and Clark County, Washington;
Seattle-Tacoma-Bremerton, WA CMSA which is comprised of Island, King, Kitsap, Pierce, Snohomish, and Thurston Counties;
Honolulu, HI MSA which is comprised of Honolulu County;
Anchorage, AK MSA which is comprised of Anchorage Borough;
Phoenix-Mesa, AZ MSA which is comprised of Maricopa and Pinal Counties; and
Denver-Boulder-Greeley, CO CMSA which is comprised of Adams, Arapahoe, Boulder, Denver, Douglas, Jefferson and Weld Counties.
The Consumer Expenditure Survey also provides data for the four geographic regions of the country as defined by the U.S. Census Bureau-Northeast, South, Midwest, and West. Data for metropolitan areas presented in table 2 of this release are part of the West region which includes the states of Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.
Definitions
Consumer unit - members of a household related by blood, marriage, adoption, or other legal arrangement; a single person living alone or sharing a household with others but who is financially independent; or two or more persons living together who share responsibility for at least 2 out of 3 major types of expenses - food, housing, and other expenses. The terms household or consumer unit are used interchangeably for convenience.
Complete income reporter - in general, a consumer unit that provides values for at least one of the major sources of its income such as wages and salaries, self-employment income, or Social Security income. Even complete income reporters may not have provided a full accounting of all income from all sources.
Expenditures - consist of the transaction costs, including excise and sales taxes, of goods and services acquired during the interview or recordkeeping period. Expenditure estimates include expenditures for gifts, but exclude purchases or portions of purchases directly assignable to business purposes. Also excluded are periodic credit or installment payments on goods or services already acquired. The full cost of each purchase is recorded even though full payment may not have been made at the date of purchase.
Income before taxes - the total money earnings and selected money receipts during the 12 months prior to the interview date.
Last Modified Date: April 30, 2004
