Americans spending a smaller share of income on food

The percentage of income that Americans spend on food continues to drop. In 1992, Americans spent just 11.7 percent of their income on food, down from 14.2 percent in 1980. The decline mainly reflects incomes rising faster than food prices. Between 1980 and 1992, overall food prices rose 59 percent. During that time, per person income rose 94 percent (from $6,916 to $13,398).

The dollar amount of food spending nonetheless continues to rise, but at the same rate (59 percent) as food prices. (Therefore, the numbers indicate that Americans bought about the same amount of food in 1992 as in 1980.) Between 1980 and 1992, annual spending for retail food (food consumed at home) rose 55 percent (from $667 per person to $1,031) and nearly 69 percent (from $318 per person to $536) for foodservice (food away from home) (table 1). Likewise, prices for food away from home rose more than for food at home, 69 percent compared with 55 percent.

However, these national averages mask some underlying differences that occur among households of different types and sizes. For example, rural Americans spent about the same as their urban counterparts on food at home but somewhat less on food away from home.

These findings are gleaned from a continuing survey of households conducted by the Bureau of Labor Statistics. The detailed statistics presented in this article are based on the urban portion of this sample, a group which has been surveyed continuously since the survey was initiated in 1980 and which represents about 87 percent of the noninstitutionalized population. (The rural population was not sampled during some of the early years of the survey.)

Larger Households Spend Less Per Person

The most important determinant of household food spending is the number of household members. Larger households tend to spend more in total dollars but less per person (table 2). In 1992, one-person households spent more than twice as much per person on food ($2,146 per person) than did households composed of six or more people ($878). Larger households tend to spend less per person because they purchase more economical packages, have younger children who tend to eat less, and spend more on groceries than on food away from home. One-person households spent a much larger share of their food budget on food consumed away from home: 42 percent compared with 20 percent for larger households.

Household size also affects the mix of food spending. For example, larger households tend to be more frugal and spend a larger share of their at-home food dollar on basic ingredients and lower cost items, such as cereal products, fluid milk, and ground beef, and a smaller share on bakery products and fresh and frozen seafood. The larger households also tend to have more young children and teenagers, which also affects the mix of foods and helps to explain why larger households spend a much smaller share on fruits and vegetables and adult beverages (such as coffee).

Composition of households is another important factor. Married couples without children spent about the same amount per person as did one-person households. Single mothers with children spent about half as much per person as one-person households. Married couples with children spent more per person as their children got older, but their expenditures still tended to be lower than those for married couples without children.

Wealthier Households Spend More

Food spending increases with household income for both food at home and food away from home, as wealthier households buy higher quality food items and more convenience foods. In 1992, households in the poorest 20 percent of the Nation's income distribution (household income averaging $6,669) spent $1,249 per person on food, compared with $1,997 for the wealthiest 20 percent (household income averaging $77,311).

As expected, wealthier households tended to spend more money and a larger share of their food budget on food away from home. The poorest group spent 24 percent of their food budget on food away from home, while the wealthiest group spent 40 percent. Spending on food away from home showed little change for all income groups between 1988 and 1992, increasing [TABULAR DATA FOR TABLE 1 OMITTED] only 12 percent for the highest income group, 5 percent for the lowest income group, and declining slightly (2 percent) for the middle group.

Spending on food at home rose about 30 percent in all income groups between 1988 and 1992. However, each group allocated its money differently [ILLUSTRATION FOR FIGURE 1 OMITTED]. Households with the highest incomes increased their spending on fish and seafood by about 47 percent in 198892, while these purchases by the lowest income group increased only 13 percent, widening the already marked gap in spending for this food group. In 1992, the highest income group bought $48 worth of fish and seafood per person, while the lowest income group spent $26 per person.

Fruit and vegetable expenditures increased between 21 and 28 percent for all income groups between 1988 and 1992. Those with the highest incomes increased their spending on fresh vegetables by twice as much as did the lowest income group, up 34 percent to $64 per person in 1992 for the highest income group, versus a 17-percent increase for the lowest income group to $50 per person. Conversely, the lowest income group increased its spending on processed vegetables by 43 percent, compared with a 38-percent increase by the highest income group.

The lowest income group increased its spending on sugar and sweets at a faster rate between 1988 and 1992 than did the highest income group (45 percent versus 31 percent), but the total spending level for this group remained substantially below that of the highest income group in 1992 ($46 per person versus $35).

Table 2
Larger Households, Those Headed by Single Mothers, and Black
Households Spent the Least per Person on Food

Since 1988, rural consumers increased their food spending at a slightly faster pace than did urban consumers for both at home and away from home. Spending for food away from home rose about three times as much for rural consumers than urban consumers between 1988 and 1992 (16 percent versus 5 percent), but the rate was substantially less than that for food at home (up 25 percent for urban consumers and 27 percent for rural consumers).

Of all the food items, spending on poultry increased the most, up about 59 percent for rural consumers and 47 percent for urban consumers. However, the higher expenditures by rural consumers did not catch up to the level that urban consumers spent on poultry in 1992 ($43 per person versus $50).

Spending for fruits and vegetables tended to increase at about the same rate for urban and rural consumers, about 16 percent each. However, rural consumers tended to increase their spending on processed products, while urban consumers spent their money on fresh products.

The authors are agricultural economists with the Food and Consumer Economics Division, Economic Research Service, USDA.

COPYRIGHT 1996 U.S. Department of Agriculture
COPYRIGHT 2004 Gale Group