Sunday, April 30, 2006

Gasoline Matters

Anyone who thinks the media are paying too much attention to every penny increase in the price of gasoline should take a refresher on the rank order of household expenditures. According to my analysis of the Bureau of Labor Statistics Consumer Expenditure Survey, the top six household expenditures in 2004 (the latest data available) are:

1. Food ($5,781)
2. Deductions for Social Security ($3,433)
3. Vehicles ($3,397)
4. Mortgage interest ($2,785)
5. Federal income taxes ($1,519)
6. Gasoline ($1,467)

Gasoline ranks a lofty 6th—and that was in 2004 when the average price of a gallon of gasoline was a bargain at $1.85. As of April 2006, a gallon of gasoline cost $2.91, a 57 percent increase since 2004. Ouch.

MAY 3 UPDATE: Those who grub around in government data like I do occasionally find a mistake—like the one I found in the tax payment lines in the detailed spending tables from the 2004 Consumer Expenditure Survey. The BLS has updated the tables, and the new ranking above shows the corrected data.

Why Homeschool? 

More than 1 million children in the United States were being homeschooled in 2003, according to a newly released report by the National Center for Education Statistics. That's 2.2 percent of the nation's children in kindergarten through 12th grade, up from 1.7 percent in 1999.

Those most likely to be homeschooled: children in the South (2.6 percent), non-Hispanic white children (2.7 percent), children in families with three or more children (3.1 percent), and children in two-parent families with only one parent in the labor force (5.6 percent).  

Concern about the school environment—such as safety, drugs, and negative peer pressure—is the number one reason for homeschooling, according to 31 percent of parents. The number two reason, cited by 30 percent, is to provide religious or moral instruction.  

Thursday, April 27, 2006

More Restaurants = More Pounds

The more restaurants per capita in a state, the greater the weight gain of the state's population during the past 25 years, finds a study by the National Bureau of Economic Research ("The Super Size of America: An Economic Estimation of Body Mass Index and Obesity in Adults," by Inas Rashad, Michael Grossman, and Shin-Yi Chou). In fact, 54 percent of the increase in Americans' body mass index between 1976 and 2000 can be explained by the increase in restaurants per capita.

How does this work? Here's a theory: As fast food has become part of the daily diet, and as the number of fast-food restaurants has proliferated, Americans eat out more and they eat more when they eat out. The increasingly fierce competition among restaurants has created an arms race of sorts, boosting portion size. When people eat out more, they also consume more calories. Average daily intake grew from 1,854 calories in 1977-78 to 2002 calories in 1994-96, say the NBER authors.

According to a report by the National Center for Health Statistics ("Mean Body Weight, Height, and Body Mass Index, United States 1960-2002"), the average woman gained 19 pounds between 1976-80 and 1999-02. The average man gained 17 pounds. But an examination of weight change within cohorts reveals an even more alarming trend. Boomers have put on much more weight than their older counterparts.

Take a look at what happened to boomers. In 1976-80, the average man aged 20 to 29 (born roughly between 1947 and 1956, this cohort includes most of the oldest boomers) weighed 167.9 pounds. By 1999-02, the same man (now aged 43 to 52) weighed 196.0 pounds. During those years, he gained a whopping 28.1 pounds—63 percent more than the average man. This is a much greater weight gain than experienced by older men. Men aged 40 to 49 in 1976-80 (this cohort was born roughly between 1927 and 1936) gained a smaller 11.8 pounds by 1999-02.

For boomer women, the picture is even uglier. Women aged 20 to 29 in 1976-80 gained an average of 32.5 pounds by 1999-02 (when they were aged 43 to 52)—greater than boomer men's weight gain and more than double the weight gain of their older counterparts. Women aged 40 to 49 in 1976-80 gained only 15.9 pounds by 1999-02.

Why have boomers gained so much more weight than older Americans? One factor could be boomer women's greater labor force participation, which resulted in more restaurant meals. And boomers appear to have passed on those eating habits to their children. The average woman in her twenties today weighs 156.5 pounds. That's 21 pounds more than boomer women weighed at their age. The average man in his twenties weighs 183.4 pounds—15.5 pounds more than their boomer counterparts at the same age. If today's young adults gain weight at the same rate as boomers, then the obesity epidemic has only just begun.

Saturday, April 22, 2006

Falling Prices

With gas prices heading ever higher, it may ease the pain to know that a handful of items cost less today than they did nearly a decade ago. The Bureau of Labor Statistics calculates price changes by holding product quality constant. Computers may seem to cost the same amount of money today as they did a decade ago, but you get much more for your money. Holding product quality constant, here is how much prices have fallen for the following items between 1997 and 2006: 

videotape and DVD rentals: -11 percent
ship fares: -29 percent
toys: -29 percent
landline service, long-distance: -33 percent
cell phone service: -35 percent
photographic equipment: -46 percent
personal computers: -89 percent

Wednesday, April 19, 2006

Bet You Didn't Know

Percentage of Americans who are overweight: 65
Percentage of Americans who think they are overweight: 39
Source: Pew Research Center

Tuesday, April 18, 2006

News about Business Owners

It seems to take forever for the Census Bureau to release the data from its Survey of Business Owners, part of the economic censuses fielded by the bureau every five years. The 2002 survey results are flowing now, with the report on black-owned businesses released today. The report shows a 45 percent increase in the number of black-owned firms between 1997 and 2002. The nation's 1.2 million black-owned businesses generated $89 billion in revenue.

The report on the 1.6 million Hispanic-owned businesses was released by the bureau in March. The number of Hispanic-owned firms increased by 31 percent between 1997 and 2002, and they generated $222 billion in revenue in 2002. The report on Asian-owned businesses is scheduled for release soon.

For those who want to analyze the nation's 6.5 million women-owned businesses, the detailed report was released in January. Firms owned by women account for 30 percent of all non-farm businesses in the U.S.

Wednesday, April 12, 2006

Bet You Didn't Know

Hispanics as a percent of the U.S. population: 14
Hispanics as a percent of voters in the 2004 presidential election: 6

Friday, April 07, 2006

Why Worry about Health Insurance?

The latest estimates of health insurance coverage generated by the National Center for Health Statistics can be found in Health Insurance Coverage: Estimates from the National Health Interview Survey, January-September, 2005 (warning: PDF download), and at first glance the numbers appear reassuring. Between 1997 and 2005, the percentage of Americans without health insurance at the time of the survey declined from 15 to 14 percent. Among adults aged 18 to 64, the percentage without insurance stood at 19 percent in both years. Among children under age 18, the percentage without insurance fell from 14 to 9 percent. (Virtually everyone aged 65 or older is covered by the federal government's Medicare system.)

But if you dig more deeply into the report's tables, the alarms start to go off. Health insurance coverage rates have remained stable only because a growing share of people are getting their insurance through public rather than private plans. The percentage of children covered by public health insurance climbed steeply between 1997 and 2005, rising from 21 to 30 percent. Among working-age adults, the percentage covered by public insurance rose from 10 to 12 percent.

Dig even deeper and you arrive at the crux of the problem. Adults with incomes near the poverty level are flooding the public health insurance system as the cost of private health plans spirals beyond their reach. The percentage of near-poor adults aged 18 to 64 with private health insurance coverage plummeted from 53 to 44 percent between 1997 and 2005 (the near poor are defined as those with incomes between 100 and 200 percent of the poverty level). The percentage of the near poor with public health insurance climbed from 15 to 21 percent during those years. (Among their poor counterparts, the percentage with public health insurance grew more slowly, rising from 34 to 37 percent).

Among the non-poor (those with incomes more than twice the poverty level) private health insurance coverage rates fell only slightly, from 87 to 85 percent between 1997 and 2005. But how long will it be before even the middle-class cannot afford private health insurance? With the federal government threatening to pare back spending on public insurance, millions of Americans may soon join the ranks of the uninsured. The near poor may be the canary in the coal mine, signaling the imminent breakdown of our health insurance system.

Tuesday, April 04, 2006

Cutting the Landline

A new survey of cell phone use, How Americans Use Their Cell Phones, by the Pew Internet & American Life Project, the Associated Press, and AOL confirms trends documented by the Bureau of Labor Statistics Consumer Expenditure Survey. Young adults are increasingly dependent on cell rather than landline phones. 

A small number of Americans use cell phones only—perhaps 7 to 9 percent, according to the cell phone survey report. Those who do are disproportionately under age 30. The figure may grow—and rapidly. Among 18-to-29-year-olds who use landlines, a substantial 40 percent say they are somewhat or very likely to give up their landline in the future. Among adults aged 30 or older, only 19 percent say they are somewhat or very likely to cut the landline. 

According to unpublished data from the 2004 Consumer Expenditure Survey, householders under age 25 spend 51 percent more on cell phone than landline service. Among 25-to-34-year-olds, cell phone spending is below landline spending, but not by much. Of course spending more on cell than landline service is different than giving up a landline altogether. The cell phone survey shows that those with cell-only service are disproportionately poorer than other households and have probably given up their landline to save money. 

Will the profile of cell-only users become more upscale in the years ahead? That depends on the decisions made by today's teens and young adults when they establish their own households. But there's no doubt that cell phone spending will soon surpass landline spending. In 2004, households spent $69 billion on landline service (down from $91 billion in 2000, after adjusting for inflation) and $44 billion on cell phone service (up from $14 billion in 2000). At those rates of change, the crossover could occur this year.