Age at which Americans Will Stop Driving

Most automobile owners in the United States do not plan on giving up driving—ever. Sixty-two percent of the nation's drivers say they will continue to drive for the rest of their life, according to an AARP survey...

"At what age do you think you will stop driving?"
Age 60 to 75: 12%
Aged 76-plus: 24%
Never stop driving: 62%
Refused to answer: 2%

Among drivers who say they will stop driving, the average age at which they will turn in their keys is 78 for both Millennials and Gen Xers. Boomers say they will stop driving at an average age of 82.

Source: AARP, Boomers Going the Distance: 2018 Consumer Insights on the Driving Experience

Stocks Account for Bigger Share of Wealth

Stocks are a growing share of the wealth of middle-aged Americans, according to an analysis of the Survey of Consumer Finances by the Federal Reserve Bank of St. Louis.

In 2016, stocks accounted for 11 percent of the net worth of householders aged 41 to 60, more than double the 4 percent of 1989. Vehicles also grew in importance, with their share of the household wealth of the middle-aged rising from 14 to 19 percent. In contrast, the share of net worth accounted for by the principal residence of middle-aged householders fell from 46 to 37 percent during those years.

Despite the rising importance of stocks to the middle-aged, stock ownership is increasingly concentrated among the wealthy. In 2016, fully 78 percent of the stock market wealth of middle-aged Americans was owned by the wealthiest 10 percent of households—a record high.

Source: Federal Reserve Bank of St Louis, How Has Stock Ownership Trended in the Past Few Decades?

56% Do Not Want to Ride in a Driverless Vehicle

When Americans are asked whether they would ride in a driverless vehicle if given the chance, the naysayers outnumber the yaysayers. The 56 percent majority of Americans aged 18 or older would say no to riding in a driverless vehicle, according to a Pew Research Center survey, and 44 percent would say yes. Here are the not-so-surprising demographics of those who would say yes...

Percent who would want to ride in a driverless vehicle
Men: 53%
Women: 35%

Under age 50: 51%
Aged 50-plus: 35%

College graduate: 56%
Some college: 44%
High school or less: 33%

Urban: 52%
Suburban: 40%
Rural: 36%

Why are so many people hesitant to ride in a driverless vehicle? The single biggest reason, cited by 42 percent according to Pew, is lack of trust in technology/unwillingness to cede control to a machine. Before you wring your hands in despair over America's Luddite majority, keep in mind that if Pew had been around to survey the public about horseless carriages, the naysayers likely would have been just as numerous and for the same reason.

Source: Pew Research Center, Automation in Everyday Life

Vehicle Purchases in Past 12 Months

How much do Americans love cars? They love them so much that one in four adults (or their spouse or partner) bought a car or truck in the past 12 months, according to a Federal Reserve Board survey. Among car/truck buyers...

• 38% bought a new vehicle. Nearly half of high-income buyers, with household incomes above $100,000, bought a new vehicle (47 percent). Among low-income buyers, with household incomes below $40,000, only 27 percent bought new. 
• 35% bought a used vehicle from a car dealer, with little variation by household income.
• 17% bought a used vehicle from a private seller. Only 6 percent of high-income buyers bought a used car from a private seller versus a substantial 31 percent of low-income buyers.
• 9% leased a vehicle, with little variation by household income.

Source: Federal Reserve Board, Report on the Economic Well-Being of U.S. Households in 2015

Peak Transportation Spending

Has household spending on transportation peaked? It looks that way. The average household devoted 17.5 percent of its budget to transportation in 2013-14. While this is more than the Great Recession low of 15.6 percent in 2008 (the smallest since the early 1960s), it remains well below the 19-plus percent of the 1980s and early 2000s.

Transportation is our second biggest expense. In 2013-14, the average household devoted $9,104 to transportation, most of it for vehicles and gasoline. The evolution of this major household expense has been documented by the Bureau of Labor Statistics' consumer expenditure surveys. In the earliest, taken in 1901 and 1918-19, there was no separate spending category for transportation, so minor was the expense. As cars became common, transportation became a category. In 1934-36, transportation consumed 8 percent of average household spending. At the time, 40 percent of households owned a vehicle. The figure climbed over the decades, peaking in 2008 at 89 percent. In 2013-14, a smaller 87 percent of households owned a vehicle. The average number of vehicles per household fell to 1.8, down from 2.0 as recently as 2009.

With households holding on to their vehicles longer (the average age of light vehicles is now 11.4 years, up from 9.1 in 2000), greater fuel efficiency, increased urbanization, and the rise of ride sharing services, it looks like peak transportation spending may be in our rearview mirror.

Source: Demo Memo analysis of Bureau of Labor Statistics' Consumer Expenditure Surveys

Autos Are Aging

The nation's automobiles are rapidly aging, according to an analysis by the Bureau of Labor Statistics. In 2012, the average age of the nation's cars, vans, and SUVs was 11.3 years. This is up from 10.2 years in 2007. But the small uptick in average age masks the marked change in the age distribution of the nation's vehicles.

• In 2012, only 15 percent of the automobiles owned by American households were new-to-five-years-old, down from 23 percent in the 2000-to-2007 time period.
• In 2012, the 52 percent majority of vehicles owned by American households were at least 11-years-old, up from 44 percent in the 2000-to-2007 time period.

Interestingly, annual vehicle maintenance costs do not vary all that much by age of vehicle. Americans spend an average of $437 a year maintaining new-to-5-year-old automobiles. Spending peaks at $588 a year on 6-to-10-year-old vehicles. The oldest vehicles, at least 26-years-old, cost an average of $502 in annual maintenance.

Source: Bureau of Labor Statistics, Americans' Aging Autos

Many Renters Have No Car

Percentage of households without a vehicle by homeownership status...
Total: 9%
Owners: 3%
Renters: 20%

Source: Census Bureau, 2012 American Community Survey

Student Debt Has Consequences

Student loans are crowding cars and homes out of the lives of young adults, according to a Liberty Street Economics analysis by Meta Brown and Sydnee Caldwell of the Federal Reserve Bank of New York.

In their analysis, Brown and Caldwell track the decline of mortgage debt held by 30-year-olds and auto debt held by 25-year-olds. Both have plunged, particularly among young adults with student loans. In fact, young adults with student loans are now less likely to have either mortgage or auto debt than those without student loans--a reversal from the pattern prior to the Great Recession.

Young adults with student loans have been shedding other debt as their student loans grow. Between 2003 and 2012, the percentage of 25-year-olds with student loan debt climbed from 25 to 43 percent, and the average amount owed grew from $10,649 to $20,326. But the refusal--or (perhaps more important) inability--of these 25-year-olds to buy cars and houses has resulted in a decline in their other debt. This decline has been greater than the increase in their student loans. Consequently, 25-year-olds with student loans reduced their overall debt by $5,687 between 2008 and 2012. That's good news for them, but bad news for the nation's automotive and housing industries.

Source: Federal Reserve Bank of New York, Liberty Street Economics, Young Student Loan Borrowers Retreat from Housing and Auto Markets

Pedestrians Killed by Motor Vehicles

The next time you dash across a busy street, think about this: between 2001 and 2010, an astonishing 47,392 pedestrians were killed by motor vehicles. That's 1.58 deaths per 100,000 people per year.

Not surprisingly, the pedestrian death rate is higher in large metropolitan areas (2.01 deaths per 100,000 people per year) than in small metros (1.38) or nonmetropolitan areas (1.47). Males account for a disproportionate 7 out of 10 pedestrians killed by motor vehicles, and the male death rate is more than twice the female rate (2.29 versus 0.92).

Interestingly, among both males and females the risk of pedestrian death rises with age. It peaks among men aged 85 or older, at 6.35 per 100,000 men in the age group—more than three times the overall rate. Behind the higher pedestrian death rate of older Americans is the fact that "older adults take longer than younger adults to cross roadways," says the CDC. Also, older adults are more likely to die from their injuries, and cognitive declines may cause older adults to take greater risks. Knowing these facts may make you a bit less impatient the next time you sit in your car waiting for an elderly pedestrian to hobble across the street.

Source: CDC, Motor Vehicle Traffic-Related Pedestrian Deaths -- United States, 2001-2010

Motor Vehicle Death Rate Plunges among Teens

Are these statistics yet more evidence that helicopter parenting works? The motor vehicle traffic death rate among 15-to-19-year-olds plunged between 1999 and 2011, falling by an astonishing 49 percent among males and 52 percent among females, according to the CDC.

Heavy Traffic

The worst part about traffic congestion is not the stop-and-go, delays, or wasted gas, but the unpredictability of it all. If you need to be somewhere at a certain time, you don't know how long your trip will take, forcing you to add extra travel time to your schedule.

That's called Planning Time as opposed to Travel Time, according to Texas A & M Transportation Institute's 2012 Annual Urban Mobility Report. The Transportation Institute has not only named this annoyance, but also measures it using the Planning Time Index or PTI. If your trip has a PTI of 3.00, that means you have to schedule 60 minutes for a trip that would take 20 minutes in light traffic if you want a 95 percent chance of getting there on time.

Average PTI varies by size of metropolitan area from a high of 4.08 in metro areas with populations of 3 million or more to 2.09 in metros with fewer than 500,000 residents. The most unpredictable commute is in Washington, D.C., which has a PTI of 5.72. In other words, when traveling the freeways around Washington, D.C., you have to multiply the estimated commute time in light traffic by six (!) to have a 95 percent chance of getting to your scheduled appointment on time.

Falling Asleep while Driving

This is scary. According to a study by the CDC, there are a lot of drowsy drivers on the road--and admittedly so. Fully 4.2% of Americans aged 18 or older say they have fallen asleep while driving in the past 30 days. By state, drivers in Texas are most likely to fall asleep at the wheel, with 6.1 percent doing so in the past month.

Source: CDC, Drowsy Driving--19 States and the District of Columbia, 2009-2010

No Vehicles

Nine million households in the United States do not own a vehicle, or 8 percent of the nation's 115 million households. Here are the percentages of households without a vehicle, by selected characteristics of the householder...

Homeowner: 2.8%
Renter: 18.8%
Black: 18.9%
Hispanic: 11.3%
Poor: 23.8%
Northeast: 16.0%
Midwest: 7.0%
South: 6.4%
West: 6.0%
Central city: 15.8%
Suburb: 5.0%
Nonmetropolitan: 5.2%

Source: Census Bureau, 2011 American Housing Survey

How People Get to Work

The Great Recession did little to change the way people get to work and the time it takes to get there. Average travel time to work was 25.5 minutes in 2011--about the same as the 25.3 minutes of 2007, according to the American Community Survey. This is how people got to work in 2011 (and in 2007)...

Drove alone: 76.4% (76.1%)
Carpooled: 9.7% (10.4%)
Public transportation: 5.0% (4.9%)
Walked: 2.8% (2.8%)
Other means: 1.7% (1.7%)
Worked at home: 4.3% (4.1%)

Source: Census Bureau, American Community Survey

Looking for Clues in the ACS

Last week the Census Bureau released 2011 American Community Survey data. The data dump includes tables comparing the social and economic characteristics of the U.S. before, during, and after the Great Recession--from 2007 through 2011. Some of the statistically significant changes provide clues about the direction of the housing market and the ongoing struggles of the American people...

• The percentage of households without a vehicle has climbed steadily, growing from 8.7 percent in 2007 to 9.3 percent in 2011.
• The percentage of owner-occupied housing units with a mortgage has fallen by 2 percentage points--from 68.4 percent in 2007 to 66.4 percent in 2011.
• For homeowners with a mortgage, monthly owner costs have fallen from $1,725 in 2007 (in 2011 dollars) to $1,486 in 2011--a 14 percent decline.
• Although the number of renters has grown, median monthly rent fell from $926 in 2007 (in 2011 dollars) to $871 in 2011--a 6 percent decline.
• Although median rent has been falling, the share of renters who devote 35 percent or more of their household income to rent grew from 40 to 44 percent between 2007 and 2011.

Source: Census Bureau, American Community Survey

How Weather Affects Buying

We just can't help ourselves. Whatever we are thinking, doing, and feeling at the moment holds great power over our decisions. That's the finding from a National Bureau of Economic Research study of how the weather at the time of purchase influences which car or house we buy.

It's hard to argue with the analysis, which is based on data from more than 40 million vehicle sales and 4 million house sales, comparing the type of car or features of the house purchased to the weather at the time of purchase. The researchers find that "the choice to purchase a convertible, a 4-wheel drive, or a vehicle that is black in color is highly dependent on the weather at the time of purchase." Similarly buyers are more likely to choose a house with a swimming pool in the summer than in the winter.

Source: National Bureau of Economic Research, Projection Bias in the Car and Housing Markets, NBER Working Paper No. 18212 ($)

Interest in Cars

How can American businesses be so dumb? Don't they ever pull their head out of their niche to take a look around? Apparently not, which is why so many businesses have allowed their customers to be sweet talked into spending all their money somewhere else.

The latest example: Car manufacturers are bemoaning the fact that young adults have "lost interest" in cars, according to the New York Times. To think that young adults have lost interest in cars is a failure to understand the market. Young adults are spending their money elsewhere not because they have lost interest in cars, but because they have gained interest (payments) on student loans all the while coping with double-digit unemployment rates.

The decline in overall vehicle spending among young adults has been stunning. In 1984 (the earliest data available), householders under age 25 devoted a hefty 24 percent of their expenditures to vehicles and vehicle expenses, according to the Consumer Expenditure Survey. By 2010, the figure had fallen to 16 percent. Spending by young adults on new cars has collapsed. In 2010, the average householder under age 25 spent only $393 on new cars, down from $1,114 in 1984 after adjusting for inflation.

It is no coincidence that the additional dollars the average young adult has had to devote to education (up by $710 between 1984 and 2010, after adjusting for inflation) is almost identical to the dollars they no longer spend on new cars ($721).

Debt of the Foreclosed

According to a study by the Federal Reserve Board, individuals who have had foreclosure proceedings begin against them had the following characteristics...

Average age: 42
Median credit score: 562

Median mortgage balance: $152,901

Median credit card balance: $3,498

Median auto loan balance: $15,728

Source: Federal Reserve Board, The Post-Foreclosure Experience of U.S. Households, Raven Molloy and Hui Shan, 2011-32

Cars in New York

Percentage of households in the New York metropolitan area
without a car, truck, or van: 40%.

Source: American Housing Survey for the New York Metropolitan Area: 2009

The Mystery of the Billboards

On a recent road trip, with nothing better to do, I decided to count and categorize every billboard on my side of the highway for a stretch of interstate the length of one state. I did this on the return trip as well. The total distance of my billboard census was 210 miles, and the total number of billboards was 202. While not representative of billboards nationally, the results do raise disturbing questions. Here is what I saw:

	number	percent
Total billboards	202	100.0%
Land for sale	23	11.4%
Home/office for sale/rent	21	10.4%
Motels	20	9.9%
Outlet malls	20	9.9%
Blank billboards	15	7.4%
Restaurants	12	5.9%
Radio/Internet/television	8	4.0%
Vehicles	8	4.0%
Alcoholic beverages	5	2.5%
Gas or gas/restaurant combos	5	2.5%

The remaining billboards, with one to four in each category, were a hodgepodge that included medical services, churches, events, household furnishings, home improvement, camping/RV, community promotions, exit promotions, antiques, flea markets, military recruitment, public health, service organizations, department stores, clothing, lawn and garden supplies, insurance, banks, boats, docks, food products, and museums.

Observations: 

1) Most billboards looked faded and yellowed. Did the business still exist? 

2) Most billboards were difficult to read. Few communicated their brand.
3) Of the 20 billboards for outlet malls, 19 were for a single mall.
4) Among the 202 billboards, only 6 were digital.

Questions:
1) Are GPS devices and smart phones undermining the billboard industry?
2) Why are so many billboards selling things that nobody wants? Is this an advertising medium of last resort? One in five billboards was selling real estate in one form or another. A large proportion of billboards were blanks or advertising their own space.
3) Is the sorry state of billboards an indicator of a crippled economy, the slow descent of portions of America into third-world status? Are rural stretches of the United States hollowing out, leaving the lamest businesses behind as creativity and gumption move to urban centers?

Just asking.