Monday, January 6, 2014

A Visual Representation of Consumer Expenditures by Household Income

Data from the Bureau for Labor Statistics show that people of all income levels tend to spend similar percentages of their budgets on each expenditure category, with some exceptions. For example, as income rises, Consumer Units (defined as families living together, financially independent individuals, or groups of unrelated individuals who budget jointly) dedicate an increasing percentage of their budget to personal insurance and pensions. Consumers at the lower end of the income spectrum spend a disproportionately higher percentage of their budget on housing costs. But on most other measures, including transportation, health care, and entertainment, the percentages across income levels are fairly equivalent, as shown in the graph below:

But these percentages represent share of total expenditures, and not all Consumer Units are operating with a balanced budget. A comparison of income and expenditures shows that lower income families and individuals tend to spend more than they earn while higher income units are able to stash some of their earnings away. The graphs below attempt to illustrate this:

When you change the denominator in the first graph from Total Expenditures to Annual Income, a more accurate depiction of our spending habits is revealed. Consumers earning between $5,000 and $30,000 per year spend 62% of their income on Housing, 24% on Transportation and 23% on Food. That's 109% of their income gone just on these three basic necessities.

This modified version of the first graphic presented gives a fuller representation of household finances at different income levels in the US and paints a pretty bleak picture for low income families and individuals.



An important question came up in response to the post above: Do the income figures include government assistance programs? The answer is mostly yes.

The chart above shows the percentage of total income by source for consumer units at different income levels. Income includes benefits from programs such as Social Security, the Supplemental Nutrition Assistance Program, and Unemployment Insurance. It excludes benefits that are paid directly to a service provider, such as Medicaid or Housing Choice Vouchers, but those amounts are also excluded on the expenditures.

 The major source of income that is not accounted for here, or in yesterday's graphs, is refundable income tax credits. That mechanism helps close the gap between after tax income and expenditures slightly for lower income households, but there is still, on average, a significant shortfall that must come from a nongovernmental source.

Thursday, January 2, 2014

Anacostia and Its Surroundings: 1892 to Present

If you haven't seen the 1892 Map of Rural Anacostia that Ghosts of DC posted earlier this week, you should check it out.

What first struck me about the map when I saw it was how close the banks of the Anacostia River were to the neighborhood. My knowledge of DC history is minimal, so I did not know that between 1882 and 1927 the tidal marshes along the edge of the Anacostia were filled in, creating what would today appear on a map as Poplar Point.

The graphic below illustrates some of the other physical changes the neighborhood and its surroundings have undergone in the last 120 years. Clusters of single family homes were developed and remain intact in places such as north of today's Good Hope Road (in the Fairlawn neighborhood) and around Morris Road. In the next ring of development, south and east of here, small apartment buildings become the predominant land use. And over time (as early as 1900 with the development of the Nichols School, which is now the Thurgood Marshall Academy), larger footprint buildings sprouted up on and around today's Martin Luther King Jr. Avenue and Good Hope Road.

Future development plans suggest that the next phase of growth will follow a similar trajectory, with moderate densification of the main commercial corridors and substantial expansion into previously undeveloped land, in this case Poplar Point.

Cross-posted on Greater Greater Washington