Does electricity take a larger share of Americans’ budgets than in 1984?
This week's columns have analyzed the brand new Labor Department data on how much American households spent on everything during the year ending June 2015, including electricity.
The semi-annual Consumer Expenditure Survey is the source for understanding Americans' electric bills by region, income, age, urban/rural, etc. The government actually asks many thousands of households each quarter to track every single purchase. The credibility and detail, especially through mining the micro-data, is unequalled.
Today, we ask, does electricity take a larger share of Americans' household budgets than thirty-two years ago in 1984?
The Consumer Expenditure Survey, in its modern form, started in 1984.
In the year ending June 2015, electricity cost the average US household $1,467. This amounted to 2.14 percent of households' average income before taxes and 2.67 percent of their total expenditures on all goods and services.
Thirty-two years ago, in 1984, electricity cost the average US household $629. This amounted to 2.68 percent of households' average income before taxes and 2.86 percent of their total expenditures on all goods and services.
In 1984, few households had computers or central air conditioning. Perhaps a third of all homes didn't have air conditioning at all.
Yet a significantly higher percentage of income and total expenditures went to paying for electricity in the year 1984 than the year ending last June. Twenty-five percent more in terms of income and seven percent in terms of total expenditures.
We now use electricity far more, but pay less. Nice.
You may have wondered why the Labor Department reports that 2.6 to 2.7 percent of total expenditures pays for electricity these days while the Commerce Department reports that 1.5 percent or so pays for electricity (as this column periodically discusses). It's because the Commerce Department figures in all consumer expenditures made by consumers themselves plus all expenditures made on their behalf. Such as insurance companies and the government paying your medical bills.
Public Utilities Fortnightly dives below the surface of the data from multiple sources to show how Americans really use electric and natural gas utility service, and how much they really pay and value it.
Steve Mitnick, Editor-in-Chief, Public Utilities Fortnightly
E-mail me: email@example.com