May 06, 2008
American Consumer Spending and Inflation - a beautiful visualization from the NYTimes (who consistently crank out the best infovis of any commodity source). More on the math behind this kind of map.
* Why are men's clothes so inelastic?
* Gas + insurance + ongoing costs >> car + maintenance + asset costs
* 2.4% on Hotels+Vacation Homes?!!?
* I was astonished at the fraction of of the health care costs alloted to Prescription Drugs. 1.6% of your budget goes to the drug store, 1.3% each to the doctor & the hospital, 0.5% to the insurance company.
* Look at how expensive Funerals are.
* We spend more on Clocks and Lamps than on Major Appliances.
Sometimes it's not so pretty.
I think the spending on major appliances vs clocks and lamps has something in common with the inelasticity of men's suits: low replacement rate. Your major appliances are supposed to last about 20 yrs, but (e.g.) i have probably had to buy at least one clock or lamp in each apt/house I have had in the last 10 years (~5). Double that (or more for people moving to larger houses and requiring more lights/clocks), and voila, (clocks + lamps ) > one washing machine. Hm, I wonder if this went up with the housing bubble...
For the men's suits, I conjecture that they don't go out of style as quickly as women's suits (and/or men are less likely to change sizes?), so consumption similarly averages out, as opposed to, say 1992, when every working woman realized she needed to replace all of her suits with h-u-u-u-g-e shoulder pads IMMEDIATELY. Not sure if you were including shirts and slacks in there, mrflip, since they show a larger % change than dresses. Or perhaps it was an observation on absolute, not comparative, terms? I'll be curious to see whether spending on TVs bumps when analog gets cut, or whether everyone already has at least one compatible set.
On funerals: comparable to eyeglasses. Doesn't seem like that much to me. Where's the weddings category??
Also, I'm curious to know why spending on pigs is down across the board, while chickens and cows are up. Has the price of pork & bacon gone down, or are people just eating less of it? I just find it odd b/c the big food story in China last year/early this one was how pig was in high demand and prices were rising too quickly. Eggs, however, remain cheap.
Also, high and elementary school tuition: (1/3) of what we spednd on college tuition? Has the country really lost faith in public secondary education to that degree? No child left behind, ineed.
This would be great with a time dimension, so we could really see how things grow.
So some things will be blue because they are getting cheaper from the supply side: computers (sim. yellow, more expensive gasoline). Others will be blue because they have elastic demand and households will spend less on them: cosmetics and perfumes, clocks and lamps.
If I understand the agronomics, I think pork is getting cheaper from the supply side. People eat the same amt of it but it costs less relative to other meat, because you can feed a pig anything -- if wheat skyrockets you can feed them corn, etc. Perhaps vanalin will weigh in.
I think you're right about men's clothes being more long-term. But I think another reason spending on women's clothing is dropping is demand-side elasticity from a larger fashion premium. That is, apart from a faster fashion cycle there's also more room to reduce frequency and brand (marketing) spending. Maybe you can get by with Ann Taylor instead of DKNY shot in the dark on relative brand desirability or just not buy one this month. By and large, I think the stereotype is true: men buy clothes because they gotta, women because they can. (Household spending on women's clothing is more than 50% larger than on men's, even before any surface-area adjustment.) So men's clothing will be much less demand-elastic than women's.
I have no HDTV. I think this is one of the more craven outrageous rent-seeking boondoggles to be visited on the American people since, I dunno, that one time when WE GAVE THE NETWORKS PERMANENT LICENSES WITH NO ONGOING FEES.
Funerals: each person only pays for one every 80 years! With a 4-person household and an 72-80yr TTL, you're talking an amortized 3.5-4% fraction of your yearly total household budget. That's a lot.
Elementary tuition: I wondered about this -- how much of that is spent on 'sunday school' (i.e. supplemental religious school)?
And where are "Charitable donations" and "Religious Tithing" (or whatever you call it). Is this not counted in the CPI?
Did the "price" of tithing go up? Since almost all of these things are consumer goods which have a marketplace price, I don't think charitable donations have a place because there is no "selling price" for them. Certainly the amount of charitable giving is an important figure to monitor but I don't think it belongs in an inflation index.
Also, the category was Clocks, Lamps, Decorations which led me to assume that this was anything bought for home display which does not fit into the other categories (e.g. furniture). I'm not surprised to see that category is pretty big if it's kind of a catch-all.
Two quibbles on funerals for mrflip: (1) while I understand your reasoning (1 funeral per person), in most cases you are not arranging or paying for your own funeral. Which means that you get guilted into not skimping (also that an only child is likely to pay for two, assuming 2 parents, but oboviously still not a regular expense). Your point is still taken, which is to say that the price of a coffin is surprisingly high, considering that its primary user is completely unaware of its qualities, but I remember this being deemed a racket, or "trend" a while ago -- funeral directors pushing larger, fancier coffins, while giving speeches about how you'd really be sending your loved ones off in comfort. So how many grieving people do you think say "nah, pack Mom in the wood box, forget the silk lining and the makeup"? (I wonder how much funeral plots cost, incidentally.) And you're even supposed to pick a coffin for cremation. (If you're feeling outraged, might I suggest donating your body to a med school? :)
(2) Depending on how you're using "budget," I would argue that you're thinking about a lot of this the wrong way. It's .2% of expenditures (or even better, as natedogg pointed out, purchases), which doesn't count savings or charitable donations. Which over 50 yrs adds up, to be sure, but I still maintain it wouldn't come close to the dent made by the "average" wedding.
on the private school thing: You do pay for private high/elementary school for 12 years, and college for four (hopefully), so that would skew the elementary figure upward
I thought this chart showed total household spending, but yup, it's only things that are in the CPI bucket. My bad.
I still don't know what 'admissions' means.
Did someone say agronomics? I think the lower spending on pork is more likely due to public perception of that type of food than supply side costs, (this may change though as food prices rise) But right now there is a huge push to jump on the "healthy eating" bandwagon and in the minds of most people pork=fatty and therefore bad for you where chicken and lean beef is viewed as "healthier".
It is true that pork supply side is cheaper than beef production, for a variety of reasons: eg pigs are a litter bearing species, therefore the costs associated with keeping one female yields many young where with cattle it's really a one for one deal, chickens would follow that logic too, one chicken can lay a lot of eggs for more chickens. Reproductively pigs and chickens are more efficient in this manner. Also vet services, feed volumes, land requirements, etc are all higher for cattle than pigs and chickens.
Sorry Flip your argument of feedstuff type is not vaild. Cattle are ruminants, they can extract nutrition from any fibrous plant material. Contrary to popular belief (that most cattle live their pitiful lives at livestock auschwitz) most cattle in this country spend the majority of their lives at a cow/calf operation owned by Ma and Pa Kettle then they are sold at weaning to another family run pasture-based or grain/forage mixed (at this point the feed ratio is still going to be heavily forage) ranch till they are close to slaughter weight, then they are sold to the ubiquitous feed lot where they will spend a few months on a high concentrate diet to rapidly get them to kill weight. Cattle are far more of a non-specific eater than pigs when you are talking about fibrous feedstuffs. When you are looking to fatten them rapidly at the feedlot, just about any cheap concentrate (grain) will do.
The porcine digestive tract is a lot like ours. They don't get much nutrition from fibrous plant material. Cattle get nutrition from fibrous material and concentrates. You can dick around with a lot more creative feedstuff options with cattle than you can with pigs. That's not to say a pig won't happily shove almost anything into it's maw, but when you're a food animal producer you want that critter to eat what's most effective at getting that critter to turn that feedstuff into the type of feedstuff that mostly hairless apes like to eat, meat.
The pig business is very vertically integrated now a days which is also why pig production is a cheaper supply side proposition. But I really don't think the lower demand for pork is about the supply side of the equation, I think it's more about consumer perception of the product which is actually kind of ironic cause pig breeders have been breeding leaner pork for years.
Oooh,oooh, agronomist in the house? Q for Vanalyn -- have you read An Omnivore's Dilemma, and if so, what did you think? Is Pollan generally accurate in making his points, or really exaggerating certain aspects? (I just finished reading it, so I am an inquiring mind.)
Not specifically an agronomist, just have a degree in animal sci and management from UCD, so yeah animal ag background. I haven't read it but have heard "things" from it from people that make me frown for the inaccuracies and perpetuation of some agricultural myth, but I don't know if it's the readers' interpretations or the actual author.
What I've heard about it from others is what has made me not want to read it as I suspect it may piss me off and I have to deal with plenty of other things in my work day that piss me off thus I don't really want to be pissed off in my free time. Having come from a non-traditional ag background (I was a suburban kid) I am WELL aware of what the general public believes about agriculture and agricultural practices and having had first hand experience with agricultural producers and practices through my educational path (I've been to farms, I've been to feed lots I've been to slaughter houses), that warped very slanted perception which has historically been driven by activist groups and now is increasingly being driven by organic/natural food marketers and that percpetion REALLY chaps my hide so to speak. But I may have to read it though so I actually can comment on it intelligently.
Going back to the original question of "why is pork demand lower than chicken and beef?" There is also the fact that American's are just culturally biased towards chicken and beef. Marketing plays a role in that bias but it's also a traditional one. Think about it. Asian cooking utilizes pork a lot more than western style cooking. Sure BBQ is rather pork friendly but how many other popular cooking styles in the US use pork much? If you're planning a dinner around a meat option how often is that meat pork? I'm sure it's probably more often chicken or beef. Likewise in restaurants you don't see a whole lot of pork entree' choices typically. Is there a good reasonable reason for that? Not really. Very little to do with food preference is about reason.
I agree completely with Vanalyn's comment about pork being in a separate class as far as typical American demand goes but I'm still curious (with mrflip) about why pork didn't price trend with chicken or beef over the last year.
Googling "pork prices 2008" comes back with this article which predicts 2008 will be one of the worst years for pork prices/profits in a decade. Their reasons are 1) feed is more expensive than ever (effects of corn ethanol?) and 2) too many hogs. Those may be reasons but it doesn't explain why the same thing isn't hitting other livestock. I don't know if the last statement is telling:
"They say it is darkest before the dawn, but the dawn will not be in sight until pork producers reduce production to better align with this new high cost era," Hurt concludes.
Have pork producers been less nimble in accomodating changing market realities?
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While we're on the subject:
* please stop using rainbow color scales (via). Thanks.
* Obama/Clinton Decision Tree. This is such a simple graphic, but it's really powerful: use econometrics to pick off the explanatory variables one by one, and construct the tree to a reasonable depth. I bet if you played with the spatial structure, or adorned each node with an unobtrusive segment chart, you could convey the relative strength of each descriptor. I'd love to see these graphs for each of the Freakonomics studies.
posted by mrflip at 05:12PM CST on May 06