Valley splurges on food, drink, cars, looks

Seniors don't fit the description outlined in a new consumer spending survey that shows Valley residents like to go out on the town and drive in style.

Instead, seniors donate more money to charity than those who are younger and also designate a larger share of their money toward health care and reading materials, an economics expert said.

The latest U.S. Bureau of Labor Statistics' Consumer Expenditure Survey examined average spending patterns in 2005 and 2006. Households in the Valley's largest metropolitan area spent an average of $53,570 per year, compared to the national average of $47,421.

"The population in Phoenix is a little bit younger than the average for the rest of the nation as well as for the West region," said Amar Mann, regional economist with the bureau.

But for residents older than 65, who often have fixed incomes, the amount of money spent overall is lower, said Lee McPheters, senior associate dean of the W.P. Carey School of Business and director of the JP Morgan Chase Economic Outlook Center at Arizona State University,

"Since seniors tend to have lower incomes than those age groups still in the labor force, the amount they spend on most items is less. However, in two categories seniors tend to spend a larger dollar amount than persons who are younger, those are health care and cash contributions," he said. "Consumer surveys show that persons 65 and over contribute much higher, close to 40 percent higher, amounts to others, including charity, organizations and other persons."

Valley households spent less than the national average on housing and education, according to the survey. Spending was higher than the national average for food, alcohol, transportation, health care, and personal care products and services.

For seniors, spending on health care was much higher than the national average, McPheters said.

"Senior spending percentage on health care is about three times greater than the average. This is the major item that is different," he said. "The sub categories that drive up senior health spending are insurance, older persons pay more, and drugs and medications. As age increases, spending on drugs increases."

The dollar amount spent on alcohol was $693 in the Valley, compared to $462 for the rest of the country.

"It seems like Phoenix residents do enjoy their food and drink relative to their national counterparts, and of course there's the hot desert weather," Mann said. "Phoenix residents are spending a smaller share of their budget on housing, and perhaps that frees them up to spend a little more money on food and drink, and taking care of themselves and going out."

As far as entertainment goes, seniors have a much greater tendency to spend money on reading materials, McPheters said.

"Seniors spend just slightly lower percentage of income on entertainment, but spend twice as much as the average on reading materials," he said.

Valley residents spent more on transportation than the national average, but that isn't strictly because they have farther to drive, he said.

"It has a lot to do with the types of vehicles that people are buying," Mann said. "Phoenix residents perhaps enjoy finer, better vehicles than people in the rest of the country. In terms of their typical spending, the part of their budget that goes to paying for vehicles is quite a bit higher than the rest of the nation."

McPheters said the spending patterns reflect how younger families are spending their money and using their budgets compared to older cities across the nation.

"The share spent for transportation is higher and of course that's because we've developed as an automobile-oriented economy here, and you don't have to live in Phoenix long to come to appreciate that and understand it," he said. "We spend more on food away from home, and that's probably characteristic of the modern, younger family where you have two people working and that's just kind of a condition of modern life."

The lower spending on education could be attributed to a prevalence of public universities in the area, as well as a higher percentage of the population in K-12 public school, Mann said.

The higher spending on health care likely can be attributed to more workers not receiving health insurance through their employers so they are forced to pay for health care out of pocket, McPheters said.

In general, Valley residents' spending patterns were close to national averages, he said.

"I am surprised to see Phoenix has the same number of vehicles per person as the national average," McPheters said.

"It seems like there's a lot of vehicles out there."

Health care

What the average Valley resident spends a year: $3,134.

What the average American spends a year: $2,716.

Housing

What the average Valley resident spends a year: $16,469.

What the average American spends a year: $15,782.

Food

What the average Valley resident spends a year: $7,187.

What the average American spends a year: $6,022.

Transportation

What the average Valley resident spends a year: $10,964.

What the average American spends a year: $8,427.