1 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Apparel vs. Education

Trade-offs in Parental 

Spending on Children:

Arcenis Rojas

Economist

BLS Division of Consumer Expenditure Surveys
2 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Background

 Mark Lino (USDA – 2016): In 2013 a family in 

the Higher Income Level (Income greater than 

$106,500), spent approximately 24% of their 

income on children. By contrast, a family in 

the Lower Income Level (Income less than 

$61,500) spent 17%.
3 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Literature Review

 Omori (2010): Household income and parental 

education determine expenditures on 

education, entertainment, and books.

 Charles (2007): Blacks and Hispanics spend 

about 30% more on visible goods, after 

accounting for differences in permanent 

income. Found that, “This is not really about 

race in the end. It is simply about what we 

observe about you and what peer group you 

belong to.”
4 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Literature Review

 Paulin (2002): Differences in expenditure 

patterns among families headed by single 

fathers vs. those headed by single mothers 

attributable to income, marital status, age.

 Veblen (1899): “Conspicuous consumption of 

valuable goods is a means of reputability to 

the gentleman of leisure," and "failure to 

consume a mark of demerit." 
5 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Sample Description

 Pooled sample of 79,843 Consumer Units 

(CU’s).

Each included at least one child under the age of 

18 who was the child of the reference person.

Used CE Interview Survey data from 2004 to 2015 

Public-Use Microdata (PUMD).

 Excluded CU’s with negative income.
6 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Income Groups

Figures in 2015 $US

Income Quintile Min Max Median Mean Count

Quintile 1 ($2,618.85) $7,996.30 $5,954.55 $5,714.20 20135

Quintile 2 $7,996.58 $11,726.21 $9,857.49 $9,851.92 20134

Quintile 3 $11,726.32 $16,158.93 $13,778.86 $13,839.23 20134

Quintile 4 $16,159.12 $22,944.26 $19,036.93 $19,204.70 20134

Quintile 5 $22,944.38 $385,880.80 $30,028.28 $34,777.28 20134
7 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Expenditure Categories

 Focus on categories that we can reasonably 

assume are directly attributable to children 

under 18 years of age.

Education

Apparel

Child care

 Calculated expenditure shares as shares of the 

total of the above expenditures only.
8 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Expenditure Shares by CU’s 

Income Quintile
9 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Expenditure Shares by Education 

of the Reference Person
10 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Expenditure Shares by Race of the 

Reference Person
11 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Distribution of Race of the Reference 

Person Across Income Quintiles
12 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Calculating Elasticities

 Standard equation



∆Quantity

∆Income

=

∂Q

∂I ×

I

Q

 Calculating elasticity using a Cragg doublehurdle model

Transform distribution using Box-Cox

β1 = Coefficient on total outlays

εd = β1 ×

∂I

∂Q × (

I 

PQ

)
13 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Elasticities

Income Quintile

Expenditures ALL Q1 Q2 Q3 Q4 Q5

Education 1.725 0.899 1.516 1.25 1.32 1.491

Child Care 0.198 0.286 0.079 0.121 0.079 0.148

Apparel 0.279 0.265 0.298 0.252 0.234 0.236
14 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Elasticities by Income Group
15 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Elasticities by Race
16 — U.S. BUREAU OF LABOR STATISTICS TATISTICS • bls.gov bls.gov

Summary

 Our findings support Omori’s finding that 

household income and parent’s education 

affects expenditures on education and books.

 We find that non-whites spend more on 

“visible goods” relative to their total income, 

as posited by Charles, et al., because of the 

distribution of races across the income 

quintiles, but income elasticities of demand 

are consistent across both racial and income 

groups.
Contact Information

17 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Arcenis Rojas

Economist

Division of Consumer Expenditure Surveys

www.bls.gov/cex

202-691-6884

Rojas.Arcenis@bls.gov