Minorities Spending More On Eating Out, Entertainment, Research Shows
ATHENS, Ga.
African American and Hispanic households are devoting a larger share of their discretionary income to eating out in restaurants and entertainment, in part the result of increasing buying power for the largest U.S. minority groups.
A report on minority-buying power recently released by the Selig Center for Economic Growth at the University of Georgia’s Terry College of Business also projects disposable income controlled by minorities will continue growing at a faster rate than that of White households at least through 2009.
Buying power, also referred to as disposable income, is the total personal income available for spending on goods and services after taxes.
As the buying power of African Americans and Hispanics has increased over the past several years, these groups have spent more on dining out and a wide range of entertainment expenses, from pets and event tickets to home entertainment equipment, said Dr. Jeffrey M. Humphreys, Selig Center director and the report’s author.
Humphreys’ observation is based on the most recent data on minority buying patterns available from the U.S. Bureau of Labor Statistics. Between the years 1997 and 2002, African American households increased annual spending on entertainment by 28.9 percent (from an average of $872 to $1,124), while Hispanic households boosted their yearly entertainment budgets by 23.9 percent (from an average of $1,137 to $1,409).
Spending on eating away from home in African American households increased by 43.6 percent (from an average of $1,056 to $1,517 a year) over the same five-year period, with Hispanic households increasing spending at restaurants by 34.3 percent (from an average of $1,506 to $2,023 a year).
Though the average White household still spends more than the average minority household, minorities appear to be closing the gap in terms of the percentage of total expenditures allotted to entertainment and restaurant spending. For example, Hispanic spending on entertainment from 1997-2002 increased from a 3.3 to a 4.1 percent share of expenditures, while non-Hispanic households retrenched from 5.4 to 5.2 percent over the same period.
With a birth rate exceeding the national average and improving employment opportunities, African Americans, Hispanics, Asians and American Indians should all experience above-average growth in buying power over the next five years, Humphreys said.
“The buying power of African Americans, Hispanics, Asians and American Indians is energizing the U.S. consumer market as never before. Today, African Americans have $723 billion in spending power, and Hispanics have $686 billion. These groups’ economic clout is surging, and it is reshaping the commercial and retail landscape of America,” Humphreys says.
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