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Luxury or Necessity?

What products can’t you live without?

Chances are, your answer to that question in 1973 would be very different from your answer today. In response to coverage of strapped households, a reader points us toward the Pew Research Center’s 2006 report on what kinds of goods Americans consider “necessities” versus “luxuries.” The results show that, as their incomes rose, Americans have gotten somewhat needier over time. For example, the percentage of Americans who call microwaves a “necessity” rather than a “luxury” has more than doubled in the past decade, from 32 percent in 1996 to 68 percent in 2006:

Chart (c) 2005-2009 Pew Research Center

 The study also broke down the responses by age group. As you might expect, younger people were much more likely to view home computers and cellphones as a “necessity” than their older counterparts. But complaints about young people’s watching too much TV notwithstanding, older Americans were much more likely to view television as a necessity than younger Americans were. I imagine that the TV statistics should be taken with a grain of salt, though — compared to older Americans, younger Americans may be more likely to get their entertainment content over the Internet rather than through a TV set. (YouTube, for example, was acquired by Google the same month that these survey responses were collected.)

In any case, the change in consumer spending habits — or at the very least, how Americans view these spending habits — has prompted lively debates about how to calculate the “cost of living” over time. Some academics say that, judging by the household comforts Americans can afford, families today are better off than their parents or grandparents were; others argue that the rising cost of some core expenses, such as health care, means things are tougher for American families.

02/10/2009 - Posted by | Economy | ,

1 Comment »

  1. From the New York Times
    Ignorance is bliss

    That is, your ignorance is the drug makers’ (and the medical equipment makers’) bliss.

    This is really unbelievable:

    The drug and medical-device industries are mobilizing to gut a provision in the stimulus bill that would spend $1.1 billion on research comparing medical treatments, portraying it as the first step to government rationing.

    Because freedom is all about laying out vast sums on medical treatments without knowing whether they’re actually doing any good.

    Remember this the next time someone talks about “entitlement reform” (which will probably happen in the next three seconds or so.) Health care costs are the main reason long-term fiscal projections look so scary — and here we have corporate interest trying to prevent us, not from trying to spend our health dollar more wisely, but from even trying to find out what we get for the health care dollar.

    Comment by Bear | 02/10/2009 | Reply

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