Spending Patterns in U.K. and U.S.

AuthorG. W. Horobin,R. L. Smyth
Date01 February 1959
Published date01 February 1959
DOIhttp://doi.org/10.1111/j.1467-9485.1959.tb00102.x
SPENDING PATTERNS
IN
U.K.
AND
U.S.
RECENTLY
there has been much concern in Great Britain, as in most
developed countries, with the suspected
'
inflationary
'
effects
of
credit
buying by consumers. That much
of
the discussion on this topic has
been concentrated on the growth
of
hire purchase rather than
the
equally large volume of revolving credit, reflects a general lack of
information about consumer credit in general. However, even though
a consistent series of credit statistics
is
not yet available, an examination
of the way in which consumers are using their incomes may prove
enlightening.
Most credit buying takes place in the field of consumer durables-
cars, television, furniture and refrigerators-and one
of
the most
important factors in fixing demand for them is personal income. This
truism needs modification; in relation to consumer durables, the
decisive factor
is
not the size of the gross pay packet,
or
even the
disposable income left after all tax and pension deductions, but the sum
actually available for what may be termed
'
discretionary expenditure
'
or
the amount each individual has available for non-essential con-
sumption.
To calculate this, consumer expenditure is broken down into two
broad groups. The first
of
these may be termed
'
committed expendi-
ture'
and consists largely of items such as food, drink, tobacco,
housing, fuel and light, clothing and essential transport (Table
I).
Now
there can be much argument as to whether these items should all be
classed as essential but from a commonsense point
of
view all deserve
inclusion since spending on them in a modern society cannot con-
veniently be avoided.
A
few comments may be appropriate here on
the post-war pattern of this
'
committed expenditure
'.
The amount
spent on foodstuffs has been rising steadily indicating (after allowing
for
increased population) a perceptible
rise
in feeding standards.
Thus
there
has
been a switch to more expensive foodstuffs with more butter,
canned fruit, sugar, meat, eggs and cheese being consumed and a
falling demand for jam, flour and potatoes.'
To
a greater
or
lesser degree,
this development can be perceived in nearly all Western European
countries and
is
very noticeable in America.
of
food consumption trends.
See the Treasury
'
Bulletin
for
Zndustry
'
No.
1
14
for
a detailed
analysis
5B
71

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