bls_0648_1940pt6.pdf

STUDY OF CONSUMER PURCHASES URBAN TECHNICAL SERIES

Family Expenditures in Selected Cities, 1935-36

Volume V I

Travel and Transportation

Bulletin T^o. 648

UNITED STATES DEPARTMENT OF LABOR B U R EAU OF LA B O R STATISTICS

in cooperation withW O R K S PROGRESS A D M IN IST R A T IO N

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

UNITED STATES DEPAKTMENT OF LABOR Frances Perkins, Secretary

BUREAU OF LABOR STATISTICS Isador Lubin, Commissioner

Sidney W. Wilcox Chief Statistician

A. F. HinrichsChief Economist

Hugh S. Hanna Chief, Editorial and Research

STAFF FOR THE STUDY OF CONSUMER PURCHASES! URBAN SERIES

Faith M. Williams Chief, Cost of Living Division

A. D. H. Kaplan Director

Bernard Barton, Associate Director Mildred Parten, Associate Director, for Tabulation Sampling and Income Analysis

J. M. Hadley, Associate D irector, Mildred Hartsough, Social Analyst, Collection and Field Tabulations Expenditure Analysis

A. C. Rosander, Statistician, Tabular Analysis


U N ITED STATES D E P AR TM E N T OF LABO RFrances Perkins, S ecre ta ry

B U R E A U OF L A B O R S T A T IS T IC S Isador Lubin, C om m iss ion er

in cooperation w ithW O R K S PR O G R E SS A D M IN IS T R A T IO N

+

Family Expenditures in Selected Cities, 1935^36

VOLUME VI

Travel and Transportation

Bulletin T^ lo. 648

U N IT E D S T A T E S

G O V E R N M E N T P R IN T IN G OFFICE

W A S H IN G T O N : 1940

S T U D Y OF C O N SU M E R PU RC H A SE S: U R B A N T E C H N IC A L SERIES

F or sale b y the Superintendent o f D ocum ents, W ashington, D . C. Price 20 cents


CONTENTS

PageP r e f a c e ______________________________________________________________________ y ii

PARTIE x p e n d it u r e s for T ra v el a nd T r a n spo rt a tio n in R el a

tio n to I ncome(Prepared by Lenore A. Epstein)

C h a pt er I. Family expenditures for travel and transportation__________ 3II. The autom obile____________________________________________ 11

III. Transportation by public conveyance______________________ 31List of Tables

C hapter IT a ble 1. Expenditures for all travel and transportation as a percentage

of total expenditures for current family living, by incom e__ 51-A. Expenditures for automobile and other transportation each

as a percentage of total expenditures for current family living, for white families in cities of different size in the Northeast and East Central regions, by incom e_____________ 7

C hapter I IT abl e 2. Percentage of white families in large and middle-sized cities

that reported automobile ownership in 1935-36, at selected income levels______________________________________________ 14

3. Percentage of automobile owners that reported automobilepurchase, during 1935-36, for white families in large and middle-sized cities, at selected income levels_______________ 18

4. Estimated average total automobile expenditures incurred byautomobile operators, for white families in the large and middle sized cities, at selected income lev e ls___________________ 20

5. Average expenditures by automobile operators for current automobile operation, including and excluding outlays for State gasoline taxes, for white families in six large cities at selected income levels______________________________________________ 21

6. Percentage increase in income and in the estim ated totalautomobile expenditures and the current operation expenditures incurred by automobile operators, over the income range from $1,000-$1,500 to $4,000-$5,000, for white families in large and middle-sized cities____________________ 22

7. Average number of miles driven by automobile operators, forwhite families in six large cities, at selected income levels__ 22

in


IV CONTENTSPage

T a b l e 8. Percentage of current automobile operation expenditures allocated to specified items, for white families in selected cities, at selected income levels____________________________ 24

9. Average expenditures by automobile operators for gasoline andoil, for white families in large and middle-sized cities, at selected income levels_____________________________________ 25

10. Percentage of automobile operators that had automobile insurance, and average insurance payments by families that had automobile insurance, for white families in six large cities, at selected income levels__________________________________ 26

11. Percentage increase in income and in average net familyexpenditures for automobile purchase by families that purchased, over the income range from $1,000-$1,500 to $4,000-$5,000, for white families in large and middle-sized cities______________________________________________________ 28

12. Percentage increase in income and in the average gross priceof new and used cars purchased during 1935-36, over the income range from $1,500-$1,750 to $3,500-$4,000, for white families in large and middle-sized cities_____________ 30

Chapter I I IT abl e 13. Average expenditures for interurban travel by public convey

ance, for white families in selected cities, at selected income levels_____________________________________________________ 32

14. Average expenditures for all travel and transportation bypublic conveyance, Chicago, by family type and incom e__ 33

15. Expenditures for local transportation by public conveyance asa percentage of expenditures for all travel and transportation other than by automobile, Chicago, by family type and incom e____________________________________________________ 34

16. Expenditures for local transportation by public conveyanceas a percentage of expenditures for all travel and transportation other than by automobile, Chicago, by occupation and incom e________________________________________________ 34

17. Expenditures for local transportation by public conveyanceas a percentage of expenditures for all travel and transportation other than by automobile, for white families in large and middle-sized cities, at selected income levels_____ 35

18. Percentage of families reporting no expense for transportationby public conveyance, white and Negro families, New York and Atlanta, by incom e___________________________________ 36

19. Percentage of families reporting no expense for transportation by public conveyance, for white families in cities of different size in the Northeast region, by incom e_________ 37

20. Expenditures for local transportation by public conveyanceas a percentage of expenditures for all travel and transportation other than by automobile, for white families in cities of different size in the Northeast and East Central regions, by income_________________________________________________ 38


CONTENTS VList of Figures

PageF ig u r e 1. Expenditures for transportation by automobile and by public

conveyance, Southeast and Pacific Northwest, 1935-36____ 82. Relative change with income in average expenditures by all

families for automobile purchase, current automobile operation, and transportation by public conveyance, Omaha- Council Bluffs, 1935-36___________________________________ 9

3. Family types for expenditure study__________________________ 124. Relative change with income in the proportion of families

owning and purchasing automobiles, New England and Pacific Northwest middle-sized cities, 1935-36_____________ 17

5. Relative change with income in the proportion of all familiespurchasing new and used cars, respectively, Denver, 1935-36___________________________________________________ 29

PART II

T a b u l a r S um m ary a n d A p p e n d ix e s(Jesse R. Wood, Jr., was in charge of the preparation of part II

for publication)T a b u l a r Su m m a r y_____________________________________________________ 39

T a bl e 1. N u m b e r o f F a m il ie s: Total number of nonrelief families including husband and wife, both native born, eligible for the expenditure study in the areas covered; and number of families reporting on expenditure; by family type, occupation, and income, in 1 year, 1935-36____________________________________________ 40

2. A d ju st e d Incom e and E x p e n d it u r e : Average adjustedincome and total expenditure, by family type, occupation, and income, in 1 year, 1935-36_______________ 64

3. T ra v el and T r a n spo r t a t io n : Average expenditurefor automobile and other transportation, and percentage of families owning automobiles, by family type and income, in 1 year, 1935-36__________________ 88

4. A u to m o bile P u r c h a se : Percentage of families purchasing new and used automobiles, average net expenditure per family for automobiles purchased, and average gross purchase price per car purchased, by income, in 1 year, 1935-36____________________________ 113

5. A uto m o bile Op e r a t io n : Extent of automobile operation, percentage of families reporting expenditure for automobile insurance, and average expenditure for all items of automobile operation, by income, in 1 year, 1935-36____________________________________________ 120

6. T r avel a nd T r a n spo rt a tio n Oth e r T h a n by F am ilyA u t o m o b il e : Average expenditure, by income, in 1 year, 1935-36_______________________________________ 110


VI CONTENTSPage

A p p e n d i x A. Scope and m ethod of the Study of Consumer Purchases:Urban Series__________________________________________________________ 137

The population covered-------------------------------------------------------------------- 138Cities studied__________________________________________________ 138N ativ ity groups------------------------------------------------------------------------- 138Income and occupational groups_______________________________ 138

Table A.- Median incomes and percentage distribution by income of families represented by the expenditure d ata_____________________________________ 139

Family type groups____________________________________________ 140Other eligibility requirements__________________________________ 141

Sampling procedures________________________________________________ 141Number of families from which expenditure data were secured. _ 144

Method of securing averages________________________________________ 144Combination of cities__________________________________________ 144Combinations of occupations and family typ es__________________ 145The weighting process__________________________________________ 145

A p p e n d i x B. Classification and definition of terms-glossary____________ 147C. Explanation of tables in Tabular Sum m ary________________ 152D. Facsimile of expenditure schedule_________________________ 157E. Communities included by the Bureau of Home Economics in

the Study of Consumer Purchases_______________________ 163F. Cities included by Bureau of Labor Statistics in the Study

of Money Disbursements of Wage Earners and ClericalWorkers________________________________________________ 164


PREFACE

The remarkable development of the automobile industry in the post-war years has resulted in a more striking change in family spending habits than has ever before occurred in an equal period of time. Average annual expenditures for transportation during 1935-36, as reported by the United States Bureau of Labor Statistics in the Study of Consumer Purchases, equaled if they did not exceed average annual outlays for clothing among families at most income levels above $2,000 in all but the metropolitan communities studied. Automobile ownership was reported by at least one-half the families with incomes above $1,500 in almost all the cities covered in the Urban Series of the Study of Consumer Purchases.

This investigation includes data on the extent of automobile ownership and the frequency of automobile purchase, on various items of expense for automobile operation, on net family expenditures for automobile purchase as well as the gross price of new and used cars purchased, and on outlays for local and interurban travel by public conveyance.

The present volume represents one of a number of bulletins covering expenditures for particular commodities and services. The results of the investigation are embodied in three series of bulletins, of which the present constitutes a part of the third. The first series was concerned with an analysis of the distribution by income class, occupational group, family type, nativity, and home tenure, of families studied in selected communities in different parts of the country. Each volume in that series pertained to a specific geographic region. The second series comprised reports on expenditures for the main categories of family living by nonrelief native-born families in the same regions. The third series embodies separate reports on the constituent items in the more important consumption categories, assembling for the use of those people who are concerned with the original work materials, the data collected in all cities covered by the Study.

The data on expenditures for transportation given in this report permit comparisons among different sections of the country, among communities of varying degrees of urbanization and between native- born white and Negro families in the same community. They cover a wide range of family incomes from those just above the relief level to

VII


VIII PREFACEincomes of more than $10,000. They were planned, moreover, so as to supply a sample that would allow for comparison among different occupational groups and among families of varying composition.

Both the effective demand for automobile transportation and also the expenses incurred by automobile owners increase rapidly with income. Expenditures for transportation by public conveyance, on the other hand, are remarkably similar for families with incomes between $1,000 and $4,000. Interurban travel other than by automobile was common during 1935-36 only among the highest income groups studied.

Family size and age composition have a very moderate influence on spending for travel and transportation. Automobile ownership is somewhat less common and, accordingly, average outlays for transportation by public conveyance are somewhat greater among large than among small families with similar incomes. Automobile ownership is more prevalent and expenditure for other transportation smaller among families containing husband, wife, children under 16, and no other persons than among families of the same size and similar income but with at least three adult members.

During 1935-36, automobile ownership was considerably more prevalent among all income groups in the West than in other areas of the country. In the Northeast and the East Central areas, the effective demand for automobile transportation was markedly lower during the year of the survey among families living in metropolitan communities than among families with similar incomes in the smaller cities. There was little variation in the extent of automobile ownership, however, between cities that ranged in size from 20,000 to 300,000 inhabitants. Average expenditures for transportation by public conveyance, on the other hand, were directly related to city size.

Simultaneous studies of rural and urban family incomes, and the manner of their disbursement, can shed light on the relative abilities of farm and city to absorb each others products, and on the manner in which that capacity changes as rural and urban incomes change.1

The study conducted by the Bureau of Labor Statistics was paralleled by a study of small city, village, and farm families conducted by the Bureau of Home Economics of the United States Department of Agriculture. Both surveys, which together constitute the Study of Consumer Purchases, were administered under a grant of funds from the Works Progress Administration. The National Resources Committee and the Central Statistical Board cooperated in the Nation-wide study. The plans for the project were developed and

1 While the present investigation obtained data on the expenditure patterns of families at different income levels, it provides inferential evidence on the alterations which would occur in family spending if incomes were raised or lowered.


PREFACE IXthe administration was coordinated by a technical committee composed of representatives of the following agencies: National Resources Committee, Hildegarde Kneeland, chairman; Bureau of Labor Statistics, Faith M. Williams; Bureau of Home Economics, Day Monroe; Works Progress Administration, Milton Forster; and Central Statistical Board, Samuel J. Dennis.

In selecting the data to be secured and the analyses to be made, consideration was given to the different interests which may be served by a study of consumer purchases. Scientific groups as well as legislative bodies and administrative agencies of the Government regularly need analyses of family incomes and expenditures to aid them in the study of such social and economic problems as taxation, social security, consumer protection, and wage adjustments. The analyses of general interest have been presented in a series of volumes on income and expenditures in various regions.

Welfare agencies are concerned with data bearing on the budgetary requirements of families in the maintenance of minimum standards of subsistence. Successful budgeting presupposes some consideration of the balance habitually maintained by families as between various types of expenditure. This concern runs not only in terms of gross expenditures which have already been shown, but also in terms of such refined detail as is here presented.

Manufacturers and distributors will utilize the information on income distribution and consumer preferences in the planning of their production and sales programs. Their interests are better served by a knowledge of expenditures for specific commodities than for broad classes of consumption which have more general interests.

Obviously, any economic program must have, as one fundamental prerequisite, a definite knowledge of the distribution of families by incomes and of the choices made by families in the disbursement of their incomes. The publication of the details of family expenditures at different income levels and in different parts of the country provides concrete information as to the point at which families enter the market for specific types of goods and makes it possible to relate the probable demand for given commodities and services to changes in income structure.

In view of the fact that a number of persons outside the Bureaus regular staff took part in the investigation, the Bureau of Labor Statistics wishes to acknowledge the services of the following persons who served as regional or metropolitan directors of field work: Ruth Ayres, LeRoy E. Clements, Rachael S. Gallagher, Forest R. Hall, Sybil Loughead, Glenn W. Sutton, Margaret D. Thompson, Georges M. Weber, and Erika Hartmann Wulff.


X PREFACEAcknowledgment is also made to Frances W. Valentine, Jesse R.

Wood, Jr., and William Loudon who were in charge of computation and tables; Joseph A. Smith, in charge of machine tabulation; Dorothy McCamman who served as chief check editor; Frank Strohkarck, Marie Bloch, Ethel Cauman, Verna Mae Feuerhelm, Lenore A. Epstein, Trusten P. Lee, Mary Wiatt Chace, and Allan W. Winsor, who were in charge of editing and reviewing.

I sador L u b in ,Commissioner of Labor Statistics.

M ay 1939.


XII


Part I

Expenditures for Travel and Transportation in Relation to Income

1


Bulletin Ho. 648 (Vol. VI) of the

United States Bureau of Labor Statistics

F am ily E xpenditures in Selected C ities, 1935-36 T R A V E L A N D TR AN SPO R TA TIO N

Chapter I

Family Expenditures for Travel and Transportation

Automobile ownership has been one of the most depression-proof elements in the level of living of families in all parts of the United States. People give up everything in the world but their c a r/ was the sentiment heard time and again by the Middletown investigators in 1935.1 Replacements declined sharply during the depression years, but passenger-car registrations showed little decline from 1929 to 1935. In 1933 passenger-car registrations had fallen to about 1 0 percent below the 1929 peak, but by 1935 they were only about 2 percent lower than in 1929 and had climbed to a figure over 4 percent higher than in 1928.2

The automobile has, of course, enormously increased the mobility of the American people. It has been an important factor in the movement of families to the outskirts of metropolitan and large cities, and likewise, it has brought rural and small-city families in closer touch with large city life. The automobile is far more than a method of transportation, however. I t is a prestige symbol in the minds of the great mass of Americansa symbol of advancement. Moreover, the automobile provides one of the major forms of recreation for many families. Since these diverse uses are not separable, all expenditures for the automobile will be considered under the heading of transportation in this report.

The phenomenal growth in the automobile industry in the post-war years and the accompanying decline in the price of passenger cars has brought the automobile within the reach of families with very moderate incomes.3 In 1917, automobile ownership was so uncommon among

1 See Robert S. Lynd, Middletown in Transition, New York, 1937, p. 265.2 Automobile Manufacturers Association, Inc., Automobile Facts and Figures, 1936 edition, p. 16.3 Although passenger automobiles had been produced commercially since the nineties, the cost of an auto

mobile was for many years far beyond the means of most American families. Less expensive models were introduced in 1908 and by 1922 the wholesale price of a currently acceptable touring car was $298, f. o. b. Detroit. Substantially the same car would have cost $525 at wholesale at the end of the War and $850 in 1908.

3


4 FAMILY EXPENDITURES IN SELECTED CITIES

moderate income families that expenditures for automobiles were tabulated with those for bicycles and motorcycles in a study of the family expenditures of wage earners and clerical workers made by the Bureau of Labor Statistics in 1917-19.4 Less than 15 percent of the wage-earner and clerical families with incomes of $1 , 2 0 0 to $1,500 covered in the 1917-19 study reported expenditure for one or another of these three types of vehicles. In 1935-36, automobile ownership was reported by approximately every other one of the native white families with similar dollar incomes in all the communities, except New York, Chicago, and Atlanta, that were covered by the Bureau of Labor Statistics in the Study of Consumer Purchases.6

Outlays for railroad travel and for local transportation by public conveyance have declined in importance over the years among moderate income families. This decline has, however, been far overbalanced by the rise in expenditures for automobiles. In general, expenditures for transportation of all types are at present about twice as important, relative to expenditures for all other consumer goods and services, as in 1917-19. The proportion of total family expenditures absorbed by travel and transportation at given income levels among urban wage-earner and clerical families of comparable size and composition in the war period and in 1934-36 are as follows:

Income class 1917-19 1 1934-36 2 Income class 1917-19 iUnder $900_ ___ _______ 1.4 5. 7 $1,800-$2,099 ______ 3. 6$900-$l,199 _____ . _ _ 2.0 6. 5 $2,100-$2,499 ______ 4. 5$1,200-$1,499__________ 2. 4 7. 7 $2,500 and over ______ 4.6$1,500-$1,799_______________ 3.0 8.8

1 See U. S. Bureau of Labor Statistics Bull. 357, The Cost of Living in the United States, Washington, 1924.2 Preliminary figures from U. S. Bureau of Labor Statistics Bull. 638, Money Disbursements of Wage Earners and Clerical Workers in 42 Cities, Washington, 1940.

In the cities covered in the Urban Series of the Study of Consumer Purchases, annual expenditures for automobile and other travel and transportation6 generally averaged less than $40 during 1935-36 among the families containing husband and wife, both native born,

4 See U. S. Bureau of Labor Statistics Bull. 357, The Cost of Living in the United States, Washington, 1924.5 Two metropolitan communities, 6 large cities averaging 300,000 inhabitants, 14 middle-sized cities of

30,000 to 75,000, and 9 small cities of from 10,000 to 20,000 were included in the expenditure analysis of data collected in the Study of Consumer Purchases by the Bureau of Labor Statistics. The Study was limited to native white families except in New York, Columbus, and the Southeastern cities, where a separate sample of native Negro families was taken. For list of communities, see pt. II, p. 138. For number of expenditure schedules analyzed for each tabulation unit, see pt. II, p. 144.

e While the term expenditure is used, it must be recognized that the figures reported include the full amounts incurred for transportation other than for business purposes for members of the economic family during the year of the survey, whether or not they were actually paid. Automobile expenditures include outlays both for current operation and for the purchase during the year of new or used automobiles. If a car was used partly for family and partly for business purposes, the family was asked to estimate the proportion of the use chargeable to business, and the appropriate amount was deducted from each item of operation expense. If a car purchased during the year was used partly for business purposes, a corresponding deduction was made from the net purchase price. The use of the family car by a family member in pursuit of his gainful occupation, as a physician or salesman for professional or business calls, was defined as business use.


152035'

T a b l e 1. Expenditures for all travel and transportation as a percentage of total expenditures for current family living, by incomeIncome class

City and color Under$250 $250-$499 $500-$749 $750-$999 $1,000-$1,249 $1,250-$1,499 $1,500-$1,749 $1,750-$1,999 $2,000-$2,249 $2,250-$2,499 $2,500-$2,999 $3,000-$3,499 $3,500-$3,999 $4,000-$4,999 $5,000-$7,499 $7,500-$9,999$10,000andover

W h ite fa m il ie s Metropolises: 8.0 7.5New York________________ 0) 0) 2.8 2.1 3.4 3.5 4.4 5.5 4.5 5.9 8.0 7.1 8.4 6.6 8.1C hicago___ _____________ 0) (1) 2.9 3.8 5.4 5.3 6.3 7.6 8.6 7.4 8.9 9.0 9.0 10.3 10.6 10.5 9.5Large cities:Providence________________ 0) 0) 2.3 5.0 5.4 6.9 7.5 10.3 9.5 9.8 10.9 10.1 10.0 11.0 10.1 2 8.1 (a)Columbus___________ ___ 0) Q) 3.9 4.4 7.3 8.5 8.5 10.8 11.4 12.1 11.4 11.7 12.0 12.7 11.9 29.1 (a)Atlanta___________________ 0) (1) 2.4 4.5 8.6 8.2 8.8 10.1 11.0 11.1 10.0 10.5 11.5 11.1 12.5 27.7 (a)Omaha-Council Bluffs_____ (1) 0) 3.9 6.9 6.9 8.3 7.5 9.1 10.8 9.7 10.1 10.4 10.5 10.6 13.9 213.6 (a)Denver___________________ 0) 0) 6.3 7.8 8.9 11.1 11.9 10.7 12.6 12.7 13.6 11.2 12.9 10.7 11. 5 210.5 (a)Portland__________________ 0) 0) 7.7 8.4 8.5 9.5 11.6 12.8 14.4 14.5 12.8 13.6 12.1 12.9 12.5 214.6 (a)Middle-sized cities: (a)New England_____________ 0) 0.3 3.1 4.3 6.3 4.9 8.9 10.3 11.1 10.9 15.7 14.2 12.6 18.9 2 6. 4 (9East Central_____________ (n 1.6 3.1 4.5 6.1 6.1 8.4 9.0 10.9 11.7 12.1 10.8 14.0 13.0 213.1 (a) (a)Southeast__________ _ _ 0) 2.5 1.9 5.6 5.9 6.9 7.1 9.7 9.7 9.4 10.8 11.5 10.8 11.7 2 9. 8 (a) (a)West Central_____________ 0) 2.5 4.5 4.3 7.1 7.9 9.1 9.9 10.2 10.3 12.6 10.4 10.4 9.3 211.8 (a) (a)Rocky Mountain____ ____ 0) 1.9 7.3 6.2 10.9 10.3 11.3 10.3 13.1 11.5 11.5 9.0 13.1 11.7 2 9. 7 (a) (a)Pacific Northwest ______ 0) 5.6 5.0 5.6 6.1 11.2 13.9 11.0 11.9 14.0 11.9 12.7 13.9 14.3 212.3 (a) (a)Small cities:New England _ __________ 0) 1.6 3.5 4.8 5.9 7.8 7.1 10.7 9.0 11.7 12.0 212.3 (a) (a) (a) (9


when family income was below $750. In general, they averaged more than $100 for families with incomes above $1,500, more than $200 for those with incomes above $2,000, and more than $450 for families with incomes between $5,000 and $7,500.7

Thus, over the lower portion of the income range, transportation expenditures increased far more rapidly than total expenditures or even than family income, while at higher levels the relative increase in transportation expenditures was in general approximately the same as that in total expenditures for current family living.8

At income levels below $750 the proportion of total expenditures going for travel and transportation was less than 5 percent in all except the Kocky Mountain and Pacific Northwest cities. In Portland, Oreg., this percentage was almost 8 at the lowest income level studied. I t rose to 15 percent at the highest income level studied in Portland and to an even higher proportion among white families in the upper income ranges in middle-sized cities in New England, and among Negro families in Atlanta.

Average expenditures for transportation during 1935-36 were substantially below food expenditures at all income levels, but a t the upper end of the income scale, they approached housing expenditures, at least in the western cities covered, and generally exceeded those for clothing.9

The increase with income in average total expenditures for transportation is entirely a reflection of the rising importance of auto* mobile expenditures. Other forms of transportation take about the same share of total expenditures throughout the income range (see table 1-A ). They constituted from 2 to 3 percent of the total expenditures of white families in New York and Chicago during the year of the survey, 1 to 2 percent of the expenditures of large-city families, and less than 1 percent of all expenditures among families in the middle- sized and small cities studied. Expenditures for automobile purchase and operation, on the other hand, accounted for less than 5 percent of the total expenditures of families with incomes below $1 , 0 0 0 in most cities, but for 8 percent or more of the total among families with incomes above $2 ,0 0 0 in all cities, except New York and Chicago. Outlays for travel and transportation by public conveyance are there-

7 See pt. II, table 3. All data on average expenditures for total transportation and constituent categories and on the percentage of families owning and purchasing automobiles are presented in pt. II, tables 3 through 6. Averages and percentages are weighted by the frequency of families eligible for the expenditure survey in the constituent population groups. See pt. II, for method of deriving averages and for weighting.

8 For data on total family expenditures and total family income, see pt. II, table 2. Transportation expenditures formed a slightly larger proportion of total family income than of total expenditures among the low income groups, whose average total expenditures exceeded their average current incomes, and a slightly smaller proportion of income than of expenditures among the high-income groups, which characteristically spent less than their incomes.

9 See U. S. Bureau of Labor Statistics Bulls. 642 through 647 and 649, Family Income and Expenditure, Washington, 1939, vol. II.


TRAVEL AND TRANSPORTATION 7fore generally of greater importance, relative to automobile expenditures, at the low than at the high income levels. The differences are the more striking the more highly urbanized the community. (See fig. 1 .)T a b l e 1 -A .Expenditures for automobile and for other transportation each as a percentage of total expenditures for current family living, for white families in cities of different size in the Northeast and East Central regions, by income

Income classNortheast East Central

NewYork ProvidenceMiddle-sizedcities

Smallcities Chicago ColumbusMiddle-sizedcities

Smallcities

Automobile transportation 1$500-$749__________ 0.7 2.2 3.1 0.6 2.8 2.7 2.2$750-$999__________ 0.3 3.2 3.4 4.4 .8 3.0 3.7 4.3$1,000-$1,249_______ .9 3.7 5.6 5.2 2.9 5.9 5.3 6.1$1,250-$1,499_______ .9 5.2 4.0 7.3 2.6 6.9 5.3 7.1$1,500-$1,749________ 2.0 5.7 7.9 6.6 4.0 7.2 7.8 8.0$1,750-$1,999_______ 3.3 8.8 9.4 10.1 5.3 9.6 8.2 9.5$2,000-$2,249_______ 2.3 8.0 10.0 8.5 6.5 10.3 10.2 10.1$2,250-$2,499_______ 3.7 8.2 9.9 11.2 5.1 11.0 11.1 9.3$2,500-$2,999_______ 5.8 9.5 15.3 11.5 6.7 10.4 11.5 11.1

Transportation other than by automobile$500-$749__________ 2.8 1.6 0.9 0.4 2.3 1.1 0.4 0.1$750-$999__________ 1.9 1.8 .9 .4 3.0 1.4 .8 .2$1,000-$1,249_______ 2.5 1.7 .7 .7 2.5 1.4 .8 .4$1,250-$1,499_______ 2.6 1.7 .9 .5 2.8 1.6 .8 .5$1,500-$1,749_______ 2.4 1.8 1.0 .5 2.3 1.3 .6 .5$1,750-$1,999_______ 2.2 1.5 .9 .6 2.4 1.2 .8 .5$2,000-$2,249_______ 2.2 1.5 1.1 .5 2.1 1.1 .7 .3$2,250-$2,499_______ 2.2 1.6 1.0 .5 2.3 1.1 .6 .3$2,500-$2,999_______ 2.2 1.4 .4 .5 2.3 1.0 .6 .4

i Includes expense for purchase and operation.

Differences in the relative increase with income in family expenditures for automobile operation, automobile purchase, and other transportation are illustrated in figure 2 for white families in Omaha- Council Bluffs. The light diagonal line indicates the slope the lines would have taken if expenditures had increased in the same proportion as income. I t will be seen that expenditures for both purchase and operation increase more rapidly than income, expenditures for transportation by public conveyance more slowly. Both types of automobile expenditure rise more rapidly over the lower than over the upper portion of the income scale, but, in general, the relative increase in expenditures is greater for automobile purchase than for operation.

Insofar as attention is centered on the effect of differences in income on spending for transportation, the relative frequency of families in different income groups is of no concern. If the data are to be interpreted in terms of the effective demand for automobile and other transportation, it is of extreme importance that the distribution of families by income be kept in mind. The nonrelief white families



Fig. I

EXPENDITURES FOR TRANSPORTATION BY AUTOMOBILE AND BY PUBLIC CONVEYANCE

SOUTHEAST AND PACIFIC NORTHWEST, 1935-36NONRELIEF WHITE FAM ILIES INCLUDING HUSBAND

AND WIFE BOTH NATIVE BORN

500 1500 2500 4 0 0 0 500 1500 2 500 40 0 0ANOUNOER ANOUNOER ANOUNOER ANO UNDER ANOUNOER ANOUNOER ANO UNDER ANOUNOER1000 2 000 3 000 5000 1000 2000 3000 5000

P A C IF IC N O R T H W E S Tpercentage. PORTLAND M ID D LE -S IZ ED CITIES percentage

500 1500 25 0 0 4 000 500 1500 2500 4 000ANO UNDER ANO UNDER ANOUNOER ANO UNOER ANO UNOER ANOUNOER ANOUROCR AROUNOER1000 2000 3000 5000 1000 2000 3 000 5 0 0 0

FAMILY INCOME IN DOLLARS

TRANSPORTATION BY PUBLIC CONVEYANCE

AUTOMOBILE TRANSPORTATION

U. S BUREAU OF LABOR STATISTICS


TRAVEL AND TRANSPORTATION 9

RELATIVE CHANGE WITH INCOME IN AVERAGE EXPENDITURES BY ALL FAMILIES FOR AUTOMOBILE PURCHASE, CURRENT AUTOMOBILE OPERATION AND TRANSPORTATION BY PUBLIC CONVEYANCEOMAHA-COUNCIL BLUFFS, 1 9 3 5 - 3 6

A N N U A L EXPENDITURE ( In D o l l a r s )

NONRELIEF W HITE FAMILIES INCLUDING HUSBAND AND WIFE BOTH NATIVE BORN

ANN U AL EXPENDITURE ( In D o l l a r s l

U. S. BUREAU OF LABOR STATISTICS



containing husband and wife, both native born, to which the study of expenditures was limited in most communities,10 constitute the most favorably situated population group. Median incomes of these families in the middle-sized and small cities covered in the Urban Series of the Consumer Purchases Study ranged from $1,450 to $1,675. In the large and metropolitan cities, the level below which half these families were found varied from $1,600 in Providence to slightly over $2 , 1 0 0 in New York. Nonrelief Negro families containing husband and wife, both native bom, had considerably lower incomes.11

Although average total expenditures for transportation are directly affected by family income, amounts spent in this manner vary widely for given income groups in accordance with the tastes and habits of individual families. Hence, any generalizations arising from a study of average transportation expenditures must be tempered by an understanding of the dispersion in the amounts spent. Certain circumstances nevertheless influence the average demand for and expense of transportation. The effects of such factors as occupation, family size and age composition, geographic locality, city size, and race on the effective demand for transportation by automobile and by public conveyance are very different, however, and will therefore be discussed in chapters II and III in relation to these types of transportation separately rather than in relation to total transportation.

10 The purpose of these qualifications was to eliminate as far as possible factors of economic stress, broken family ties, and alien customs, which might tend to obscure the relationship to family expenditure patterns of income, occupation, family composition, degree of urbanization, and geographical locality. Since native white families greatly outnumber all other racial and national groups in most cities, it seemed wise to confine the restricted resources available for the survey to a study of the expenditures of this relatively homogeneous group. In order that the influence of the Negroes situation on family expenditures might be analyzed, a separate sample of Negro families was taken in the Southeastern cities covered, where Negroes make up at least one-third of the population, and in New York and Columbus.

11 See pt. II, table A, for the median incomes and a percentage distribution by income of the families represented by the data on consumer expenditures. The average incomes of foreign-born families are generally below those of native-born families in the same community. Similarly, broken families receive lower incomes, on the average, than families containing both husband and wife. For detailed discussion of the income distribution of foreign-born and incomplete families, see U. S. Bureau of Labor Statistics Bulls. 642 through 647, and 649, Family Income and Expenditure, Washington, 1939, vol. I.


Chapter II

The AutomobileThe sharp rise with income in automobile expenditures, when aggre

gate outlays are averaged among all families in an income group, reflects two factors. These are the rapid expansion in the effective demand for automobiles as measured by ownership on the one hand and by purchase on the other, and also the increase with income in the expenses of ownership and purchase for families incurring such expenditures.

The Demand for Automobiles

Extent of automobile ownership.Automobile ownership is almost universal among families with incomes of $5,000 or more. At least one in five of the white nonrelief familes with incomes as low as $750 to $1 ,0 0 0 , in all the communities except New York and Chicago covered by the Bureau of Labor Statistics in the Study of Consumer Purchases, reported ownership of automobiles during the year of the survey, 1935-36. At successive income levels over the income range from $1,000 to $5,000 the proportion of families that owned cars increased steadily, though by no means with absolute regularity.

Since the automobile is chiefly a vehicle for convenience and recreation, purchased by most families as soon as their finances allow, it is not surprising that occupational classification has little bearing on the prevalence of automobile ownership at given income levels.1

The size of families and the proportion of family members under and over 16 years of age, on the other hand has some influence on the proportion of families in given income groups that operate automobiles.2 On the whole, ownership is somewhat less common among

1 The occupational classification of a family was determined by the occupational group from which it derived the major portion of its earnings during the year of the survey, whether that portion was contributed by one or more family members. By and large the occupational classification was determined by the earnings of the principal earner, who, in turn, was usually the husband. For number of occupational groups distinguished in cities of varying size and for different racial groups, see appendix A. For percentages of families in each of the 20 urban groups that reported automobile ownership, by occupational group and income, see U. S. Bureau of Labor Statistics, Bulletins 642 through 647 and 649, Family Income and Expenditure, Washington, 1939, vol. II, Tabular Summary, table 8.

2 White families in Chicago, Columbus, the East Central middle-sized and small cities and Negro families in Atlanta were classified into seven family types, as shown pictorially in fig. 3, on the basis of the number and age of members other than the husband and wife, as follows:

I. No other persons (families of two).II. One child under 16 (families of three).

III. Two children under 16 (families of four).IV. One person 16 or over and one or no other person, regardless of age (families of three or four).V. One child under 16, one person 16 or over, and one or two others, regardless of age (families of five

or six).VI. Three or four children under 16 (families of five or six).

VII. One child under 16, and four or five others, regardless of age (families of seven or eight).In other city groups families of the first five types only were covered, and in the tabulation families of types II and III, and IV and V, respectively, were combined. In general, therefore, the analysis of family type differences in this report will be confined to those goups where the data were presented for seven family types. 11


12 FAMILY EXPENDITURES IN SELECTED CITIESFig 3

FAMILY TYPES FOR EXPENDITURE STUDY

TYPE I TYPE II TYPE III

asvd/

16 YEARSI \

nMii'iiiiiu.uJ

TYPE IV TYPE V

TYPE VI TYPE VII

t

f l

MEMBERS REQUIRED FOR TYPE

MEMBER REQUIRED FOR TYPE, BUT AGE ALTERNATIVE

A { / MEMBER OPTIONAL FOR TYPE

W LI AGE ALTERNATIVE

U. S. BUREAU OF LABOR STATISTICS


THE AUTOMOBILE 13families containing five to eight members than among those of two to four.3 Large families at a given income level feel more pressure on their budgets than small families for other categories of consumption, particularly for food and clothing, so that they are less able to finance the operation of an automobile. Families consisting of husband, wife, and children under 16 years of age, and no other persons, however, tend to own cars somewhat more frequently at given income levels than families of the same size that contain at least three adults. This suggests that families with young children feel a particular need for a car to facilitate family visiting and trips out of town.

Regional differences in the prevalence of automobile ownership. Native white self-sustaining families living in the Rocky Mountain and Pacific Northwest areas own automobiles more commonly than families living in the New England, East Central, or Southeastern sections of the country. (See table 2.) 4 At least three in every four families owned automobiles in 1935-36 when family income reached $1,250 in Denver and the Rocky Mountain and Pacific Northwest middle-sized cities and $1,500 in Portland. In Atlanta, on the other hand, as many as three-fourths of the white families owned automobiles in only the income groups above $2,000.5

The great national parks which are within easy reach of the Western cities studiedEstes Park near Denver and Pueblo, Mount Ranier National Park and Crater Lake National Park in the Washington and Oregon area, and the Puget Sound beachesdoubtless make automobile ownership particularly attractive to families in these cities. Housing expenditures are generally lower in relation to income in the West than in other sections, and, at least in the case of the large cities, food expenditures are also somewhat lower there.6

3 See pt. II, table 3.4 This finding is corroborated by data from the Bureau of Labor Statistics study of the income and money disbursements of families of employed wage earners and clerical workers during the period 1934-36. The proportion of families covered in this investigation that owned automobiles, by region, are as follows:

North Atlantic___________________________________________________________________ 35East North Central_______________________________________________________________ 60Southern________________________________________________________________________ 51West North Central______________________________________________________________ 62Pacific___________________________________________________________________________ 70

See U. S. Bureau of Labor Statistics Bulletins 636, 637 (vol. II), 639, 640, 641, Money Disbursements of Wage Earners and Clerical Workers, Washington, 1939.5 Comparisons among families at given income levels in different cities may be made without regard to differences in the size and age composition of the population or in the occupational distribution of the families. All factors which differ are then considered as a part of the regional or city-size differences observed. Another approach to the problem requires that the populations compared shall be qualitatively and quantitatively alike, that is, only data for the same family type, occupational, and income groups be included, and that each group must contain equal proportions of the total number of families in each city. Any differences which can then be observed may be assumed to be true regional or city-size differences. Because of time limitations, the latter type of analysis has not been made for the data on transportation expenditures. As has been noted, however, occupational classification does not appear to influence automobile ownership. Moreover, when the percentage of owning families at each income level is recomputed for the group in Chicago, with families of types VI and VII omitted, they do not differ significantly from the percentages based on families of seven types.6 See vols. I and II of bull. 648.


14 FAMILY EXPENDITURES IN SELECTED CITIESSince food and housing are the most important family expenditures, families in the Rocky Mountain and Pacific Northwest have somewhat more freedom of choice, at given income levels, than other families in the allocation of their expenditures.T abl e 2 . Percentage of white families in large and middle-sized cities that reported automobile ownership in 193536, at selected income levels

Income classRegion

NewEngland EastCentral Southeast WestCentralRockyMountain

PacificNorthwest

Large cities

$750-$999______________________________ 23 46 29 54 63 57$1,250-$1,499__________________________ 45 72 45 66 78 69$1,750-$1,999__________________________ 73 75 64 74 83 84$2,250-$2,499__________________________ 72 82 75 80 89 81$3,000-$3,499__________________________ 78 89 78 76 92 89$4,000-$4,999__________________________ 88 96 81 95 90 95$7,500 and over ___ ____ __________ 90 92 91 100 86 94Middle-sized cities

$750-$999______________________________ 19 36 40 38 65 53$1,250-$1,499__________________________ 39 54 64 66 76 74$1,750-$1,999__________________________ 69 72 74 72 79 86$2,250-$2,499__________________________ 74 83 78 77 86 88$3,000-$3,499__________________________ 84 88 89 85 78 93$4,000-$4,999__________________________ 91 94 92 90 94 97$5,000 and over__ __________________ 100 95 97 89 78 90

City-size differences in the prevalence of automobile ownership. Automobile operation is likely to be more expensive, because of higher garage and parking charges,7 and less necessary, since public transportation systems are better developed, in large than in small cities. New York and Chicago, where the problem of traffic congestion on the one hand and relatively high costs of food and housing on the other is especially serious, were distinguished from all other communities covered by the Bureau of Labor Statistics in the Study of Consumer Purchases by the relatively low proportion of families that owned automobiles. Three-fourths or more of the Chicago families studied reported automobile ownership only when family income reached $3,500. In New York, this was true only of the income groups above $7,500.

The relationship of automobile ownership and city size appears chiefly in connection with metropolitan areas. Except in the Southeastern region, automobiles were owned as frequently by families in cities of approximately 300,000 population as by families with similar incomes in middle-sized cities (ranging in size from 35,000 to 70,000) in the same region. Indeed, Columbus families tended to own cars more frequently than families in comparable income groups in five

7 See p. 25.


THE AUTOMOBILE 15small cities (ranging in size from 11,000 to 19,000) in Pennsylvania, Indiana, and Illinois.

Differences between racial groups in the extent off automobile ownership.Automobile ownership appears to be considerably less common among Negro than among white families with similar incomes in the same community. This was characteristic during the year of the survey in New York, Columbus, and the Southeastern cities studied. In Atlanta, for example, automobiles were operated by more than three-fifths of the white families at all income levels above $1,750 but by an equal proportion of Negro families only at the levels above $2,500. The differences are more striking in the lower than in the upper portions of the income range.

The relative infrequency of automobile ownership by Negro families is in accord with their general tendency to spend substantially less, on the average, for all consumer goods and services, and thus to make larger savings, in relation to their incomes, than white families.8

Frequency off automobile purchase.Since the automobile is a durable good, the demand for individual transportation service may be largely satisfied in any 1 year by the operation of automobiles already owned. Hence, automobile purchase varies widely from year to year with general business conditions, the psychological atmosphere, and certain specific factors such as the age of cars owned, the extent and character of model changes, financing terms, used-car prices, and trade-in allowances.9

The number of cars in use did not change materially during the depression, as noted above. The number of cars sold, on the other hand, declined very sharply from 1929 to 1932 and then rose with equal rapidity in the 3 succeeding years.10

Among the families covered by the Bureau of Labor Statistics in the Study of Consumer Purchases, the proportion purchasing automobiles during the year of the survey rose from a negligible proportion at the lower income levels in most cities to two-fifths or more at the highest income levels studied for each urban group. In only a few instances did as many as one-fourth of the families in any income group below $2,500 purchase a car during the year.11

Since the number of families studied at each income level was relatively limited, the proportion of families purchasing varied irregularly from one group to the next, and neither family size and

8 See U. S. Bureau of Labor Statistics Bulls. No. 643, 644, and 647, Family Income and Expenditure, Washington, 1939, vol. II, chs. I and II.

9 See The Dynamics of Automobile Demand, based upon papers presented at the joint meeting of the American Statistical Association and the Econometric Society in Detroit, Mich., on December 27, 1938. Published by General Motors Corporation, New York, 1939.10 New passenger-car registrations in United States declined over 70 percent from the peak in 1929 to a low in 1932, and then rose 150 percent from 1932 to 1935. See Automobile Facts and Figures, 1936 edition, p. 7.11 See pt. II, table 4.


16 FAMILY EXPENDITURES IN SELECTED CITIESage composition nor the occupation classification of a family appears to have had a clear influence on the decision to purchase cars.12

The region in which a family lives appears to have had no clear influence on the proportion of all families in given income groups that purchased automobiles in 1935-36. Columbus stood out among the large cities, with the highest rate of purchase, but the middle- sized cities in the Pacific Northwest ranked clearly above the other cities covered in that size range in this respect. The proportion of families purchasing cars tended to be low in both large and middle- sized cities in New England and the West Central areas.

Frequency of automobile purchase, on the other hand, as prevalence of ownership, was clearly less in New York and Chicago than in smaller communities in the same region.

In New York and Atlanta, the proportion of families that purchased cars in 1935-36 was greater at most income levels among whites than among Negroes. In Columbus and in Columbia and Mobile, however, there were no consistent differences between the racial groups in this respect.

Because of the wide fluctuations from year to year in automobile purchases, the relationships found in any one year among different urban groups are less likely to obtain in other years than in the case of automobile ownership and of spending for many other categories of consumption. The ratio of purchasers to owners increased less rapidly with income than might have been expected. I t varied irregularly, but, in general, did not fall much below 25 percent at the lower levels nor exceed 40 percent except at the highest levels. (See table 3.) The proportion of families at each income level that reported automobile ownership and purchase is compared, by way of illustration, in figure 4 for the New England and Pacific Northwest middle-sized cities.

The proportion of cases in which car purchase during 1935-36 represented replacement as opposed to new purchase has not been tabulated. If the ratio of purchasers to owners is viewed as an approximate measure of the replacement rate, it appears that, in general, families with incomes below $1,500 replace their cars once in about 4 years, while families at the upper levels replace their cars every second or third year. In view of the fact that the year of the survey was one of recovery following a severe depression, however, it is probable that replacement as well as new purchase, was relatively higher than normal at the low than at the high income levels. Following 1933, there was a liberalization of installment terms by automobile dealers, which probably accounted, in part, for the relatively high

12 See U. S. Bureau of Labor Statistics Bulls. 642 through 647 and 649, Family Income and Expenditure, Washington, 1939, vol. II, Tabular Summary, table 8, for percentages of families purchasing cars, by occupation and income and by family type and income.


THE AUTOMOBILE 17proportion of car purchasers at the lower income levels in the period covered by this study. Thus, in 1935 the proportion of new passenger cars sold with down paym ents of less than one-third the price of the

Fig 4

RELATIVE CHANGE WITH INCOME IN THE PROPORTION OF FAMILIES

OWNING AND PURCHASING AUTOMOBILESNEW ENGLAN D AND PACIFIC N O R T H W EST

M ID D L E -S IZ E D C IT IE S , 1 9 3 5 - 3 6

NONRELIEF WH ITE FAMILIES INCLUDING HUSBAND AND WIFE BOTH NATIVE BORN

PERCENT OF FAMILIES PERCENT OF FAMILIES

INCOME CLASS IN DOLLARS

U. S. BUREAU OF LABOR STATISTICS____________________________________________________________________________________

vehicle was 23 percent as compared with 11 percent in 1934. Corresponding figures for used cars sold with even smaller down paym ents, less than two-fifths of the price, were 50 percent in 1935 as compared


18 FAMILY EXPENDITURES IN SELECTED CITIESwith only 19 percent in 1934. N ot only were cars sold with smaller down payments than in previous years, but the time allowed for paym ent was extended; the proportions of both new and used cars sold on terms longer than 12 months doubled in 1935 as compared with 1934.13T a b l e 3. Percentage of automobile owners that reported automobile purchase during 1985-86, for white families, in large and middle-sized cities, at selected income levels

Income classRegion


PacificNorthwest

Large cities

$750-$999______________________________ 44 8 27 23 23 19$1,250-$1,499__________________________ 25 24 36 11 24 22$1,750-$1,999___________________________ 23 32 29 20 16 25$2,250-$2,499_________________________ 26 35 37 28 27 37$3,000-$3,499__________________________ 25 39 35 28 18 31$4,000-$4,999___________________________ 37 47 36 25 35 45Middle-sized cities

$750-$999_____________________________ 31 30 36 18 13 11$1,250-$1,499___________________________ 18 26 18 15 26 30$1,750-$1,999__________________________ 42 26 27 32 30 23$2,250-$2,499__________________________ 33 31 25 31 36 38$3,000-$3,499___________________________ 44 31 42 23 23 46$4,000-$4,999___________________________ 57 40 42 23 31 48

Differences among families living in different geographic areas and in cities of different size are less marked in respect to automobile purchase when measured in relation to ownership than when measured in relation to the total population studied. This was to be expected, since car ownership and purchase are both measures of the demand for car usage.

The ratio of families purchasing to families owning was higher in Columbus and Atlanta than in the other four large cities studied by the Bureau of Labor Statistics, but there were no consistent differences among the latter. Moreover, differences were negligible as among the middle-sized cities in six different localities.

The proportion of car owners that reported car purchase during 1935-36 was lower, at comparable income levels, in New York than in Providence, and lower, at income levels above $1,750, than in the smaller New England communities studied. Chicago tended to rank somewhat below Columbus and the smaller East Central cities in respect to the ratio of purchasers to owners, but the differences were not striking.

13 Figures from National Association of Sales Finance Companies, as reported in Automobile Manufacturers Association. Automobile Facts and Figures, 1936 edition.


THE AUTOMOBILE 19

Negro families, as has been noted, were generally found to own and purchase cars less frequently than white families with similar incomes in the same community. During 1935-36, however, the proportion of automobile owners that purchased cars tended to be greater among Negro than among white families. It is improbable that this reflects a normally higher replacement rate among Negro families. Rather, it is likely that Negro families as a group had postponed replacement during the depression years longer than white families. It may be that a larger number of Negro than of white families who were in comparable income groups in 1935-36 had sold their cars in the depth of the depression, and that the smaller proportion of automobile owners among Negroes as compared with whites at the same income level may have been in large part a reflection of depression conditions.

Expenses of Automobile Operation

Total automobile expenditures of car operators. Families that operate 14 automobiles must meet two types of expense, current operation expenses and depreciation costs. The families covered by the Bureau of Labor Statistics in the Study of Consumer Purchases furnished detailed information on expenditures for gasoline, oil, repairs, licenses and other current operation expenditures. They were not asked, however, to estimate depreciation on their automobiles. Nevertheless, since an automobile wears out sooner or later, depreciation is a real cost to the car operator. In this report it will be measured by distributing the total net expenditures for purchase among the operating families in any given group, although this represents a rough approximation because of the wide fluctuations in purchase from year to year.

Thus, using aggregate net expenditures for automobile purchase by the families in each income group that reported purchase as a measure of aggregate depreciation expense for all operating families in the group,15 we find that automobile operators with incomes of $1,000 to $1,250, in almost every urban group, spent over $100 on the average to cover current operation and depreciation charges during the year of the survey. Except among white families in New York, automobile operators with incomes of $2,000 to $2,250 spent somewhat more than $200 during the year. Thus, for these income groups, automobile operation entails expenditures that averaged about 10 percent of income during 1935-36. Expenditures increased markedly over the income range, but at the higher income levels, slightly less rapidly than

14 For discussion of the difference between number of families owning automobiles and number of families operating automobiles, see appendix C, notes on tables 3 and 5. The difference in numbers was generally small, and it was deemed preferable to analyze expenses of automobile operation for operators rather than for owners.15 The estimate of aggregate depreciation expense on the basis of aggregate expenditures for purchase is justified by the fact that trade-in allowances have been deducted from net expense for automobile purchase.


20 FAMILY EXPENDITURES IN SELECTED CITIESincome. Among families with incomes of $5,000 and more, the total automobile expenditures of car owners averaged more than $500 in all the cities studied except those of medium size in N ew England. (See table 4 .)16T a b l e 4.Estimated 1 average total automobile expenditures incurred by automobile operators, for white families in the large and middle-sized cities, at selected income levels

Income classRegion


PacificNorthwestLarge cities

$750-$999______________________________ $120 $65 $77 $87 $94 $100$1,250-$1,499__________________________ 131 134 177 133 182 158$1,750-$1,999__________________________ 217 227 242 172 207 248$2,250-$2,499__________________________ 239 294 301 218 279 354$3,000-$3,499__________________________ 308 332 349 320 297 392$4,000-$4,999__________________________ 399 433 430 378 374 443$7,500 and o v e r -------- ----------------------- 571 936 537 1,034 812 1,043Middle-sized cities

$750-$999______________________________ $106 $88 $118 $78 $88 $83$1,250-$1,499___________________________ 110 133 130 154 191 184$1,750-11,999__________________________ 252 200 222 226 228 211$2,250-$2,499___________________________ 258 282 232 258 277 318$3,000-$3,499___________________________ 453 320 342 306 283 383$4,000-$4,999_____ _____________________ 667 433 432 329 429 477$5,000 and over ___ _ _ _____ 297 556 520 542 510 5881 Depreciation on automobiles was estimated by distributing aggregate family expenses less trade-in allowances for automobile purchase during the year of the survey among automobile operators.The total automobile expenditures of families in the Pacific N orth

west averaged higher than those of families with similar incomes in other regions. Automobile operators in Portland, for example, spent over $300, on the average, at every income level above $2,000, while this was true of families in all but one of the other large cities only at the income levels above $3,000. Differences among families in other regions, however, were not uniform as among large and middle-sized cities.

In both the Northeast and East Central areas, the average total automobile expenditures of metropolitan and large-city families were very similar, at given income levels, during 1935-36, and likewise the expenditures of families in middle-sized and small cities. The latter generally exceeded the former.

As between Negro and white families in the same community, total automobile expenditures averaged higher at some income levels and lower at others.

16 The average total expenditures incurred by car-operating families may be derived from the data in pt. II by dividing the average total expense for automobiles (table 3) by the percentage of families reporting automobile operation (table 5) for corresponding groups of families. Data in the accompanying table 4 are presented by way of illustration.


THE AUTOMOBILE 21The differences that obtain among the various urban groups in

total automobile expenditures are of minor significance in themselves since they reflect the composite effect of several factors: The frequency of replacement ; the current expense of automobile operation, which, in turn, is affected not only by extent of car usage but also by such factors as State gasoline tax rates; and the net expense of automobile purchase for families purchasing. The ratio of car purchase to car ownership has been discussed in the preceding section. D ata on current operation expenses and net outlays for automobile purchase will be presented in sequence in the following sections of this chapter.

Average expenditures for current automobile operation in relation to fam ily income. Average expenditures for current operation by automobile operators vary less markedly with income than do the total expenditures entailed by ownership when the estimated expenditures for replacement are included as part of total expenditure. They ranged from slightly below $100 to $200 per year among families in most urban groups with incomes between $1,250 and $3,000. (See table 5.17) Among families with incomes below $1,000 they never averaged more than $90 and, among those with incomes of $5,000 and more, they averaged somewhat over $300.T a b l e 5 .Average expenditure by automobile operators for current automobile operation, including and excluding outlays for State gasoline taxes, for white families in 6 large cities, at selected income levels

Income classProvidence Columbus Atlanta Omaha- Council Bluffs Denver Portland

TaxincludedTaxexcluded






$750-$999____ $64 $61 $56 $47 $55 $44 $50 $43 $67 $57 $71 $59$1,250-$1,499_ _ 96 88 89 75 102 81 104 91 109 96 107 88$1,750-$1,999__ 140 131 116 101 133 109 117 102 125 111 143 121$2,250-$2,499_ _ 149 140 148 127 153 126 142 125 162 142 171 147$3,000-$3,499_ _ 212 199 159 138 199 159 217 191 186 166 208 181$4,000-$4,999_ _ 207 196 211 185 225 187 244 216 202 180 240 209$7,500 and over 332 313 388 340 410 348 411 367 362 329 567 500Differences between total and current expenses for automobile

operation were thus relatively greater at the high than at the low income levels because of the higher replacement rate among the upper income families. The percentage increase over a range beginning with families in the $1,000 to $1,500 group and ending w ith those in the $4,000 to $5,000 group, for example, as shown in table 6, was uniformly greater in respect to the total expenses incurred by automobile owners than in respect to their current operation outlays. Moreover,

17 The average expenditures of automobile owners for all current operation and for the constituent items may be derived from the data in pt. II, tables 3 and 5, by dividing the average expense for each (table 5) by the percentage of families in corresponding groups that owned cars (table 3, column 7).

1 5 2 0 3 5 4 0 -------- 3


22 FAMILY EXPENDITURES IN SELECTED CITIESin m ost cities the percentage increase in the total automobile outlays of car-operating families was less than that in incom e.18T a b l e 6 .Percentage increase in income and in the estimated total automobile expenditures and the current operation expenditures incurred by automobile operators, over the income range from $1,000 $1,500 to $4,000 $5,000, for white families in large and middle-sized cities

RegionCategory NewEngland EastCentral Southeast WestCentral

RockyMountainPacificNorthwest

Large cities

Family income ______________ _ _ _ _ 255 249 254 255 249 250Total automobile expenditures._ __ ____ 241 244 147 215 137 210Current operation expenditures. _______ 130 160 130 168 104 126Middle-sized cities

Family income _________ 242 257 253 254 244 247Total automobile expenditures. _ _____ 438 228 251 133 125 256Current operation expenditures_________ 208 149 116 132 115 185

The rise with income in expenditures for current operation probably reflects in very small part the greater cost of operating relatively heavy and expensive automobiles by high income families.19 It reflects to a much greater extent more extensive use of the automobile both for local transportation and for week-end and long-distance vacation trips by the high than by the low income families. In most cities, car-operating families with incomes below $1,000 reported that they drove less than 4,000 miles, on the average, during the year of the survey, while those with incomes of $4,000 and more averaged 8,000 and in some cases substantially more miles during the year. (See table 7.)T a b l e 7.Average number of miles driven by automobile operators, for white families in 6 large cities, at selected income levels

Income class Providence Columbus AtlantaOmaha-CouncilBluffs Denver Portland

$750-$999_ ___________________________ 2,448 5, 624 7,308 7,074 9,374 7, 601 13,028

3,112 5,583 6,172 7,863 8,139 10,011 16,453

2, 742 5,283 6,369 7,136 9,836 9,056 13,853

3,011 5,151 5,837 6,831 10,923 9,568 13,912

3,959 5,628 6,034 7,706 8, 443 8,341 12,129

3,805 5,830 7,088 7, 787 8,057 9,099 20,653

$1,250-$1,499__________________________$1,750-$1,999_ ________________________$2,250-12,499__________________________$3,000-$3,499__________________________$4,000-$4,999 ________________________$7,500 and over__ ___ _______ ___

is The data on income relate to all families, whether or not they owned automobiles. It is probable, however, that within a given income group, the incomes received by automobile owners did not differ materially from those of nonowners.

is The data collected by the Bureau of Labor Statistics in the Study of Consumer Purchases on the gross price of new cars purchased during 1935-36 suggest that operation of luxury type automobiles was confined largely to families with incomes higher than those of families covered in this survey.


THE AUTOMOBILE 23Factors other than income as related to average current expenditures by

automobile operators for automobile operation. The number of persons in a family tends to influence the amounts spent for automobile operation by operating families at given income levels. In most cities, the two-person families spend the m ost and the largest families studied, the least. Apparently the two-person families, with fewer household responsibilities, make more frequent and extended use of their cars.

The occupation from which a family derives the major portion of its earnings, on the other hand, appears to have little bearing on the current operation expenditures of automobile drivers.20

Geographic region has no consistent bearing on current expenditures for transportation. Portland ranked clearly above the other large cities, but among the middle-sized cities expenditures were highest in the New England region. Varying State gasoline tax rates have had a pronounced effect on intercity relationships in respect to current operation expenditures.21 Actual expenditures for current operation (gasoline tax included) tended to be lower at given income levels in Providence than in any other large city except Columbus. When the family outlays for State gasoline taxes during the year of the survey 22 are deducted from current operating expenses, however, Providence, with a low gasoline tax, ranks with Denver, and above Atlanta, Omaha, and Columbus. (See table 5.) The extent of car usage as judged by the average number of miles driven by automobile operators, was very similar in different geographic areas.

City size, like region, appears to bear no consistent relationship to current operation expenditures. The outlays of New York families were in general below those of families with similar incomes in smaller New England cities. Chicago families, on the other hand, usually spent more in this way than families in Columbus, and did not differ consistently in their spending from families in the East Central middle- sized and small cities.23

A t almost all comparable income levels, Negro car-operating families in New York spent more for automobile operation than white families that drove cars. In Columbus and the Southeastern cities, however, there were no consistent differences between white and Negro families in such expenditures.

20 See IT. S. Bureau of Labor Statistics Bulletins 642 through 647 and 649, Family Income and Expenditure, Washington, 1939, vol. II, ch. VI.21 Gasoline taxes, as all sales and excise taxes, were included in the expense for the item to which they applied.22 Computed by multiplying the State gasoline tax rate by the average number of gallons of gasoline purchased by owning families, on the assumption that all gasoline was bought within the State of residence. State gasoline tax rates, averaged for the years 1934, 1936, and 1936, were as follows: Providence, 2 cents; Columbus, 4 cents; Atlanta, 6 cents; Omaha, 4.6 cents and Council Bluffs, 3 cents; Denver, 4 cents; Portland, 5 cents.23 Gasoline taxes in the States represented by the expenditure survey in the Northeast or East Central areas did not differ enough to affect these relationships.


24 FAMILY EXPENDITURES IN SELECTED CITIESApportionment of average expenditures for current automobile opera

tion. Gasoline outlays are, of course, the m ost important of the expenses for current operation. (See table 8.) Together with outlaysT a b l e 8 .Percentage of current automobile operation expenditures allocated to specified items, for white families in selected cities, at selected income levels

Income classAverage operation expenditures by automobile operators

Percentage distribution of current operation expenditures among

Gasoline and oil

Tires, tubes, repairs, replacements, and services

Garage rent and parking LicensesAutomobileinsurance Other i

New York$1,000-$1,249.................... ....... $89 39 17 29 15$1,500-$1,749_____________ 115 51 12 21 9 3 4$2,000-$2,249___...................... 92 56 9 20 11 1 3$2,500-$2,999__............. .......... 175 49 11 18 8 10 4$4,000-$4,999^............. .......... 228 38 12 23 6 16 5

Providence

$1,000-$1,249.................... ....... $84 58 5 21' 15 1$1,500-$1,749_____________ 97 54 9 19 14 3 1$2,000-$2,249.................... ....... 140 52 10 20 13 4 1$2,500-$2,999______________ 189 51 11 16 12 9 1$4,000-$4,999_____ ________ 207 44 13 16 12 14 1Atlanta

$1,000-$1,249_____________ $94 75 15 2 4 4 (*)$1,500-$1,749 ____________ 105 72 19 (*) 4 5$2,000-$2,249_____________ 144 73 14 3 3 5 2$2,500-$2,999_____________ 176 67 18 2 3 9 1$4,000-$4,999_____________ 225 66 15 3 3 12 1Denver

$1,000-$1,249_____________ $88 65 21 2 10 1 1$1,500-$1,749_____________ 119 65 15 3 8 7 2$2,000-$2,249_____________ 151 66 15 3 7 7 2$2,500-$2,999_____________ 163 64 14 4 7 8 3$4,000-$4,999_____________ 202 61 16 1 7 13 2New England:: Middle-sized cities 2

$1,000-$1,249_____________ $104 47 16 8 9 20 (*)$1,500-$1,749_____________ 140 51 12 9 9 19 (*)$2,000-$2,249_ _ _____ _______ 143 54 9 8 10 18 1$2,500-$2,999_____________ 211 50 15 6 8 20 1$4,000-$4,999_____________ 305 58 7 4 7 17 7Rocky Mountain: Middle-sized cities

$1,000-$1,249_____________ $94 67 11 1 10 6 5$1,500-$1,749_____________ 115 70 14 2 7 6 1$2,000-$2,249_____________ 150 61 16 2 7 10 4$2,500-$2,999_____________ 203 61 17 2 7 10 3$4,000-$4,999_____________ 211 60 13 5 7 13 21 Includes expenditures for accessories, fines, damages, tolls, dues to automobile associations, and tips to garage and gas-station attendants.2 Automobile accident insurance is compulsory in Massachusetts.* Less than 1 percent.


THE AUTOMOBILE 25for oil, they generally accounted for 50 to 70 percent of the total among high as well as low income families during 1935-36. Differences among the urban groups in respect to the share of the total spent in this manner reflect in large part the varying State tax rates referred to above.

They reflect in part, also, variations in garage and parking charges. Thus, gasoline expenditures are relatively less important for both white and Negro families in New York City. Garage and parking expenses average at least 20 percent of all operation expenses at most income levels, since land values in New York are the highest in the country and there is a prohibition against all-night parking. Outside the Northeast area, outlays for garage rent and parking space generally accounted for less than 3 percent of the operation bill in large as well as small communities. Negro families in Atlanta reported no outlays for garage rent or parking when their incomes were below $2,250, although at least a few white families in that city made such expenditures at every income level above $750.

Average dollar expenditures of automobile operators for gasoline and oil, respectively, are presented in table 9 for selected communities. The increase with income in such expenditures is clearly marked. Nevertheless, in most cities families with incomes of $2,500 to $3,000 spent less than three times as much for gasoline as those with incomes of $500 to $1,000.T a b l e 9 .Average expenditure by automobile operators for gasoline and oil, for white families in large and middle-sized cities, at selected income levels

Regon

Income class New England Southeast West Central PacificNorthwestGas Oil Gas Oil Gas Oil Gas Oil

$750-$999_________________________$1,250-$1,499______________________$1,750-$1,999______________________$2,250-$2 499______________________$3,000-$3,499______________________$4,000-$4,999______________________$7,500 and over.______ _ ___ _ __ _

$750-$999_________________________$1,250-$1,499______________________$1,750-$1,999______________________$2,250-$2,499______________________$3,000-$3,499______________________$4,000-$4,999______________________$5,000 and over. _______ ___________

Large cities$26.8056.9069.9071.90 94.40 81.20141.00

$4.80 5.10 7.30 7.50 10.30 9.80 16.60

$36. 50 73.80 84.20 97. 60 138. 50 135. 70 228.80

$3. 50 6.80 7.20 11. 20 10.60 12.60 18.90

$29.80 63. 30 70. 70 84.00 117.10128.40208.40

$3. 70 6.50 8.40 10.10 12.70 12. 60 24.40

$44.60 67.70 85.00 94.30105.60 122.10281.60

$4.90 7.70 9.30 11. 50 12.20 13.10 35.70Middle-sized cities

$21.60 42.2063.30 67.10119.20 164.8083.30

$2.80 5.50 9.30 8.90 10.30 11.40 9.10

$40.80 61.00 85.00 86.20 102.90 134. 90 146. 50

$5.607.808.407.309.609.9015.60

$31.90 52.90 60.60 72.80114.90101.90 119. 70

$4.60 9.70 8.00 10.00 14.40 12.20 16.10

$38. 90 57.90 80.50 93.60 100.90 149.10 136.30

$5. 30 6.50 8.60 11. 70 10.80 15.60 15.10

Expenditures for tires, tubes, repairs, and replacements averaged approximately 9 to 12 percent of the total for m ost urban groups.



They were somewhat more important, however, in the western comm unities than in other sections of the country. While automobile ownership was much more frequent in the communities covered in the W est, the replacement rate in the large western cities was lower than in Columbus and Atlanta, and in the middle-sized western cities similar to that in other communities of the same size. It is possible, therefore, that more older cars, in need of more frequent repair, were owned by the western families than by families living elsewhere.

Outlays for licenses, including drivers licenses for members of the economic family, fees for filing proof of ownership, and property taxes on automobiles declined steadily in relative importance at successive income levels.

Paym ents for automobile insurance, on the other hand, increased very rapidly with income as a proportion of all operating expenses, approximately balancing the decline in expenditures for licenses. In most cities automobile insurance was a negligible item in the expenditures of all car operators at the lower income levels, but was substantial at the upper income levels. This increase is accounted for in part by the higher face values of the policies carried by the higher income families that had automobile insurance, but to a greater extent, by the increase with income in the proportions of automobile operators that reported insurance. (See table 10.) The relatively high proportions of car operators that had automobile insurance m ay reflect in part the fact that automobiles purchased on the installm ent plan through financing companies must be insured until the full balance due is paid up.T a b l e 10 .-Percentage of automobile operators that had automobile insurance, and average insurance payments by families that had automobile insurance, for white families in 6 large cities, at selected income levels

Income class Providence Columbus AtlantaOmaha-CouncilBluffs Denver Portland

Percentage of automobile owners that had insurance$750-$999______________________________ 4 12 19 18 14 10$1,250-$1,499___________________________ 5 13 36 32 35 36$1,750-$1,999___________________________ 19 33 59 39 48 43$2,250-$2,499___________________________ 19 53 72 75 63 54$3,000-$3,499___________________________ 50 70 55 77 65 77$4,000-14,999___________________________ 67 84 72 93 78 86$7,500 and over___________ ___________ 91 97 91 98 75 98

Average insurance payments by families that had automobile insurance$750-$999__________________________ $10.00 $10.00 $6.70 $8.00 $12. 20 $20.00$1,250-$1,499_ ________________ 36.70 16.70 10.60 14.10 17.80 19.60$1,750-$! ,999______________________ . 20.70 25.60 19.70 23.00 18.20 25.60$2,250-$2,499___________________________ 26.70 23.90 20. 00 22.20 21.80 31.60$3,000-$3,499__________ _ 33.20 28.40 30.20 31.30 29.00 40.70$4,000-$4,999___________________ _ 43.20 36.30 38.90 39.70 32.20 43.70$7,500 and over 63.50 59.70 63.20 58.20 51.90 101.10


THE AUTOMOBILE 27

The proportion of car operators that had automobile insurance was consistently low in Providence and relatively high in Omaha and Portland. This does not represent a persistent regional relationship, however, for, among the middle-sized cities, automobile insurance was least common in the Southeast and m ost common in New England, since in Haverhill, Mass., one of the two middle-sized cities studied there, automobile insurance is compulsory.

Outlays for automobile accessories such as radios and heaters constituted, on the average, a very small proportion of the current operating expenses of automobile operators. Tolls, damage payments, and fines likewise were negligible in average amount.

Expenditure for Automobile Purchase

The average net expenditure for cars purchased has been treated as an approximate measure of the automobile depreciation expense. The increase over the income range in net expenditures for purchase reflected the composite effect of the rise in the proportion of purchasers and of the rise in net expenditures for purchase.

Average net expense jo r automobile purchase by jam ities reporting purchase. N et expenditures for automobile purchase increase somewhat less rapidly with income when aggregate expenditures are averaged for families that purchased rather than for the larger number of families that owned automobiles. N et expenditures for purchase in most cities averaged less than $100 for the few families with incomes below $1,000 that purchased cars and $500 to $600 or more for those with incomes of $5,000 or more.24 This difference reflects the rise with income in the proportion of families that purchased new as opposed to used cars, and in the outlays for each type of car.

The average net expenditures for automobile purchase by families that purchased cars during 1935-36 are compared in table 11 for white families in selected urban groups over a range that begins with families having incomes of $1,000 to $1,500 and ends with those receiving incomes of $4,000 to $5,000. In general the percentage increase in purchase expense was less than that in income. Expenditures of families with incomes of $4,000 to $5,000 were generally two to three times as great as those of families with incomes of $1,000 to $1

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