Knowledge Center

Buying Power–What Is It?


Buying power is defined as the total personal income of residents that is available, after taxes, for spending on virtually everything they buy, including goods and services. It is also called “disposable income.”1

Women’s Buying Power


In general, buying power is challenging to measure, and this is particularly the case when trying to measure the buying power of women. Both Canadian and U.S. Census income data are reported by household unit. Since about half of women are married householders,2 3 their individual spending is lost in the “household” spending, and thus difficult to isolate. The finding that most women are the “principal shopper” in their household implies that women make the majority of household purchases or decisions to make household purchases, but there is little concrete data4 associated with that implication. Census findings do imply that spending increases with income, so a case can be made that as women’s incomes increase, so does their spending. By combining statistics below, some evidence for both trends is supported.5

Income & Labor Statistics Show Women Are Working and Earning More

 

  • Education is a factor in income and spending – higher degrees lead to higher median salaries as well as increased expenditures.
    • In Canada, full-time year-round earners with a university degree earned substantially more than their counterparts without a degree. Young women with university degrees out-earned their counterparts without a high school diploma by over $20,000.6
    • The median weekly earnings in the United States 2012 was $1,624 for people with doctorate degrees, $1,735 for people with professional degrees, $1,300 for people with master’s degrees, and $1,066 for people with bachelor’s degrees, compared to $785 for those with associate’s degrees, $727 for people with some college but no degree, $652 for people with high school diplomas, and $471 for those with no high school diploma.7
    • College graduates’ average annual expenditures in the United States in 2011 were $68,903, compared to $39,704 for high school graduates. College graduates spent $8,026 on food, $23,123 on housing, and $2,169 on household furnishings and equipment compared to $5,648 spent by high school graduates for food, $13,571 for housing, and $1,114 on household furnishings and equipment.8
    • In Canada in 2007-2008, women earned more undergraduate degrees (61.5%), master’s degrees (54.6%), and just shy of half (44.2%) of all doctorate degrees.9
    •  In the United States in 2008-2009, women earned more bachelor’s (57.2%), master’s (60.4%), and doctoral degrees (52.3%) than men, and just less than half (49.0%) of all first professional degrees*.10
  • In the United States, married couple families in which the husband and wife work had far higher median incomes ($90,592 in 2008) than married couple families in which the husband worked but the wife did not ($60,037).11
  • Of the 24,739,000 married couples with children (under the age of 18) in the U.S. in 2011, 57.5% were dual-career couples.12
  • In the United States between 1990 and 2008, women’s median income grew from $16,081 to $20,867; however, men’s median income ($33,161) was still more than $11,000 more than women’s.13
  • In Canada in 2005, women’s median income was $20,460 compared to $32,224 for men.14
  • In the U.S. in 2010, 29.2% of wives in dual-working couples earned more than their husbands.15
  • In Canada in 2008, 15.0% of dual-earner wives were their families' primary breadwinners – earning more than 55% of the family’s total – when measured in weekly earnings.16
    • This is up from 11.0% in 1997.17

Women Make Key Purchasing Decisions

  • 74.9% of women identified themselves as the primary shoppers for their households, according to MRI’s Survey of the American Consumer in Fall 2011.18
  • According to a study from the Boston Consulting Group, women in the U.S. reported “controlling” 72.8% of household spending and women in Canada reported “controlling” 67.2% of household spending.19 Additionally, women “control $12 trillion of the overall $18.4 trillion in global consumer spending.”20 When probed further, the survey actually asked whether women “controlled or influenced” purchases, which is much a broader distinction.21


People of Color Buying Power in the United States

  • African-Americans’ Buying Power
    • African-Americans’ buying power has increased from $316.3 billion in 1990 to $946.6 billion in 2010 and is projected to climb to $1.3 trillion in 2017. 22
    • The percentage change in African-Americans’ buying power between 1990 and 2017 is 312.8%, higher than the 255.8% growth rate for whites, but lower than other race/ethnic groups. 23
    • African-Americans’ share of the consumer market was 8.5% in 2010, but will rise to 8.7% in 2017. 24
  • Asian-Americans’ Buying Power
    • Asian-American buying power has increased from $115.4 billion in 1990 to $609.2 billion in 2010 and is projected to climb to $1.0 trillion in 2017. 25
    • The percentage change in Asian-Americans’ buying power between 1990 and 2017 is 786.2%, the highest of all race/ethnic groups. 26
    • Asian-Americans’ share of the consumer market was 5.5% in 2010. 27
  • Latinas/Latinos’† Buying Power
    • Latinas/Latinos’ buying power has increased from $210.0 billion in 1990 to $1.0 trillion in 2010 and is projected to climb to $1.7 trillion in 2017. 28
    • The percentage change in Latinas/Latinos’ buying power between 1990 and 2017 is 698.3%.29
    • Latinas/Latinos’ share of the consumer market was 9.1% in 2010, and is expected to rise to 11.1% by 2017. 30
  • Native Americans’ Buying Power
    • Native Americans’ buying power has increased from $19.6 billion in 1990 to $87.3 billion in 2010, and is projected to climb to $147.7 billion in 2017. 31
    • The percentage change in Native Americans’ buying power between 1990 and 2017 is 653.6%, higher than the percentage change for most other racial/ethnic groups. 32
    • Native Americans’ share of the consumer market was 0.8% in 2010. 33

LGBT Buying Power in the United States

  • The total buying power of adult LGBT individuals is projected to be $790 billion.34
  • 87% of LGBT adults and 75% of non-LGBT adults would consider a brand that has equal benefits for LGBT employees. In addition, 47% of LGBT adults are more likely to purchase a company’s products or services when an advertisement has been tailored to an LGBT audience.35
  • 23% of LGBT adults have switched products or services in the past year because a different company was supportive of the LGBT community. 36
    • Even if a brand is costlier or less convenient, 71% of lesbian and gay people would remain loyal to that brand should they be supportive of and friendly to LGBT issues. 37


Notes:

* Category includes the following degrees: Chiropractic (D.C. or D.C.M.), Dentistry (D.D.S. or D.M.D.), Law (L.L.B., J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Pharmacy (Pharm.D.), Podiatry (D.P.M., D.P., or Pod.D.), Theology (M.Div., M.H.L., B.D., or Ordination), and Veterinary Medicine (D.V.M.)

† Latinas/Latinos may be of any race.

 

How to cite this product: Catalyst. Catalyst Quick Take: Buying Power. New York: Catalyst, 2013.