Trends in consumer expenditures and prices for public utilities (2018)!

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1 Trends in consumer expenditures and prices for public utilities (2018)! Janice A. Beecher, Ph.D.! INSTITUTE OF PUBLIC UTILITIES MSU! ipu.msu.edu Please do not distribute by electronic or other means! or cite without permission.! Revised 6/2/18!!!!!!!!! MICHIGAN STATE UNIVERSITY!

2 Introduction! This research summary is based on data from the Bureau of Labor Statistics of the U.S. Department of Labor ( Data are provided on both household expenditures and the consumer price index (CPI) with a focus on public utility services! } 2!

3 Household expenditures on utilities in the U.S.! Consumer expenditures on utilities for a four-person household in ($5,102 and 6.6% of total household expenditures) Natural gas (.6% of exp.), $443, 9% Fuel oil and other fuels (.1% of exp.), $89, 2% Water and other public services (1% of exp.), $747, 14% Telephone (2.6% of exp.), $1,994, 39% Electricity (2.4% of exp.), $1,829, 36% $5,000 $4,000 Consumer expenditures on utilities by household size () $747 Water and other public services $89 $443 Fuel oil and other fuels $3,000 $2,000 $340 $61 $242 $1,994 Natural gas Telephone Electricity $818 $1,000 $1,829 $945 Single-person Four-person } 3!

4 Household expenditures on utilities over time! Annual consumer expenditures on utilities for a four-person household ($) $5,000 $4,000 $709 $115 $513 Water and other public services Fuel oil and other fuels $3,000 $1,820 Natural gas $2,000 Telephone $1,000 $1,868 Electricity 8% 7% Consumer expenditures on utilities for a four-person household (% of total expenditures) Water and other public services 6% 5% 4% 3% 2% 1% 0.9% 0.2% 0.7% 2.4% 2.5% Fuel oil and other fuels Natural gas Telephone Electricity 0% } 4!

5 Utilities expenditures by income level and regressivity! $6,000 Consumer expenditures on utilities by income quintile (all consumers $) $5,500 $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $321 $47 $220 $719 $1,013 $453 $74 $288 $1,095 $550 $81 $323 $1,427 $657 $88 $384 $1,752 $1,309 $1,436 $1,569 $865 $136 $558 $2,164 $1,895 Water and other public services Fuel oil and other fuels Natural gas Telephone Electricity 10% Consumer expenditures on utilities by income quintile (all consumers %) Lowest quintile 2nd quintile 3rd quintile 4th quintile Highest quintile 9% 8% 7% 6% 5% 4% 1.28% 0.19% 0.88% 2.86% 1.23% 0.20% 0.78% 2.98% 1.15% 0.17% 0.68% 2.99% 1.01% 0.14% 0.59% 2.70% 0.77% 0.12% 0.50% Water and other public services Fuel oil and other fuels Natural gas 3% 2% 1% 4.03% 3.56% 3.01% 2.42% 1.93% 1.69% Telephone Electricity 0% Lowest quintile 2nd quintile 3rd quintile 4th quintile Highest quintile } 5!

6 Change in percentage of expenditures on utilities! 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% -0.10% -0.20% -0.30% -0.40% -0.50% -0.60% -0.70% Change in percentage of consumer expenditures on utilities by income quintile (-) Lowest quintile 2nd quintile 3rd quintile 4th quintile Highest quintile Electricity Natural Gas Fuel oil and other fuels Water and other public services Telephone } 6!

7 Trends in expenditures by income! Income before taxes by income quintile $210,000 $180,000 $150,000 $120,000 $90,000 $60,000 $30,000 Lowest quintile 2nd quintile 3rd quintile 4th quintile Highest quintile 11% Trends in consumer expenditures on utilities by income quintile (% of total expenditures) 10% Lowest quintile 9% 2nd quintile 8% 3rd quintile 7% 4th quintile 6% Highest quintile 5% 4% } 7!

8 Trends in expenditures by region! $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 Consumer expenditures on utilities by region 25% 20% 15% 10% 5% Northeast $ South $ Midwest $ West $ Northeast % South % Midwest % West % 0% } 8!

9 Trends in expenditures by area! $4,000 $3,500 Consumer expenditures on utilities by area 25% Rural $3,000 $2,500 20% Urban $2,000 $1,500 15% Rural % $1,000 10% $500 Urban % 5% } 9!

10 Trends in expenditures by housing! $5,000 Consumer expenditures on utillities by housing 25% $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 20% 15% 10% Owners Renters Owners % Renters % 5% } 10!

11 CPI trends for utilities (US)! Trends in the Consumer Price Index (CPI) for utilities Water & sewer (1953) Cable/sat. television () Garbage (1985) 400 Postage (1935) CPI (1983=100) Fuel oil (1935) Electricity (1913) Natural gas (1935) CPI (1997=100) Landline tel. services (2009=100) Internet (1997=100) 50 Wireless (1997=100) } 11!

12 CPI trends for utilities (US)! 550 Trends in Consumer Price Index (CPI) for utilities (general) 500 Water & sewer (1953) CPI (1983=100) Electricity (1913) Natural gas (1935) Telephone services (1997=100) } 12!

13 CPI trends for household expenditures (US)! 900 Trends in CPI for major household expenditures (1983=100) 800 College tuition (1978) 700 Medical care (1935) 600 Food (1913) 500 Housing (1967) 400 CPI (1913, 1983=100) 300 Fuels and utilities (1953) 200 Gasoline, unl. reg. (1976) 100 Telephone services (1997=100) } 13!

14 Expenditure and price trends combined! Household expenditures and CPI for electricity $3, Electricity expenditures (nominal) Annual household expenditures (family of four) $2,500 $2,000 $1,500 $1,000 $500 Electricity expenditures ($) Electricity CPI CPI for electricity 0 } 14!

15 Expenditure and price trends combined! Annual household expenditures (family of four) $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 Household expenditures and CPI for natural gas Natural gas (nominal) Natural gas expenditures ($) Natural gas CPI CPI for natural gas 0 } 15!

16 Expenditure and price trends combined! Household expenditures and CPI for water and sewer maintenance $1, $900 Water expenditures (nominal) Annual household expenditures (family of four) $800 $700 $600 $500 $400 $300 $200 Water expenditures ($) Water CPI CPI for water and sewer maintenance $ } 16!

17 Expenditure and price trends combined! Household expenditures and CPI for telecommunictions $2, Telecom (nominal) Annual household expenditures (family of four) $2,000 $1,600 $1,200 $800 $400 Telecom expenditures ($) Telecom CPI CPI for telecommunications } 17!

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