NEW YORK, Jan. 10 /PRNewswire/ -- About 57 million U.S. households now
have discretionary income, up from nearly 54 million in 1997-1998, according
to a new study released today by The Conference Board. But the percentage of
the American population with discretionary income has edged down to
51 percent, compared with 52 percent six years ago.
The study shows that 82 percent of all discretionary income is held by
those earning $100,000 and more. Average discretionary income for this segment
-- $62,110 -- is nearly three times above the U.S. average of $21,657.
The Conference Board has been examining discretionary income trends for
more than a decade. Households with discretionary income, as defined in the
study, are those whose spendable income exceeds that held by households with
similar demographic features. "Spendable income" is defined as money available
after taxes have been paid.
"Discretionary income is a major force in the health and growth of the
overall economy," says Lynn Franco, Director of The Conference Board's
Consumer Research Center. "Rising numbers of affluent households who control
sizable amounts of discretionary income signal a favorable outlook for the
luxury, travel and entertainment markets, as well as companies in the
furnishings and housing sectors."
WHERE DISCRETIONARY INCOME IS HIGHEST, AND LOWEST
Households in New York, New Jersey and Pennsylvania top the country in per
capita discretionary income ($9,699). Ranking next are households in New
England (including Connecticut, Massachusetts, Maine, New Hampshire, Rhode
Island and Vermont), where per capita discretionary income is $9,522. Per
capita discretionary income is lowest in the West North Central region
(including Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska and
Kansas) at $7,040.
WHO CONTROLS THIS INCOME?
-- Households with earnings of less than $50,000 represent about 26
percent of all households with discretionary income, but less than 3 percent
of total discretionary income. Average household discretionary income in this
group is only $2,075 -- 90 percent below the national average.
-- The Conference Board study shows that households in the 35-50 age group
constitute close to 36 million households, and nearly 20 million have
discretionary income. This segment represents 34 percent of all households
with discretionary income, and approximately 40 percent of all discretionary
-- More than 14 million of the nearly 26 million households headed by
persons between the ages of 50-65 have discretionary income. These 14 million
households, who possess 30 percent of total discretionary income, make up
almost 26 percent of all households with discretionary income.
-- The remaining 22 million households are in the 65 and over age segment,
and 10 million have discretionary income. This segment represents 18 percent
of all households with discretionary income and nearly 13 percent of all
Source: A Marketer's Guide to Discretionary Income
Consumer Research Center, The Conference Board
SOURCE The Conference Board