Affordability and Household Expenses, Big and Small: Evidence from Public Federal Data 2013-2024
Abstract
I synthesize publicly available data to analyze how U.S. household income and spending evolved between 2013 and 2024, and discuss policy implications. Using Consumer Expenditure Survey data supplemented with Personal Consumption Expenditures and Consumer Financial Protection Bureau data, I analyze expanded household spending, incorporating third-party healthcare and education spending, and credit card interest. I find that real incomes for the average household kept pace with rising expenses, but households in the bottom two income quintiles consistently spent more than they earned. When third-party spending on behalf of consumers is included, healthcare emerges as the largest and fastest-growing expense, alongside shelter, with food and vehicles the other two major expense categories driving household budgets. By contrast, any other spending category represents a relatively small share of total household expenditures in aggregate data. I argue that meaningful policy interventions aimed at improving affordability must primarily address four large structural cost categories: shelter (via increased supply, reducing construction costs, and helping renters become homeowners); healthcare (via transparency and fixing incentives); and food and vehicles (via trade and competition).