Electronic products such as cell phones, computers, and digital video disc players have become a part of most household purchases today. Have we seen these purchases change people’s spending habits? N.C. Cooperative Extension economist Mike Walden explains the results of a recent analysis.
“We have a recent analysis that compared consumer spending in 2007 to the spending that consumers do today in 2010, and we have seen some major shifts in spending shares. People are spending more as we might expect on things like electronics, which includes TVs, computers, phones, cameras, et cetera. And where are they getting that money? Well, they are actually spending less in terms of percentage of their overall spending on things like furniture, appliances, tools, household equipment and houseware.
“And why is this? Well I think one reason is because … we do have some new electronic products that really didn’t exist or at least didn’t exist in terms of their full array of characteristics — products like cell phones, and more and more people are wanting cell phones or wanting smart phones because of everything they can do. Also we have seen some price reductions in these electronic products over time, and that has caused people to buy more.
“But there is no question — no question — that the advances in the new products we have seen in the electronic area has really shaken up consumer spending.”