Why do average annual expenditures exceed income for some of the demographic groups? How can consumer units spend more than they earn?
Data users may notice that average annual expenditures presented in the income tables sometimes exceed income before taxes for the lower income groups. For data prior to 2004, the primary reason for that is believed to be nonresponse to questions about income, a common problem in household surveys. The average incomes shown in the published tables for 2003 and earlier are derived from information provided by complete income reporters (consumer units that provide information for at least one of the major sources of their income, such as wages and salaries, self-employment income, or retirement income). However, even complete income reporters may not have provided a full accounting of all income from all sources. Research has shown that some complete reporter consumer units classified in the lower income classes have expenditure levels that are more typical of upper income consumer units. Their expenditures raise the average expenditure levels of the income class in which they are classi
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