Stability of U.S. consumption expenditure patterns: 1996–1999

A cornerstone of applied consumer demand analysis is a strong belief in invariant tastes and preferences. In this exercise, this invariance is tested through a principal components analysis of 14 exhaustive categories of consumption expenditure using household expenditure information from the on-going BLS Quarterly Consumer Expenditure Surveys. Sixteen quarters of date for 1996 through 1999 are analyzed. The results provide strong empirical evidence in support of structural stability in underlying consumption relationships that account for about 85 percent of the variation in U.S. consumer expenditure. Some (speculative) thoughts relating this structural stability to common underlying cultural and genetic factors are offered in conclusion.