Academic journal article Monthly Labor Review

Goods vs. Services: From the Perspective of Consumer Spending

Academic journal article Monthly Labor Review

Goods vs. Services: From the Perspective of Consumer Spending

Article excerpt

William D. Passero, "Goods vs. Services: From the Perspective of Consumer Spending," presented at the American Council on Consumer Interests Annual Meetings, Chicago, IL, April 6-9, 1988.

In recent years, one of the major themes which has emerged in tracing the course of the American economy has been the basic shift from the production of goods to the provision of services. This paper examines the phenomenon of the shift towards a service economy from the perspective of consumer spending. The first section analyzes aggregate data from the Consumer Expenditure Survey with other national sources of data for the period 1972-73 to 1984-85. The results show that purchase decisions of consumers painted a different picture of the economy-one much less services-oriented-than that portrayed by employment or output measures. In the aggregate, U.S. consumers have allocated an increasing share of their consumption dollar to services. Nonetheless, overall total consumption has been divided fairly evenly between goods and services.

Several factors contribute to the disparity between consumption estimates and the other data sources. The range of services that consumers can directly purchase is markedly smaller than the range of services that workers produce. …

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