The Multicultural Economy 2003.

Backed by fundamentally strong national and regional economies, U.S. consumers will continue to experience substantial but varying annual gains in after-tax income, which powers their spending on goods and services. The Selig Center’s estimates and projections of buying power for 1990-2008 show that minorities—African Americans, Asians, Native Americans, and Hispanics—definitely share in this success, and together wield formidable economic clout.

As these groups increase in number and purchasing power, their growing shares of the U.S. consumer market draw avid attention from producers, retailers, and service providers alike. The buying power data presented here and differences in spending by race and/or ethnicity suggest that one general advertisement, product, or service geared for all consumers increasingly misses many potentially profitable market opportunities. As the U.S. consumer market becomes more diverse, advertising, products, and media must be tailored to each market segment. With this in mind, new entrepreneurs, established businesses, marketing specialists, economic development organizations, and chambers of commerce now seek estimates of the buying power of the nation’s major racial and ethnic minority groups. Going beyond the intuitive approaches often used, the Selig Center’s estimates provide a comprehensive statistical overview of the buying power of African Americans, Asians, Native Americans, and Hispanics for the U.S. and all the states. Data are provided for 1990-2008. Majority—or White—buying power also is reported. [Researchers should note that multiracial buying power is estimated only as a residual, and therefore the estimates are not discussed and should be used with extreme caution.]

Simply defined, buying power is the total personal income of residents that is available, after taxes, for spending on goods and services —that is, the disposable personal income of the residents of a specified geographic area. Unfortunately, there are no geographically precise surveys of annual expenditures and income of the nation’s major racial and ethnic groups. Even estimates of expenditures by race or ethnicity are difficult to find, especially for individual states and counties.

The Selig Center addresses this problem by providing estimates of black, Native American, Asian, White, and Hispanic buying power from 1990-2003 for the nation, the fifty states, and the District of Columbia. Also, five-year projections (2004-2008) are provided for all groups. Estimates for Georgia’s eight metropolitan areas and 159 counties and for Florida’s 19 metropolitan areas and 67 counties also are included. These current dollar (not adjusted for inflation) estimates and projections indicate the growing economic power of various racial or ethnic groups; measure the relative vitality of geographic markets; help to judge business opportunities for start-ups or expansions; gauge a business’s annual sales growth against potential market increases; indicate the market potential of new and existing products; and guide targeted advertising campaigns. The estimates for 1990-2002 supersede those previously published by the Selig Center. The revised data for those years, as well as the preliminary estimates for 2003-2008, should be considered only as the first step toward a more comprehensive analysis of the market, however. Anyone considering the investment of substantial capital in a new enterprise, a new product line, or a new advertising campaign will need extensive feasibility analysis to determine market opportunities more precisely.

In this analysis, buying power estimates are reported only for 1990, 2000, 2003, and 2008, but annual data for the
entire period, 1990-2008, are available on the CD that is included with the latest edition of The Multicultural Economy.

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