Transportation Spending by Low-Income California Households ...

eport looks primarily at cost and not at quality of transportation service,
we cannot draw conclusions about the relative return on transportation
expenditures for low- and higher-income households.
Third, low-income households spend 63 percent of their budget on
food and housing, leaving only 37 percent available for transportation
and everything else, whereas higher-income households spend only 51
percent of their budget on food and housing, leaving 49 percent available
for transportation and other items. This pattern could be interpreted as
evidence that low-income households do not spend as much on
transportation because they do not have much discretionary income left
after paying for their basic necessities. However, the connection between
transportation decisions and housing location decisions makes it difficult
to disentangle the interplay between the transportation budget share and
the housing budget share.
Three items in the household budget increase their share as longterm
income rises—transportation, personal insurance and pensions, and
“other expenses.” The budget shares of housing and food both decline
(Table 3.5). The other budget categories—apparel and services, health
care, entertainment, and education—consume approximately the same
proportion of the household budget regardless of the income level of the
household.
To identify the budgetary tradeoffs that low-income households face,
we divided the low-income sample into equal thirds—those with low,
medium, and high transportation expenditures. On average, low-income
households in the top tercile spend 27 percent of their budget on
transportation and those in the bottom tercile spend only 4 percent on
transportation, for a difference of 23 percentage points (Table 3.6). In
dollar amounts, those in the top tercile of transportation expenditures
spend $4,189 more on transportation than those in the bottom tercile of
transportation expenditures ($5,268 for the top tercile less $1,079 for the
bottom tercile).
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have to spend on transportation and what people choose to spend on transportation.”
We hypothesize that for higher-income households, a greater proportion of
transportation spending is going to “what people choose to spend on transportation”
than is true for low-income households.
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