What Is Buying Power?

Buying power is defined as “the total personal income of residents that is available, after taxes, for spending on virtually everything that they buy, but it does not include dollars that are borrowed or that were saved in previous years.”1 It is sometimes referred to as “disposable income” or “discretionary income.” Buying power demonstrates that women and underrepresented populations have enormous influence as consumers, which may not necessarily correspond with the size of their populations. Smart companies will invest in a diverse workforce and leadership team, positioning themselves to better understand and compete for the market share of these growing, powerful consumer bases.

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Global

Women Control the Majority of Household Spending Across the World2

Globally, women in 2013 controlled 64% of household spending and $29 trillion of consumer spending worldwide.3

• In 2018, women are estimated to control about $40 trillion in consumer spending across the world.4

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United States

People of Color Hold a Growing Share of Buying Power in the American Economy5

 

Buying Power in the United States by Race/Ethnicity6
	Share of US Population (2018)	Share of Buying Power (2018)	Buying Power (US$) (2018)	Percent Increase in Buying Power (2010-2018)
White	76.4%	82.1%	$12.1 trillion	28.8%
Black	13.4%	8.8%	$1.3 trillion	35.3%
Asian	6.2%	6.8%	$1.0 trillion	67.9%
Latinx	18.3%	10.4%	$1.5 trillion	51.2%
Native American	1.3%	0.8%	$114.6 billion	39.0%
Multiracial	2.8%	1.5%	$224.7 billion	57.0%

The buying power of Latinx and Asian Americans is on the rise.7

• Latinx buying power ($1.5 trillion) surpasses the entire economies of all but 10 nations across the world. It is larger than the GDP of South Korea but smaller than the GDP of Canada.8
• Asian Americans’ buying power ($1.0 trillion) dwarfs all but 16 nations across the globe. This amount is higher than the GDP of Turkey but less than the GDP of Indonesia.9

Black Americans’ buying power is also growing, fueled by increasing education levels and the number of Black-owned companies.10

In 2014, the combined buying power of Black women, Asian women, and Latinas was estimated at $1 trillion.11

Multicultural Millennials12 have an estimated buying power of over $65 billion per year.13

 

Women Are Earning a Higher Share of Household Income14

In 2014, Prudential estimated women’s buying power at $5 trillion.15

Household spending in 2016: $12.5 trillion.16

• Single women across all income brackets spent, on average, $33,786 on goods and services in 2015–2016.17
• Working married women contributed over a third (37%) of their families’ incomes in 2015.18
• Over a quarter (29%) of wives earned more than their husbands in 2015, an increase from 18% in 1987.19

 

The Buying Power of LGBT Americans Is Nearing $1 Trillion20

In 2015, the LGBT population’s combined disposable personal income was an estimated $917 billion.21

Same-sex couples have a higher rate of employment than married opposite-sex couples and a higher median income than all opposite-sex couples.22

• Couples with household incomes over $100,000:23
  • 45% of same-sex couples.
  • 41% of married opposite-sex couples.

 

People with Disabilities, Their Families and Communities Make Up a Powerful Consumer Base24

In the United States, working age (16–64) people with disabilities have an estimated total disposable income of $490 billion.25

• Households with people with disabilities make more shopping trips (and spend more) per year than households without people with disabilities.26

 

Millennials Expect Brands to Connect with Their Values27

Half of Millennials aged 18-24 and over a third (38%) of Millennials aged 25–34 indicated that brands “say something about who I am, my values, and where I fit in” in 2014.28

In 2017, just over half (51%) of Millennials reported being more likely to buy from a company led by a CEO who publicly took a stance on an issue they cared about.29

 

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Additional Resources

Catalyst, Quick Take: Women’s Earnings—The Wage Gap.

Catalyst, Quick Take: Why Diversity and Inclusion Matter.

Ann C. Foster, “Consumer Expenditures Vary by Age,” Bureau of Labor Statistics, Beyond the Numbers, vol. 4, no. 14 (December 2015).

Nielsen, African-American Women: Our Science, Her Magic (2017).

Nielsen, Asian American Women: Digitally Fluent with an Intercultural Mindset (2017).

Nielsen, “Black Impact: Consumer Categories Where African Americans Move Markets,” February 15, 2018.

Nielsen, “Female Connected Consumers in Canada,” August 18, 2016.

Nielsen, Latina 2.0: Fiscally Conscious, Culturally Influential & Familia Forward (2017).

Michael J. Silverstein, Abheek Singhi, Carol Liao, and David Michael, Driving Growth: The Female Economy in China and India (The Boston Consulting Group, 2012).

How to cite this product: Catalyst, Quick Take: Buying Power (November 27, 2018).

 

1. Jeffrey M. Humphreys, The Multicultural Economy 2018 (Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2018): p. 4.

2. The Boston Consulting Group (BCG), “Women Want More: Updated Findings on the World’s Largest, Fastest-Growing Market,” Webinar Presentation, September 2013.

3. The Boston Consulting Group (BCG), “Women Want More: Updated Findings on the World’s Largest, Fastest-Growing Market,” Webinar Presentation, September 2013.

4. The Boston Consulting Group (BCG), “Women Want More: Updated Findings on the World’s Largest, Fastest-Growing Market,” Webinar Presentation, September 2013.

5. Jeffrey M. Humphreys, The Multicultural Economy 2018 (Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2018): p. 5, 9.

6. Jeffrey M. Humphreys, The Multicultural Economy 2018 (Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2018): p. 12-15.

7. Jeffrey M. Humphreys, The Multicultural Economy 2018 (Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2018): p. 7, 9.

8. Jeffrey M. Humphreys, The Multicultural Economy 2018 (Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2018): p. 4.

9. Jeffrey M. Humphreys, The Multicultural Economy 2018 (Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2018): p. 7.

10. Jeffrey M. Humphreys, The Multicultural Economy 2018 (Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2018): p. 5.

11. Prudential, A Total Market Approach: Winning with Women and Multicultural Consumers (2014).

12. Nielsen defines multicultural Millennials as “those individuals of African American, Asian American, and Hispanic heritage.” Nielsen, Multicultural Millennials: The Multiplier Effect (2017): p. 6.

13. Nielsen, Multicultural Millennials: The Multiplier Effect (2017): p. 9.

14. Bureau of Labor Statistics, Women in the Labor Force: A Databook (2017).

15. Prudential, A Total Market Approach: Winning with Women and Multicultural Consumers (2014).

16. Bureau of Economic Analysis, “Table 2.5.5: Personal Consumption Expenditures by Function,” National Income and Product Accounts (2017).

17. Bureau of Labor Statistics, “Table 4012: Consumer Units of Single Females by Income Before Taxes: Average Annual Expenditures and Characteristics, Consumer Expenditure Survey, 2015-2016,” Consumer Expenditure Surveys, CE Tables (2017).

18. Bureau of Labor Statistics, Women in the Labor Force: A Databook (2017).

19. Bureau of Labor Statistics, Women in the Labor Force: A Databook (2017).

20. “America’s LGBT 2015 Buying Power Estimated at $917 Billion,” Witeck Communications, Inc./The National Gay & Lesbian Chamber of Commerce press release, July 20, 2016.

21. “America’s LGBT 2015 Buying Power Estimated at $917 Billion,” Witeck Communications, Inc./The National Gay & Lesbian Chamber of Commerce press release, July 20, 2016.

22. US Census Bureau, “Table 1: Household Characteristics of Opposite-Sex and Same-Sex Couple Households,” 2016 American Community Survey (2018).

23. US Census Bureau, “Table 1: Household Characteristics of Opposite-Sex and Same-Sex Couple Households,” 2016 American Community Survey (2018).

24. Michelle Yin, Dahlia Shaewitz, Cynthia Overton, and Deeza-Mae Smith, A Hidden Market: The Purchasing Power of Working-Age Adults with Disabilities (American Institutes for Research, April 2018): p. 11.

25. Michelle Yin, Dahlia Shaewitz, Cynthia Overton, and Deeza-Mae Smith, A Hidden Market: The Purchasing Power of Working-Age Adults with Disabilities (American Institutes for Research, April 2018): p. 5.

26. Nielsen, Reaching Prevalent, Diverse Consumers with Disabilities (2016): p. 12.

27. Christine Barton, Lara Koslow, and Christine Beauchamp, The Reciprocity Principle: How Millennials Are Changing the Face of Marketing Forever (The Boston Consulting Group, January 2014): p. 9.

28. Christine Barton, Lara Koslow, and Christine Beauchamp, The Reciprocity Principle: How Millennials Are Changing the Face of Marketing Forever (The Boston Consulting Group, January 2014): p. 7-9.

29. Weber Shandwick and KRC Research, CEO Activism in 2017: High Noon in the C-Suite (2017).