Mark Whitehouse of the WSJ observes that spending on alcohol collapsed between 2007 and 2009:
From 2007 to 2009, the 24,033 households in the middle fifth by income cut their average annual spending on alcohol by a stunning 20.1%, the Labor Department reported Tuesday in its Consumer Expenditures Survey
This decrease was not distributed evenly, however:
Middle-income households cut back on booze spending far more than other groups. Slightly more well-heeled households, whose income ranged from $57,944 to $91,290, actually spent 6.9% more on alcoholic beverages from 2007 to 2009. The poorest fifth cut back by 3.4%.
This tracks the fact that middle-income households are the households most burdened by debt. What Whitehouse doesn’t mention, to my surprise, is that alcohol spending tends to hold steady during economic downturns, as Nate Silver noted last year:
There has generally not been much of a relationship between alcohol purchases and changes in GDP — the correlation is essentially zero. Nor have alcohol purchases historically been any kind of lagging or leading indicator.
But something was very, very different in the fourth quarter of 2008. Sales of alcohol for off-premises consumption were down by 9.3 percent from the previous quarter, according to the Commerce Department. This is absolutely unprecedented: the largest previous drop had been just 3.7 percent, between the third and fourth quarters of 1991.
Nate goes on to offer a few theories:
Sales of jewelry and watches were off by 7.2 percent in the fourth quarter, the third-largest drop ever recorded. Casino gambling receipts are down about 8.5 percent from a year ago, far and away the largest decrease ever over four consecutive quarters.
What’s doing well? The movies. The movies, also historically a recession-proof industry but not a counter-cyclical one, are doing terrifically well. Motion picture theaters increased their revenues by 10.9 percent in the fourth quarter, according to the Commerce Department. But the movies are not typically seen as extravagant. You don’t feel guilty after purchasing a movie ticket; you feel kind of wholesome.
Nate suggests that we’re seeing a collective embrace of Calvinist self-denial. This might account for the growing popular frustration with rising public debt levels. Or not.