The Rich Spend More on Mass Transit than the Poor

New Study Shows How Americans Pay for Transportation

The Rich Spend More on Mass Transit than the Poor
May 8, 2015

The US Energy Information Administration (USEIA) recently released an analysis of household spending on gasoline and public transit, taken from the most recent data available (2013) from the Consumer Expenditure Survey (CES) conducted by the Bureau of Labor Statistics (BLS). Many of the results seem predictable, but a few are surprising at first glance.

The average household spending on both gasoline and public transport was $3,148, with only a $200 difference between the highest and lowest regions geographically. However, there were significant divergences when analyzing gasoline usage and mass transit usage separately.

One of the more interesting results out of the survey was that wealthier people spend more on public transit options than the poor. The wealthiest 20% of Americans spent far more on public transit by far, at slightly over $1400 annually. That topped the national average of $537 by almost a factor of 3, and was more than 8 times the spending rate of the poorest 20% ($163). For survey purposes, the wealthiest 20% was defined as those making at least $95,000 annually and the poorest 20% were defined as those making under $18,000 annually.

Granted, you aren’t likely to see Bill Gates and Warren Buffett sharing a seat on the crosstown bus—but this result is not shocking when you dig into the details. The wealthy also spend more on gasoline, and have more vehicles. In other words, they can afford to drive and travel whenever and wherever they want, while poorer Americans cannot.

Gasoline usage for the wealthiest 20% averaged a bit more than $4,000, while the poorest 20% spent approximately $1,200. Not only do the wealthy travel more often, they have and maintain more vehicles (an average of 2.8 vs. 0.9 for the poorest 20%).

Geography also adds into the equation. The Northeast had the highest amount of spending on public transit at nearly $800 on average—perfectly logical since the Northeast has the largest amount of its population near access to large mass transit systems in urban areas. The Northeast also has the lowest amount of gasoline usage at around $2,400 annually. The South had the opposite profile with the highest annual spending on gasoline at around $2,700 and the lowest spending on public transit at around $300.

Again, this is a logical conclusion—the South is more spread out with fewer large urban areas and less developed mass transit options. Tack on the fact that prices are generally higher in the Northeast, and the results aren’t surprising.

This data precedes the recent drop in oil prices, but the conclusions would probably be similar. Gasoline usage is very price sensitive and tends to track reasonably well with oil prices, while public transit is generally more predictable and stable. Gasoline usage will probably go up, but in proportion with all categories (geographical area and income level).

The survey reinforces some common sense observations—if you have a well-developed mass transit system in an urban area, more people are likely to use it; if you have a poorly developed mass transit system and more open/suburban areas than urban, driving and gasoline consumption increases.

Also, if you have more money, you are less likely to critically evaluate your transportation options and will just go with whatever is the most convenient (which is the pubic transit system in many Northeastern urban areas.) So keep an eye out for the millionaires on the subway, and enjoy your ride with whatever commuting method you use.

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