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Patton-Nelson Personal Consumption Tables updated.

The Patton-Nelson Personal Consumption Tables were last published in the Spring Summer, 1991 issue of the Journal of Forensic Economics.(1) Since these tables are widely used by forensic economists and by Lawyers and Judges Publishing Co., it is appropriate to provide this update for publication.

The Consumer Expenditure Data, 1994-95 which was made available by the Bureau of Labor Statistics (BLS) in December, 1996 is the most current and comprehensive consumption data available for use at this time.(2) These data are the updated version of the BLS data used in the 1991 article and have been used to provide the updated tables attached. The tables are presented and numbered in an identical manner as in the 1991 article so that the reader can continue to use the 1991 article for explanatory and reference purposes.

Regressions in natural log form were run on the data in Table 2 for each family size and each gender to produce the following equations where X is the natural logarithm of the family income and Y is the natural logarithm of the percent of family income which would have been directly consumed by the deceased.
                                      Adult Males
Family Size                             Equation
1                  High         Y: 9.388379 - 0.48568 X
                   Low          Y: 9.459873 - 0.50537 X
2                               Y: 9.438490 - 0.58219 X
3                               Y: 8.699544 - 0.53364 X
4                               Y: 8.482503 - 0.52468 X
5 or More                       Y = 7.270828 - 0.42790 X

                                     Adult Females
Family Size                             Equation

1                  High         Y = 9.388379 - 0.48568 X
                   Low          Y = 9.459873 - 0.50537 X
2                               Y = 9.291877 - 0.56584 X
3                               Y = 8.658551 - 0.52626 X
4                               Y = 8.408726 - 0.51499 X
5 or More                       Y = 7.303141 - 0.42846 X

Family Size                            [R.sup.2]
1                                        0.9824
                                         0.9790
2                                        0.9946
3                                        0.9955
4                                        0.9732
5 or More                                0.9480

Family Size                            [R.sup.2]

1                                        0.9824
                                         0.9790
2                                        0.9952
3                                        0.9948
4                                        0.9658
5 or More                                0.9614


[TABULAR DATA 1-2 NOT REPRODUCIBLE IN ASCII]

Table 3 contains the results of calculating the percentage of family income, at $5,000 increments, which would have been consumed by an adult male or female who is now deceased. These are the figures which are used to determine the magnitude of the adjustment for personal consumption costs in wrongful death or survival actions.
Table 3 (Updated)
Incremental Consumption Cost Percentage

                                      Family Size
                         1
Income Level        Low -- High           2              3
                                                 Male

    10,000          122.1-136.3          58.9           44.0
    15,000         99.5 -- 112.0         46.5           35.5
    20.000         86.1 -- 97.4          39.4           30.4
    25,000         76.9 -- 87.4          34.6           27.0
    30,000         70.1 -- 80.0          31.1           24.5
    35,000         64.9 -- 74.2          28.4           22.6
    40,000         60.6 -- 69.5          26.3           21.0
    45,000         57.1 -- 65.7          24.5           19.7
    50,000         54.2 -- 62.4          23.1           18.6
    55,000         51.6 -- 59.6          21.8           17.7
    60,000         49.4 -- 57.1          20.8           16.9
    65,000         47.4 -- 54.9          19.8           16.2
    70,000         45.7 -- 53.0          19.0           15.6
    75,000         44.1 -- 51.2          18.2           15.0
    80,000         42.7 -- 49.7          17.6           14.5
    85,000         41.4 -- 48.2          17.0           14.0
    90,000         40.2 -- 46.9          16.4           13.6
    95,000         39.2 -- 45.7          15.9           13.2
   100,000         38.2 -- 44.6          15.4           12.9
   105,000         37.2 -- 43.5          15.0           12.6
   110,000         36.4 -- 42.5          14.6           12.2
                                               Female

    10,000        122.1 -- 136.3         59.2           45.2
    15,000         99.5 -- 112.0         47.0           36.5
     20.00         86.1 -- 97.4          40.0           31.4
    25,000         76.9 -- 87.4          35.2           27.9
    30,000         70.1 -- 80.0          31.8           25.4
    35,000         64.9 -- 74.2          29.1           23.4
    40,000         60.6 -- 69.5          27.0           21.8
    45,000         57.1 -- 65.7          25.3           20.5
    50,000         54.2 -- 62.4          23.8           19.4
    55,000         51.6 -- 59.6          22.5           18.4
    60,000         49.4 -- 57.1          21.5           17.6
    65,000         47.4 -- 54.9          20.5           16.9
    70,000         45.7 -- 53.0          19.7           16.2
    75,000         44.1 -- 51.2          18.9           15.7
    80,000         42.7 -- 49.7          18.2           15.1
    85,000         41.4 -- 48.2          17.6           14.7
    90,000         40.2 -- 46.9          17.1           14.2
    95,000         39.2 -- 45.7          16.6           13.8
   100,000         38.2 -- 44.6          16.1           13.5
   105,000         37.2 -- 43.5          15.6           13.1
   110,000         36.4 -- 42.5          15.2           12.8

                              Family Size
Income Level
                                 Male

                         4                5

    10,000             38.5              27.9
    15,000             31.1              23.5
    20.000             26.7              20.8
    25,000             23.8              18.9
    30,000             21.6              17.5
    35,000             19.9              16.3
    40,000             18.6              15.4
    45,000             17.5              14.7
    50,000             16.5              14.0
    55,000             15.7              13.5
    60,000             15.0              13.0
    65,000             14.4              12.5
    70,000             13.9              12.1
    75,000             13.4              11.8
    80,000             12.9              11.5
    85,000             12.5              11.2
    90,000             12.1              10.9
    95,000             11.8              10.7
   100,000             11.5              10.4
   105,000             11.2              10.2
   110,000             10.9              10.0

                               Female

    10,000             39.1              28.7
    15,000             31.7              24.1
     20.00             27.3              21.3
    25,000             24.4              19.4
    30,000             22.2              17.9
    35,000             20.5              16.8
    40,000             19.1              15.8
    45,000             18.0              15.1
    50,000             17.1              14.4
    55,000             16.2              13.8
    60,000             15.5              13.3
    65,000             14.9              12.9
    70,000             14.3              12.5
    75,000             13.8              12.1
    80,000             13.4              11.8
    85,000             13.0              11.5
    90,000             12.6              11.2
    95,000             12.3              10.9
   100,000             11.9              10.7
   105,000             11.6              10.5
   110,000             11.4              10.3


It will be noted that the updated tables generally show higher personal consumption levels when viewed on a nominal basis. This would be expected considering the ongoing existence of inflation in the cost of living for most family units. The cost of goods and services has increased by 34% from the time the previous data were collected. However, if the data were adjusted for inflation, then the personal consumption levels only show an increase at the lowest levels of family income while actually showing a decrease at the higher levels of family income. For example, the earlier data showed a personal consumption rate of 16% of a family income of $60,000 for an adult male in a family of three persons. The comparable inflation adjusted income in the current data would be approximately $80,000. The adult male in a family of three persons with a family income of $80,000 would have personal consumption costs equal to 14.5% of the family income. The actual impact of the updated personal consumption tables will depend primarily on the level of the family income.

(1) The 1991 article was based on Consumer Expenditure Survey data which was collected in 1986 and 1987.

(2) This is unpublished data which comes from the "Average annual expenditures and characteristics, Tables 3401, 3421, 3431, 3441 and 3451, Consumer Expenditure Survey, 1994-95."

References

Patton, Robert T., and David M. Nelson, "Estimating Personal Consumption Costs in Wrongful Death Cases," Journal of Forensic Economics, 1991, 4(2), 233-240.

Walter K. Lierman, Robert T. Parton and David M. Nelson(*)

(*) Walter K. Lierman, Ph.D. and Robert T. Patton, Ph.D. are financial and economic consultants in Oregon and Washington. David M. Nelson, Ph.D. is a Professor of Economics at Western Washington University in Bellingham, WA.
COPYRIGHT 1998 National Association of Forensic Economists
No portion of this article can be reproduced without the express written permission from the copyright holder.
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Author:Lierman, Walter K.; Patton, Robert T.; Nelson, David M.
Publication:Journal of Forensic Economics
Date:Jan 1, 1998
Words:1397
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