State of the World 2004: Consumption By the Numbers

THE GLOBAL CONSUMER CLASS:

The global consumer class (users of televisions, telephones, and the Internet, along with the culture and ideals these products transmit) totals some 1.7 billion people—more than a quarter of the world. Almost half of this class now lives in developing countries, which also have the greatest potential to expand the ranks of consumers.


CONSUMER SPENDING AND POPULATION BY REGION:

Table 1–1. Consumer Spending and Population, by Region, 2000

Region Share of World Private Consumption Expenditures Share of World Population

  ( percent )
United States and Canada 31.5 5.2
Western Europe 28.7 6.4
East Asia and Pacific 21.4 32.9
Latin America and the Caribbean 6.7 8.5
Eastern Europe and Central Asia 3.3 7.9
South Asia 2.0 22.4
Australia and New Zealand 1.5 0.4
Middle East and North Africa 1.4 4.1
Sub-Saharan Africa 1.2 10.9

Private consumption expenditures—the amount spent on goods and services at the household level—topped $20 trillion in 2000, up from $4.8 trillion in 1960. Some of this four-fold increase occurred because of population growth, but much of it was due to advancing prosperity in many parts of the globe.

Production efficiencies of the 20th century have driven much of the consumption boom.

  • Modern industrial workers now produce in a week what took their 18th century counterparts four years.
  • In the U.S. only about 12 hours of work per week were needed in 2000 to produce as much as 40 hours did in 1950.
  • In the semiconductor industry, production efficiencies helped drive the cost per megabit of computing power from roughly $20,000 in 1970 to about 2 cents in 2001.

Global spending on advertising reached $446 billion in 2002 (in 2001 dollars), an almost nine-fold increase over 1950. More than half is spent in the U.S. markets.



HEALTH COSTS OF CONSUMPTION:

  • Smoking contributes to around 5 million deaths worldwide each year. In 1999, tobacco-related medical expenditures and productivity losses cost the United States more than $150 billion—almost 1.5 times the revenue of the five largest multinational tobacco companies that year.
  • Overweight. In the United States, an estimated 65 percent of adults are overweight or obese, leading to an annual loss of 300,000 lives and at least $117 billion in health care costs in 1999.
  • Sprawl. A study of more than 200,000 people in 448 U.S. counties found that those living in low-density suburban communities spent less time walking and weighed 6 pounds more on average than those living in densely populated areas. Suburbanites were also found to be as likely as cigarette smokers to have high blood pressure. The average U.S. adult now spends 72 minutes a day behind the wheel, often alone.
  • Time pressures are often linked to the need to work long hours to support consumption habits—and to upgrade, store, or otherwise maintain possessions. Americans are among the most overworked people in the industrial world, putting in 350 hours (9 workweeks) more on the job each year than the average European.



GROWING DISPARITIES:

LUXURY

  • In 2002, 1.12 billion households—about three quarters of the world's people—owned at least one television set.
  • Some 41 million passenger vehicles rolled of the world's assembly lines in 2002, five times as many as in 1950. The global passenger car fleet now exceeds 531 million, growing by about 11 million vehicles annually.
  • Consumers across the globe now spend an estimated $35 billion a year on bottled water.

NECESSITY

  • In 1999, some 2.8 billion people—two in every five humans on the planet—lived on less than $2 a day.
  • In 2000, one in five people in the developing world—1.1 billion total—did not have “reasonable access“ to safe drinking water.
  • 2.4 billion people worldwide—two out of every five—live without basic sanitation.
  • Providing adequate food, clean water, and basic education for the world's poorest could all be achieved for less than people spend annually on makeup, ice cream, and pet food.

Table 1-6: Annual Expenditure On Luxury Items Compared With Funding Needed To Meet Selected Basic Needs

Product Annual Expenditure Social or Economic Goal Additional Annual Investment Needed to Achieve Goal

Makeup $18 billion Reproductive health care for all women $12 billion
Pet food in Europe and United States $17 billion Elimination of hunger and malnutrition $19 billion
Perfumes $15 billion Universal literacy $5 billion
Ocean cruises $14 billion Clean drinking water for all $10 billion
Ice cream in Europe $11 billion Immunizing every child $1.3 billion



CAN MONEY BUY HAPPINESS?

Declining happiness. Findings from the World Values Survey, an assessment of life satisfaction in more than 65 countries conducted between 1990 and 2000, indicate that income and happiness tend to track well until about $13,000 of annual income per person (in 1995 purchasing power parity). After that, additional income appears to yield only modest additions in self-reported happiness.

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