Purdue see frugal spending with tax refunds
A monthly analysis of consumer spending conducted by Purdue University reveals Americans are more likely to make frugal use of their 2023 tax refunds, including buying “better” food. The Purdue Center for Food Demand Analysis and Sustainability says the national average of a tax refund this year is $1,940. The center asked 1,200 consumers nationwide how they will use the government refund.
“Of those who will be spending their tax refunds, improving food purchases is top of mind, which suggests that refunds are a part of reinforcing some households’ food situation,” said Jayson Lusk, the head and Distinguished Professor of Agricultural Economics at Purdue, who leads the center.
Lusk says Americans likely to receive smaller tax refunds than they have in recent years, and most people will not be going out to spend this money in frivolous ways.
“The most common response chosen by about half of respondents was they were going to save it. The next most common response was that people plan to pay down debt. Other folks then plan to go on vacation,” explained Lusk in an interview with the Associated Press. “The fourth most highest was that people plan to buy either more or better quality food.”
Lusk says there seems to be some optimism about food inflation improving, but consumers are not willing or able to spend more on food than they are currently.
“I would also not expect food spending to start falling unless economic conditions worsen, which is a real possibility,” added Lusk.
The Consumer Food Insights Report also asked consumers about fresh versus frozen food. The survey showed more than 60% of respondents think fresh food as “somewhat better” or “much better” nutritionally than frozen food.
“That’s particularly interesting because the best scientific evidence we have suggested in terms of nutrient content, there’s not a lot of difference between fresh and frozen,” said Lusk.
While fresh food offers better taste, it still faces the challenge of being more expensive. This is especially true when produce is out of season. Lusk says there is the added cost of tossing fresh food when not consumed in a timely manner.
“Where frozen fruits and vegetables tended to perform relatively well was on perceptions related to price. So, perceived as a bit more affordable, and in some cases perceived to have lower waste than fresh components.”
Click here to read the monthly report, which also examined religious affiliation in correlation to food behaviors.