Resources for free and low-cost economic development analysis, part 1

If you need good economic numbers and analysis in a hurry, you should consider hiring a consultant or using fee-based services. (Among the most commonly used are Claritas, ESRI and InfoUSA, but we do not make any endorsements.)

But if  you're willing to put a little time into it, there are plenty of free and low-cost resources that can help you get a pretty good understanding of your local economy.  Federal and state agencies provide a wide range of free resources.  In some cases, their websites will do simple calculations.

For economic research, you want to get information on consumer behavior and characteristics and business activity.  This essay, the first of two, focuses on information about consumers.

For consumer information, some of the best free sources are:

• American Factfinder.  This site from the US Census Bureau contains information from the 2005-2009 American Community Survey (the best source of demographic data until all of the 2010 Census numbers come out).  2010 Census numbers can be found on American Factfinder 2.  Warning: The new American Factfinder is difficult to use.  Please go through the tutorial before using it. 
  The ACS' community profiles provide interesting overviews of incomes, occupation, and industry data, as well as lesser-known data (commuting time, language spoken at home, etc.)
• The Consumer Expenditure Survey can help you estimate what people in your study area are likely to spend on various items.  The CES, from the federal Bureau of Labor Statistics, is a survey of spending patterns on a wide variety of things, from mortgages to shoes.  Unfortunately, the spending categories are not detailed.  You wouldn't know, for example, how much individuals spent on movie tickets.  But you could find out how much they spend on "fees and admissions" and develop some ideas from that.
  One interesting feature of CES is that it has tables showing spending patterns by geographic region, education, race, and other demographic characteristics.
• The federal Bureau of Economic Analysis also has information on consumer spending.  While in some ways more comprehensive than what is found in the Consumer Expenditure Survey, BEA's free analysis is done at a national level.  
• One of the more unusual studies of consumers is the Multicultural Economy series from the University of Georgia's Selig Center for Economic Growth.  This annual study explores buying power -- i.e. disposable income -- for ethnic groups in the United States and every state. You have to pay for the full, current report, but as of 2011, the executive summary of the previous report was available free.
• Psychographics is more valuable than demographics, which is why research companies can charge good money for it.  Psychographics combines information about demographics (age, race, income) with information on spending habits (based on such things as magazine subscriptions).  While you can't get a full psychographic report, you can get a little information from the "My Best Segments" pages from Claritas, a fee-based provider.  The online form tells you the five top psychographic clusters in a particular zip code. 

You can use these numbers from these sources to show how much income or expected spending there might be in your area. It won't show you the whole economic picture (although, to be fair, no amount of research will), but it can give you a head start.  And the money you save on getting consumer information you can use to get more out of fee-based services or economic development consultants. 

--Leonardo Vazquez, AICP/PP

Director, Professional Development Institute

If you know of any additional free resources for consumer information, please feel free to share that information with us.  We'll update this essay as appropriate.