Hispanic Affluence by State - Implications for Marketing

The American Community Survey (ACS) of the US Census Bureau provides important insights into the lives of Americans. Friends of mine frequently ask me about the level of affluence among US Hispanics. Those households with incomes of $75,000 or higher are generally considered to be affluent. What states have higher percentages of affluent Latinos?  How do Latinos compare with the overall population in terms of affluence across States?

In order to try to answer these questions I obtained 5 year estimates from the ACS (2006 - 2010) for household income and compared Hispanics with the overall population by State, then created an index of Latinos as a percentage of the overall population in terms of household income. The latter index I thought would help us visualize which States have a larger gap as compared with others.

The following Table contains the States, including the District of Columbia and Puerto Rico, with the lowest disparities in terms of the percentages of Latino households with incomes of $75K+, compared with the corresponding percentages for the overall population for each State.  The last column represents an index of disparity.  The larger the index the better, comparatively, Hispanics do in that State.  The index was created by dividing the Latino percentage over the overall percentage of those with household incomes of $75K +.



The above table shows that the States with lower disparities of percentages of households with incomes of $75K per year or more are either those that have generally lower incomes, or those that have unusual economies with higher incomes overall such as Alaska, and Hawaii. Regardless of overall economic trends in these States, it is interesting to observe that Hispanics are generally doing quite well across the board as the proportion of affluent Latinos suggests that generally about 25% of their households earn significant incomes.

The table below shows the States with the largest disparities.




The States with the largest disparities between Latinos and the overall population show a trend similar to that in the above table. In States with higher proportions of high earner households overall, Latinos tend to do proportionally less well, for example California, Arizona, Delaware, Texas and Utah. At this lower end of the disparity distribution, however, even those States that have lower proportions of affluent households also show a sharp contrast when compared with their Hispanic household component. These States are exemplified by Alabama, South Carolina, Tennessee, Montana, Kansas, Arkansas, Oklahoma, and Idaho.

The big lesson is that generally speaking Hispanics seems to be doing quite well in terms of having a relatively high representation of high earning households overall.  There are gaps that are due to economic conditions and opportunities but for marketers, the lesson is clear. High earning Latino households are abundant and their significant presence points to their potential for enhancing the bottom line of many marketers that realize their potential. Be these opportunities cars, homes, recreational vehicles, vacations, travel, education, restaurants, etc. savvy marketers can start taking action when they see that they may not be culturally addressing an important part of the potential customer base.