Because every American
should have access
to broadband Internet.

The Internet Innovation Alliance is a broad-based coalition of business and non-profit organizations that aim to ensure every American, regardless of race, income or geography, has access to the critical tool that is broadband Internet. The IIA seeks to promote public policies that support equal opportunity for universal broadband availability and adoption so that everyone, everywhere can seize the benefits of the Internet - from education to health care, employment to community building, civic engagement and beyond.

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Special Reports » Access to Broadband Internet: Top Ten Areas of Saving — 2015

Access to Broadband Internet: Top Ten Areas of Saving — 2015

 
 



METHODOLOGY

In updating the “Top 10 Ways Being Online Saves You Money” report, IIA looked at the top areas of consumer spending, and the discounts that are available to Internet users.  Based on the 2014 Consumer Expenditure Survey released by the U.S. Department of Labor, we used online resources and applications to find discounts on essentials like housing, apparel, gasoline and food.  Mobile broadband and apps have changed the way that people shop online, providing access to discounts on everything from leisure activities to groceries. Some areas of this analysis, like housing, gasoline and newspaper expenditures, required data specific to certain cities.  For the purposes of this report, we chose five of the top 12 U.S. cities by population (New York, Chicago, Los Angeles, Dallas and Jacksonville) also keeping geographic diversity in mind. Overall, we found that the savings in this year’s analysis ($10,504.25) were significantly higher than those in our 2013 analysis ($8,674) and the year prior ($8,870).

We looked at similar products and used similar websites for comparison, though our research revealed several new studies on Internet savings in the health insurance and automotive categories, along with a new collection of apps available for tablets and other mobile devices.

The greatest sources of additional savings in this year’s analysis were found in two categories: entertainment and automotive.  We found that “cutting the cord” on traditional cable TV subscriptions in favor of streaming content via Netflix or a similar service could produce significant savings.  In the automotive category, we found that using an online tool like TrueCar could save on a new car purchase.  In a departure from last year’s methodology, we factored in the average annual cost of a mobile data plan AND home Internet connection ($1,440).

The below methodology provides more detail as to the calculations used for each savings category.

ONE. HOUSING. POTENTIAL SAVINGS: $2,413/YR (16.53%)

Source: Search based study on apartments in New York, Chicago, Los Angeles, Dallas and Jacksonville Methodology: Sampled 50 online postings in the above markets to determine average cost savings relative to local apartment rent.  Considered the average annual expenditure on shelter ($17,798) minus the annual mortgage interest and charges for owned homes ($3,200) based on the Department of Labor annual study on consumer expenditures.  Applied 16.53% savings factor to the remaining average expenditure for apartment living ($14,598). Source examples: www.craigslist.org, Craigslist App, www.trulia.com, Trulia Rent App, www.zillow.com, Zillow App

TWO. AUTOMOTIVE. POTENTIAL SAVINGS: $3,000 (A ONETIME SAVINGS OF 9.26%)

Source: Cost analysis based on average new car purchase price in 2014
Methodology: Applied $3,000 savings factor from TrueCar.com to the average 2014 vehicle purchase cost net outlay ($32,386) based on a report by Edmunds.

THREE. HEALTH INSURANCE. POTENTIAL SAVINGS: $430/YR (15%)

Source: Kaiser Family Foundation Study
Methodology: Applied 15% savings factor from Kaiser study to the average amount spent on health insurance ($2,868) based on the Department of Labor annual study on consumer expenditures.

FOUR. FOOD. POTENTIAL SAVINGS: $1,020/YR (25.68%)

Source: Search based study on basic basket of groceries based on top selling items (Carbonated beverages, Milk, Fresh bread, Produce, Snacks, Cheese, Frozen dinners/entrees, Cold cereal) Methodology: Created a standard basket of monthly groceries to establish a baseline retail cost.  Conducted a series of online searches against the baseline to identify cost savings exclusive to the Internet.  Potential savings based on cost reductions at the aggregate basket level.  Applied 25.68% savings factor to the average annual expenditure on food at home ($3,971) based on the Department of Labor annual study on consumer expenditures. Source example: www.couponmom.com, www.peapod.com, www.coupons.com

FIVE. NON PRESCRIPTION DRUGS. $59/YR (17.52%)

Source: Search based study on common over the counter medicines (Pain Relievers, Antacids, Cold Remedies, Allergy Relief, Natural Remedies) Methodology: Created a standard basket of the best-selling non-prescription drugs to establish a baseline retail cost.  Conducted a series of online searches against the baseline to identify cost savings exclusive to the Internet.  Potential savings based on cost reductions at the aggregate basket level.  Applied 17.52% savings factor to the average annual expenditure on non-prescription drugs, $338 annually according to a study by the Consumer Healthcare Products Association.
Source example: www.drugstore.com, www.overstockdrugstore.com

SIX. GASOLINE. POTENTIAL SAVINGS: $303/YR (12.28%)

Source: Search based study on lowest gasoline prices in New York, Chicago, Los Angeles, Dallas and Jacksonville Methodology:  Researched average gas prices for each of the above cities, and found the lowest advertised prices in each, for a savings of 12.28% off of average gasoline expenditure ($2,468) based on the Department of Labor annual study on consumer expenditures.
Source example: www.gasbuddy.com, GasBuddy App

SEVEN. ENTERTAINMENT. POTENTIAL SAVINGS: $3,476/YR (63.02%)

Source: Search based study on restaurant dining, sporting/concert tickets and leisure activities in New York, Chicago, Los Angeles, Dallas and Jacksonville
Methodology: Applied savings factor of 55.64% on dining outside of the home ($2,787) and entertainment such as concerts, events and leisure activities to the entertainment budget ($2,728) based on the Department of Labor annual study on consumer expenditures.
Source example: Groupon App, Living Social App.
Also added cost savings of “cutting the cord” on cable TV.  To calculate savings, we looked at the average monthly cost of a cable subscription in the U.S. ($99, according to Yahoo Finance) and assumed the use of a streaming service like Netflix.  Applied savings factor of 89.91% to the total average spent on cable as a percentage of total entertainment spending.

EIGHT. APPAREL. POTENTIAL SAVINGS: $1,117/YR (62.55%)

Source: Search based study on basic clothing combinations for men and women Methodology:  Created a set of standard baskets of apparel for a man (khakis/jeans and shirts) and a woman (skirts/jeans and tops) to establish a baseline retail cost in each of five price categories.  Conducted a series of online searches against the baseline to identify cost savings exclusive to the Internet.  Applied 62.55% savings factor to the average annual expenditure on apparel ($1,786) based on the Department of Labor annual study on consumer expenditures.
Site example: www.6pm.com

NINE. NEWSPAPERS. POTENTIAL SAVINGS: $85/YR (39.29%)

Source: Search based study reviewing major newspapers in New York, Chicago, Los Angeles, Dallas and Jacksonville

Methodology:  Calculated the standard annual rate for a daily delivery (including Sunday) subscription for three top papers in each of the above cities.  Potential savings factor based on average annual daily subscription rates vs. online subscription rates and access to the newspaper’s app (where available).

Source example: www.nytimes.com, www.chicagotribune.com, www.dallasnews.com

TEN. BILL PAY. POTENTIAL SAVINGS: $41/YR (100%)

Source: Cost analysis based on average consumer’s postage for seven bills per month.
Methodology: Created a standard multiple of monthly bills that are traditionally paid via postage (Rent/Mortgage, Gas, Electric, Water, Cable/Phornet, Mobile, Credit Card). Applied average cost per U.S. postage stamp ($ 0.49) for each monthly bill.
Site examples: www.mycheckfree.com, www.chase.com, www.bankofamerica.com

Posted by IIA on 12/14 at 04:41 PM

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