Are Prospective Retailers Getting an Accurate Picture of Groton? A look into how military personnel are reported in U.S. Census data

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Communities with large military installations face a unique challenge: the significant presence of active duty military personnel affects demographic data, such as population, household income, consumer spending, and other indicators that retailers and other consumer-oriented businesses use to make location decisions. This is the case in  Groton, CT where Naval Submarine Base New London is located. A question that the Town is often asked by potential developers and retailers is “what impact does the military base population have on Groton’s income levels?” We explored this question and found that the difference between military income and civilian income levels in Groton is marginal.

There are four main income indicators:

  • Median Household Income – The value that divides the income distribution in two, with half the households earning above the value and the other half earning below the value.
  • Aggregate Household Income – The total of all household incomes in an economy.
  • Average Household Income – The aggregate household income divided evenly among the number of households in a region.
  • Per Capita Income – The total income in a region divided by the region’s total population, including non-earners.

As of 2016, the average household income of the Town of Groton was $83,724. The Town of Groton falls below New London County and Connecticut in most income metrics. Additionally, the Town of Groton’s income metrics are projected to grow at a slower rate compared to the county and state. Many many have wondered if the presence of the Naval Submarine Base New London is a factor and if, in fact, the income data presented by the Census might be understated – giving potential retailers an inaccurate picture of Groton’s consumer market. 

It’s a reasonable question.

The military population, including dependents, comprise approximately 27% of the town’s population, with civilians making up the remaining 73%. Military households are an important consumer market segment in Groton and, therefore, it is important to understand how the income in households with military personnel is represented in key data metrics.

With respect to the data, military personnel fall into two categories: Personnel living on-base in barracks and personnel living off-base in town. Household income figures provided by the U.S. Census exclude military personnel living in barracks because they are considered occupants of group housing, not households. Military personnel living in barracks are primarily 18 to 25-year-olds just out of basic training. They do not receive basic allowance for housing and therefore have significantly lower earnings compared to their off-base counterparts.[1]

There is not publicly available data on household income for military households in Groton, so we asked our economic development consultants to help shed some light on the impact of the presence of Naval Submarine Base New London on the Town’s demographic and socioeconomic profile. The detailed memo explaining the methodology can be found on the Town’s website here, but the bottom line is there is only a marginal difference between military and civilian household income. Conservative estimates put the average military household income at $77,025 and average civilian household income at $85,158. Due to data limitations, this difference is likely overstated because the estimation of military household income excludes any income earned from non-military sources, such as income earned by a civilian spouse.

So, it’s safe to say that retailers relying on income data from the Census are getting an accurate picture of the Town’s income levels and can confidently use this data to determine if the area aligns with their targeted demographic.

 


[1] Basic Allowance for Housing (BAH) provides uniformed Service members equitable housing compensation based on housing costs in local civilian housing markets within the United States when government quarters are not provided. Source: Defense Travel Management Office: http://www.defensetravel.dod.mil/site/bah.cfm.

[2] https://www.wholefoodsmarket.com/company-info/real-estate

 

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