Spending Patterns and Economic Impacts of Mexican Nationals
As originally published First by Texas Border Business newsprint Edition on July 2013
According to a study conducted by Steve Nivin, Ph.D. for SABER Research Institute finds valuable information on spending patterns by Mexican nationals in a Twenty-County Region of South and Central Texas
SABÉR Institute is a research collaborative of St. Mary’s University and the San Antonio Hispanic Chamber of Commerce and Visa the credit card company supplied the data that was the basis of this analysis.
For many years, if not decades, many have observed the large influx of Mexican Nationals into the South and Central Texas areas. It has long been believed that their spending activity generates quite a bit of economic activity in the region. Some studies (discussed below) have measured this impact on the border region and in Central Texas, but as of yet, the impact in the San Antonio has mainly been measured from anecdotal evidence.
As many of the locals visit the malls during the various major holiday seasons, it is clearly evident that they are spending quite a bit of money shopping. There is also evidence that they come to the area to receive medical, purchase homes, and start businesses. But, all of this evidence for the San Antonio region to date has been anecdotal.
With data provided by Visa, this study will be able to document with data the economic impact that some of the spending by Mexican Nationals is having on the San Antonio economy. Additionally, the scope of the study expands to cover a twenty-county region into South and Central Texas. Hence, the purposes of this study are twofold: (1) provide estimates of the spending patterns by Mexican Nationals in this twenty-county region, and (2) measure the economic impact of this spending.
According to this data, Mexican nationals spent $2,377,235,906 in 2011 and $2,684,318,765 in 2012, a 12.9 percent increase, in the twenty-county region. The largest portion of this spending occurs in the border counties of Hidalgo, El Paso, and Webb counties, but Bexar, Hays, and Travis counties also see sizeable amount of spending in their local economies. The data also shows clear patterns of spending throughout the year with big increases in April, July, November, and December most likely related to the major holidays in these months.
For instance, in 2012, spending activity increases in the range of 35% to 93% during these months compared to the previous months. We have also seen increases in their spending each year from 2010 to 2012. Many factors can drive this, but it is most likely driven by improving economic conditions in both the U.S. and Mexico. All of this economic activity, supported employment of 25,456 full-time equivalent jobs earning incomes totaling $925,884,587. The spending also resulted in $114,325,004 in tax revenues, not including sales tax revenues, to the State government and various local government agencies in the region of study.
Mexican trade represents a significant share of Texas border-city retail activity, ranging from 40 to 45 percent in Laredo, 35 to 40 percent in McAllen, 30 to 35 percent in Brownsville and 10 to 15 percent in El Paso. While El Paso relies mostly on shoppers from its sister border city Ciudad Juarez, Rio Grande Valley communities draw a greater extent from interior cities such as Monterrey (Coronado and Phillips, 2012, 15).
According to the study, Mexican nationals also use other credit cards, traveler’s cheques, and cash to facilitate their economic transactions. In fact, according to Euromonitor 2012, 49% of their spending was conducted in cash, 31% using credit cards, 16% using debit cards, and 3% using traveler’s cheques. Additionally, we know that spending by Mexican nationals in the U.S. using Visa cards represents 29% of their total spending in the country. Using these numbers and assuming the same percentages would hold in the twenty counties of this study, we were able to estimate the total amount of spending by Mexican nationals in these counties. TBB
