(NEW YORK) — Many segments of the U.S. economy continue to struggle in the wake of the recent recession, but the prom industry is booming, according to a new national survey by Visa Inc.
The survey finds American families with teenagers will spend an average of $1,078 each on a prom in 2012, a 33.6-percent increase over the $807 spent last year.
Families in the Northeast will spend twice as much on a prom as every other region of the country.
Jason Alderman, senior director of Global Financial Education, Visa Inc., says, “Prom season spending is spiraling out of control as teens continuously try to one-up each other.”
Alderman adds, “It’s important to remember that the prom is a high school dance, not a wedding, and parents need to set limits in order to demonstrate financial responsibility.”
The survey also reveals that parents are planning to cover 61 percent of prom costs while their teens are only covering the remaining 39 percent.
“One of the reasons that prom spending may be running amok is that parents are paying the vast majority of costs, giving teens little incentive to economize,” says Alderman.
Other notable survey results:
Prom spending broken down by family income:
The Visa Inc. survey is based on 1,000 telephone interviews.
Copyright 2012 ABC News Radio
Kathryn Vasel, CNN
Alanna Petroff, CNN
Tara Bench, KSL.com