Academic journal article Monthly Labor Review

The Consumer Expenditure Survey Redesign Initiative

Academic journal article Monthly Labor Review

The Consumer Expenditure Survey Redesign Initiative

Article excerpt

The BLS mission statement states that BLS executes its mission by "... providing products and services that are accurate, objective, relevant, timely, and accessible." The Consumer Expenditure Survey (CE) program supports this mission in its research and development projects. In particular, the CE program maintains the relevance of the surveys through research projects and regular biennial updates to the Consumer Expenditure Quarterly Interview (CEQ) questionnaire and improves data quality through methodological and data collection revisions. A team of economists, survey methodologists, and statisticians work together to identify and propose solutions for measurement error problems, develop new approaches to maintaining response rates and other data collection issues, streamline data processing procedures, and investigate and implement estimation methods that are more efficient.

The CE measures spending by consumers for the total U.S. noninstitutional population. The principal purpose of the survey is to provide the Consumer Price Index (CPI) program with the expenditure weights that the CPI program uses to generate an all-items index. The CPI is the primary measure of household inflation and is one of the most important economic measures of the U.S. economy. Accurate information on consumer spending habits--used to determine expenditure weights --is vital to the CPI. An expenditure weight is an estimate of consumer expenditure needed to weight the market basket of goods. In addition to collecting expenditure data, the CE collects information on family income, assets, liabilities, housing characteristics, and detailed demographic information, making the survey a unique data source for policy analysis and research.

The article comprises (1) an introduction to the CE program, (2) a history of the CE's methodological improvements, (3) an overview of the Gemini Project, and (4) highlights of recent research conducted in support of the redesign. The article concludes with a discussion of next steps for the CE as the Gemini Project transitions from development to implementation.

CE background

The CE program currently consists of two independent surveys, the Consumer Expenditure Quarterly Interview (CEQ) and the Consumer Expenditure Diary (CED). The geographic samples for the surveys are updated every 10 years using the decennial census to create the sampling frame, and new addresses are selected each year from a master address file that is updated with new addresses from a Postal Service file. The unit of measure is a consumer unit (CU), which consists of all members of a household who are related or who share expenditure decisions. The CE data are collected by the U.S. Census Bureau.

In the CED, respondents complete two 1-week expenditure diaries that capture all expenditures for everyone in the CU. The diaries span 2 consecutive weeks. The CED is designed primarily to collect expenditure data on small or frequently purchased items such as food, meals away from home, apparel, and personal care items. Interviewers visit the selected sample units to collect demographic and income information, leave the diaries, and ask the diary keeper to record expenditures daily. About 7,000 CUs participate in the CED per year and complete about 14,000 diaries.

The purpose of the CEQ is to capture expenditures for larger and less frequently purchased items and for items, such as rent or utilities, for which payments are made on a regular basis, such as monthly. The CEQ is a quarterly survey with a rotating panel design. Each CU is interviewed four times over the course of 10 months (although respondents are only in the sample for 10 months, the survey's recall period still covers a 12-month period). In the first interview, the interviewer collects demographic data for all CU members and establishes an inventory of items such as properties, vehicles, and insurance policies, which are updated in subsequent interviews. …

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