Brett J. Creech is an economist in the Branch 

of Information and Analysis, Division of Consumer Expenditure Survey, Bureau of Labor 

Statistics.

Barry P. Steinberg is a Mathematical Statistician in the Statistical Methods Division, 

Consumer Expenditures Survey, Bureau of 

Labor Statistics.

Consumer Expenditure Survey Anthology, 2011 17

CE Source Selection for 

Publication Tables

The Consumer Expenditure 

Survey (CE) is a nationwide 

household survey conducted 

by the U.S. Bureau of Labor Statistics 

(BLS) to find out how Americans 

spend their money. The CE consists 

of two components, each with its own 

questionnaire and sample: the Interview Survey and the Diary Survey. 

The data are collected for the BLS 

by the U.S. Census Bureau. There is 

some overlap in the information collected by the two surveys, and data 

from only one of the surveys are used 

for each item in the publication tables. 

Therefore, when expenditure information is collected about a particular item 

category in both surveys, a decision 

needs to be made about which source 

of information is the more reliable for 

publication purposes. 

In the Interview Survey, consumer 

units1

 (CUs) are visited once every 3 

months over a period of 13 months. 

The survey collects expenditures on 

items that respondents can reasonably recall for a period of 3 months 

or longer, such as furniture or vehicle 

purchases, and expenses that occur on 

a regular basis, such as rent, utility payments, and insurance premiums. In the 

Diary Survey, CUs report expenditures 

in two consecutive 1-week diaries. 

Although CUs are asked to report all 

of their expenditures in the diaries, the 

focus of the diaries is on the expenditures of frequently purchased items.

Background

Prior to 1980, the CE was conducted 

at about 10-year intervals. However, 

since 1980 it has been conducted as an 

ongoing survey. From 1980 to 1983, 

CE data were published separately for 

the Diary and Interview surveys, but 

beginning in 1984, selected data were 

chosen from each survey and combined to produce publication tables. 

Such integrated data from the BLS 

Diary and Interview Surveys provide 

a complete accounting of consumer 

expenditures and income that neither survey alone is designed to do. 

For example, the Diary Survey does 

not collect data on expenditures for 

overnight travel or information on reimbursements, whereas the Interview 

Survey does. Examples of expenditures for which reimbursements are 

not collected in the Diary Survey are 

medical care; automobile repair; and 

construction, repairs, alterations, and 

maintenance of property. The Interview Survey does not collect detailed 

food expenditures, or expenditures for 

housekeeping supplies, personal care 

products, and nonprescription drugs. 

These are items collected uniquely in 

the Diary Survey.

For items that are unique to one 

survey or the other, the choice of which 

survey to use as the source of data is 

obvious. This article briefly describes 

the methods employed to select the appropriate survey source for published 

survey estimates where there is overlap 

in coverage between the surveys.

1

 A consumer unit is defined as members of a 

household related by blood, marriage, adoption, 

or other legal arrangement; a single person living alone or sharing a household with others but 

who is financially independent; or two or more 

persons living together who share responsibility 

for at least 2 out of 3 major types of expenses—

food, housing, and other expenses. The terms 

consumer unit and household are often used 

interchangeably.

BRETT J. CREECH AND

BARRY P. STEINBERG
Consumer Expenditure Survey Anthology, 2011 18

Past methods of source 

selection 

Expenditure items in the current CE are 

identified using the Universal Classification Codes (UCC) system. A UCC is 

a six-digit code that classifies reported 

expenditures at the most detailed level. 

An example of a six-digit UCC is “Tolls 

or Electronic Toll Passes,” which is 

classified as UCC 520541. Selection 

of survey source for UCCs common to 

both the Diary and Interview Surveys 

was first conducted for tabulations of 

1984–86 data through an Estimated 

Mean Square Error (MSE) method 

that used 1982–84 data. This method 

added the variance of the CE data to the 

squared difference between the mean of 

the CE data and the Personal Consumption Expenditure (PCE) produced by 

the Bureau of Economic Analysis to 

produce an estimate of the MSE for each 

CE source. The source with the smaller 

MSE was chosen. The method of source 

selection was changed in 1997 and used 

CE data from 1993–95. A Coefficient of 

Variation (CV) was computed for each 

source, and the source with the smaller 

CV was selected. 

CE data are used extensively by the 

Consumer Price Index (CPI). In 2001, 

meetings were conducted at the request 

of the CPI group to look at differences 

in source selection between the CE 

and the CPI using 1999 data. At that 

time fewer than 15 UCCs had different 

sources between the two programs. It 

was recommended that the CPI adopt 

the CE source decision in all cases with 

greater than 50 reports of expenditures 

at the UCC level. Subsequently when 

new expenditure items and UCCs were 

introduced in 2005, source selection 

was coordinated so that the CE and the 

CPI were in agreement on the newly 

introduced UCCs.

In 2007, a team was formed with the 

task of reviewing the previous methods 

of source selection and developing 

a new quantitative methodology for 

selecting expenditure data from the 

two surveys.

CE coverage versus CPI 

coverage

The CPI is a measure of the average 

change over time in the prices paid by 

urban consumers for a market basket 

of consumer goods and services. The 

CE provides BLS with expenditure 

data that are used to calculate the relative importance of items in the market 

basket. One reason the CE and CPI 

used different sources in the past is 

that the population coverage of the CE 

differs from that of the CPI. The CPI is 

calculated for urban CUs, whereas the 

CE uses all CUs (urban and rural) in 

their calculations. Definitions of components also differ between the CE and 

the CPI. For example, homeownership 

is treated differently in the two surveys: 

actual expenditures of homeownership 

are reported in the CE, whereas the CPI 

uses a rental-equivalence approach 

that estimates the change in the cost 

of obtaining, in the rental marketplace, 

services equivalent to those provided 

by owner-occupied homes.

The CE publishes expenditures 

for items such as medical care and 

auto repair net of reimbursements by 

health insurance and vehicle insurance, respectively. Reimbursements for 

these expenditures are captured in the 

Interview Survey and are used in calculating out-of-pocket expenditures. 

The Diary Survey does not collect 

reimbursement data so expenditures 

for these items are necessarily taken 

from the Interview Survey. There are 

also transportation UCCs that are 

derived from information exclusively 

in the Interview Survey. For example, 

for a new car purchase, the value of 

any trade-in vehicles is deducted from 

the purchase price to calculate the net 

out-of-pocket expense for the new car. 

Other issues affecting source 

selection

A small number of UCCs are excluded 

from the source selection process. 

In some cases, the number of Diary 

Survey observations reported directly 

by respondents was so small that it disqualified the Diary Survey as a source. 

While the source selection methodology generally evaluates sources based 

on the number of expenditure reports 

over a given year, there are some items 

included in the chained C-CPI-U price 

index for which a sufficient number 

of monthly expenditure reports are 

required. In order to compare the 

monthly expenditure counts from both 

surveys, the Diary Survey’s monthly 

counts have to be adjusted upward 

to account for the Interview Survey’s 

longer recall period and larger sample 

size. During the 2007 source selection 

process, the source for four UCCs 

was based on a monthly comparison 

of adjusted Diary Survey counts to 

Interview Survey counts.

Source selection methodology

Implementing the source selection 

methodology involves a number of 

steps. Counts, sample means, and 

sample variances are calculated for 

each UCC. Before calculating means 

and variances, expenditure data are top 

coded and bottom coded to minimize 

the impact of outliers. Bottom coding 

is a form of censoring the data and is 

performed by applying the value of the 

1st percentile to replace all smaller values. Conversely, top coding applies the 

value at the 99th percentile to replace 

all larger values for each UCC. 

Next, the counts (each represents a 

reported expenditure for that UCC) and 

Z-Scores (defined below) are weighted 

for the three most recent collection 

years using the following scheme, 

which places greater emphasis on the 

more recent collection years:

• 1st collection year (oldest) by 1/6. 

(For 2007, 2004 data are used.)

• 2nd collection year (middle) by 

2/6. (For 2007, 2005 data are 

used.)

• 3rd collection year (most recent) by 3/6. (For 2007, 2006 

data are used.)

If a new UCC was created within 

the most recent 2 years or if there was 

a change in the collection instrument 

that caused a significant difference 

between the means in the years before 

and after the instrument change, then 

the 2 most recent years of data are 

analyzed. Counts and Z-Scores are 
Consumer Expenditure Survey Anthology, 2011 19

weighted with more emphasis given to 

the most recent collection year:

• 1st collection year (oldest) by 

2/5. (For 2007, 2005 data are 

used.)

• 2nd collection year (most recent) 

by 3/5. (For 2007, 2006 data are 

used.)

Source selection decision 

criteria

Definitions of the statistical terms used 

in the analysis are as follows:

1) UCC Mean—the weighted annual 

average expenditure for the CPI-U 

population using the adjusted full 

sample weight.

2) UCC Z-Score = 

XI = Annual UCC mean2 from the 

Interview Survey

X D = Annual UCC mean from the 

Diary Survey

I = Annual UCC population mean 

from the Interview Survey

D = Annual UCC population mean 

from the Diary Survey

2

XI

σ = Annual UCC variance from the 

Interview Survey

2

X D

σ = Annual UCC variance from the 

Diary Survey

With the null hypothesis that 

the team tested, Ho: = ∝∝ DI or

μμ DI =− 0 , the Z-Score represents the test of equality between 

the two weighted source means. The 

numerator is the difference between 

the sample means −− .0)( XX DI

The denominator is the standard deviation of that difference; it is assumed 

that the two surveys are statistically 

independent of each other. Variances 

are estimated using the method of Balanced Repeated Replications (BRR)3 

with 44 replicates. 

In order to determine which source 

to select for each UCC, the following 

decision criteria are used: 

Criterion 1: Counts Sufficiency. 

For each UCC and each survey, the 

number of CUs with at least one expenditure is counted for each of the 

3 most recent data collection years. 

This yields six counts for each UCC: 

three yearly counts for the Interview 

Survey and three yearly counts for 

the Diary Survey. These counts 

are used to ensure that a sufficient 

amount of data is available to make 

source selection decisions. A sufficient amount of data exists when 

the count for each of the 3 years is 

greater than or equal to 60.4

• If both surveys have sufficient 

data, then proceed to Criterion 2.

• If both surveys lack sufficient 

data, then keep the original 

source.

• If one survey has sufficient data, 

but the other has insufficient 

data, then a weighted average of 

the three yearly counts for the 

survey having an insufficient 

amount of data is computed: n* 

= (3/6)nt-1 + (2/6)nt-2 + (1/6)nt-3.

5 

• If the weighted average n* from 

the insufficient survey is greater 

than or equal to 60, then proceed to Criterion 2.

• If the weighted average n* from 

the insufficient survey is still 

less than 60, then use the survey with sufficient data as the 

source. 

Criterion 2: Statistical Significance. 

a) If the absolute value of the weighted 

Z-Score, z* = (3/6)zt-1 + (2/6)zt-2 + 

(1/6)zt-3, is greater than or equal to 

1.645 then select the source based 

on the following6:

• If the weighted Z-Score is 

greater than or equal to 1.645, 

then the Interview Survey is selected as the source.

• If the weighted Z-Score is less 

than or equal to –1.645, then the 

Diary Survey is selected as the 

source.

b) If the weighted Z-Score is between 

–1.000 and 1.000, then the current 

source will continue to be used.

c) If the weighted Z-Score is greater 

than 1.000 and less than 1.645 or 

less than –1.000 and greater than 

22

)()(

I XX D

XX DI DI

σσ

μμ

+

−−−

2

XI and X D represent the weighted 

means of collected data from the Interview and 

Diary Surveys, respectively. I and D

represent the population means for the Interview and Diary surveys, respectively, which are 

unknown. For the Z-score calculation, the null 

hypothesis tests that the difference between I

and D is zero.

3

 Balanced Repeated Replication (BRR) is a 

method of variance estimation used for sample 

survey statistics when the complexity of a survey’s sample design prevents standard classical 

variance estimation techniques from being used. 

BRR belongs to a class of variance estimation 

techniques that use replications. The basic idea 

behind replication is to select subsamples of the 

collected data repeatedly from the full sample, 

and then calculate the statistic of interest from 

both the full sample and from each sub-sample. 

These sub-samples are called replicates. The 

difference between the replicate estimates and 

the full sample estimate are then used to estimate 

the variance of the full sample statistic. 4

 The number 60 represents an average of 

five expenditures per month, which was found to 

be the minimum number of expenditures needed 

to produce stable results.

5

 For the equation n* = (3/6)nt–1 + (2/6)nt–2

+ (1/6)nt–3, t represents the evaluation year with 

the collection years being t–1, t–2, and t–3. 

For example, a 2007 evaluation will have t–1 

representing collection year 2006, t–2 representing collection year 2005, and t–3 representing 

collection year 2004. The same concept applies 

to z* = (3/6)zt–1 + (2/6)zt–2 + (1/6)zt–3 that will be 

mentioned later in the article. 6

 The value of 1.645 represents the 95th 

percentile of the standard normal distribution. 

It is often used in research as the critical value 

in determining statistical significance. On the 

left side of the standard normal distribution, the 

value of –1.645 represents the 5th percentile and 

is used in a similar manner. 
Consumer Expenditure Survey Anthology, 2011 20

–1.645, the following method is 

used to select the source:

• If all three Z-Scores are greater 

than 1.000, then the Interview 

Survey is selected as the source.

• If all three Z-Scores are less 

than –1.000, then the Diary Survey is selected as the source.

• In all other scenarios, the source 

remains the same.

2007 data results from the 

source selection process 

Table 1 lists the number of overlapping UCCs researched for source 

selection and the number of UCCs 

that changed sources. Out of approximately 900 UCCs, there were 222 

overlap UCCs that were researched, 

resulting in 22 changing sources. 

Eighteen changed because they had 

high Z-Scores (absolute values) and 

4 changed due to the Diary Survey 

failing the counts criterion, thereby 

switching to the Interview Survey. 

There were a total of 9 UCCs that had 

fewer than 60 observations in both 

surveys; therefore the source stayed 

the same. A total of 75 UCCs had 

observations in the Diary Survey that 

failed the counts criterion, thereby using the Interview Survey as the source. 

Only one UCC had an observation in 

the Interview Survey that failed the 

counts criterion. There were a total of 

94 UCCs that had high Z-Scores (their 

absolute values were greater than or 

equal to 1.645), 27 UCCs with low 

Z-Scores (their absolute values were 

less than 1.000) and 16 UCCs with 

Z-Scores between 1.000 and 1.645 or 

between -1.000 and –1.645. 

2009 results 

The source selection process implemented in 2007 was used to evaluate 

2006–08 data for the development of 

2009 estimates. Upon receiving a list 

of new UCCs, the source selection 

program was run on all UCCs having 

data in both the Interview and Diary surveys. The 3-year period from 

2006–08 was used for most UCCs, and 

2007–08 data for the newer UCCs. After calculating the expenditure counts 

and Z-Scores, the procedures identified 

six UCCs for which the applicable 

source selection criterion had changed. 

After further evaluation the source was 

changed for only two of them.

The source for two of these six 

UCCs had been changed in 2007 and 

it was decided not to change again in 

2009, to avoid an undue switching 

between sources every 2 years. Of the 

remaining four UCCs, it was decided to 

keep the Interview Survey as the source 

for two UCCs because of concerns 

about the consistency of the Diary 

Survey estimates. When the analysis 

was completed, two UCCs changed 

sources from the Diary Survey to the 

Interview Survey.

Summary 

Source selection is the process of 

choosing the better survey to use in 

CE’s official published expenditure 

estimates. It is a multistep process 

performed every 2 years for every 

overlapping UCC by comparing expenditure data from both the Interview 

and Diary Surveys using a counts criterion and weighted Z-Score approach 

to determine the better source for use 

in CE production. The method uses 

the previous 3 years of data when 

available, giving more weight to the 

most recent years. For new UCCs 

only 2 years of data are used. The 

data are adjusted for outliers in both 

the Interview and Diary Surveys. A 

number of criteria are then tested to 

determine which source to select. The 

first criterion assesses the number of 

unweighted consumer units making 

an expenditure for each UCC in each 

survey and may eliminate a source 

where an insufficient number of CUs 

report. The next criterion chooses the 

source that provides the larger overall 

expenditure per UCC. The means of 

reported expenditures, weighted by 

year, are compared from each survey using a standard Z-test, and in 

essence, the statistically significant 

larger mean is chosen.

The source selection process will 

continue to be run every 2 years. 

In addition to running the process, 

the CE will be looking for ways to 

accelerate the process by methods 

such as automation. Future research 

will also be performed to adapt the 

process for changes in survey instruments, collection methodology, and 

data processing.

Table 1. Number of overlap Universal Classification Codes (UCC)

 researched for source selection

UCCs

researched

UCCs changing

source

Total 222 22

UCCs for any year with observations less than 60 in both surveys 9 0

UCCs in which the observations in the Diary survey fail the counts criterion 75 4

UCCs in which the observations in the Interview survey fail the counts criterion 1 0

UCCs with Z-scores between –1.00 and 1.00 27 0

UCCs with Z- scores of +–1.00 and +–1.645 16 0

UCCs with Z- scores of –1.645 or less 68 17

UCCs with Z- scores of 1.645 or greater 26 1