Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

MEASURING WHAT WE SPEND

Toward a New Consumer Expenditure Survey

Panel on Redesigning the BLS Consumer Expenditure Surveys

Don A. Dillman and Carol C. House, Editors

Committee on National Statistics

Division of Behavioral and Social Sciences and Education
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

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Suggested citation: National Research Council. (2013). Measuring What We Spend: 

Toward a New Consumer Expenditure Survey. Panel on Redesigning the BLS Consumer Expenditure Surveys, Don A. Dillman and Carol C. House, Editors. Committee on National Statistics, Division of Behavioral and Social Sciences and Education. 

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Measuring What We Spend: Toward a New Consumer Expenditure Survey

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Measuring What We Spend: Toward a New Consumer Expenditure Survey
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

v

PANEL ON REDESIGNING THE BLS 

CONSUMER EXPENDITURE SURVEYS

DON A. DILLMAN (Chair), Department of Sociology and Social and 

Economic Sciences Research Center, Washington State University

DAVID M. BETSON, College of Arts and Letters, University of Notre 

Dame

MICK P. COUPER, Institute for Social Research, University of Michigan

ROBERT F. GILLINGHAM, Independent Consultant, Potomac Falls, VA

MICHAEL W. LINK, The Nielsen Company

BRUCE D. MEYER, Harris School of Public Policy Studies, University of 

Chicago

SARAH M. NUSSER, Department of Statistics, Iowa State University

ANDY PEYTCHEV, RTI International

MARK M. PIERZCHALA, Independent Consultant, Rockville, MD

ROBERT SANTOS, The Urban Institute

MICHAEL F. SCHOBER, New School for Social Research

MELVIN STEPHENS, JR., Department of Economics, University of 

Michigan

CLYDE TUCKER, Independent Consultant, Vienna, VA

CAROL C. HOUSE, Study Director

ALICIA JARAMILLO-UNDERWOOD, Program Associate

ANTHONY MANN, Program Associate

LINDA DePUGH, Program Associate

AGNES GASKIN, Administrative Assistant
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

vi

COMMITTEE ON NATIONAL STATISTICS 

2011–2012

LAWRENCE D. BROWN (Chair), Department of Statistics, The 

Wharton School, University of Pennsylvania

JOHN M. ABOWD, School of Industrial and Labor Relations, Cornell 

University

ALICIA CARRIQUIRY, Department of Statistics, Iowa State University

WILLIAM DuMOUCHEL, Oracle Health Sciences, Waltham, 

Massachusetts

V. JOSEPH HOTZ, Department of Economics, Duke University

MICHAEL HOUT, Survey Research Center, University of California, 

Berkeley

KAREN KAFADAR, Department of Statistics, Indiana University

SALLIE KELLER, Provost, University of Waterloo, Ontario, Canada

LISA LYNCH, Heller School for Social Policy and Management, Brandeis 

University

SALLY C. MORTON, Department of Biostatistics, University of 

Pittsburgh

JOSEPH NEWHOUSE, Division of Health Policy Research and 

Education, Harvard University

RUTH D. PETERSON, Department of Sociology (emeritus) and Criminal 

Justice Research Center, The Ohio State University

HAL S. STERN, Donald Bren School of Computer and Information 

Sciences, University of California, Irvine

JOHN H. THOMPSON, National Opinion Research Center at the 

University of Chicago

ROGER TOURANGEAU, Westat, Rockville, MD

ALAN ZASLAVSKY, Department of Health Care Policy, Harvard 

University Medical School

CONSTANCE F. CITRO, Director
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

vii

Acknowledgments

The Panel on Redesigning the BLS Consumer Expenditure Surveys 

(CE) wishes to acknowledge the support, effort, and expertise of 

many individuals who contributed to this report and the deliberations behind it. As chair of the panel, I want to begin by thanking my fellow 

panel members for extraordinary efforts they have made over the past 18 

months, and the commitment each gave to this team. The panel members 

brought a wide range of needed expertise to the table along with a dedication to good science and improving the CE. They consistently provided 

constructive ideas and assessments under tight timelines. They worked hard 

together to articulate a balanced framework of conclusions and recommendations that we believe will be helpful to the Bureau of Labor Statistics 

(BLS). It was a true pleasure working with this group of individuals.

The panel wishes to commend BLS for its commitment to a thoughtful, 

systematic, and comprehensive multiyear process to redesign the CE. The 

Gemini Project was initiated by BLS in 2009 and has overseen a wealth 

of research and information-gathering workshops that formed a base 

from which the panel launched its own activities. BLS has created a wellorganized website that provides easy access to this research and information. Michael Horrigan, associate commissioner, Office of Prices and Living 

Conditions, is a driving force behind the redesign efforts. He provided the 

panel with his insight and expectations as well as management support. 

Working with Michael to steer the Gemini Project and support the panel’s 

activities were Jay Ryan, Consumer Expenditure Division Chief, and Adam 

Safir, Branch Chief of Research and Program Development Branch. Both 

Jay and Adam were very helpful throughout the entire process—answering 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

viii ACKNOWLEDGMENTS

questions, making staff available for assistance, providing suggestions for 

workshop speakers and participants, and setting a tone of cooperation with 

the panel. We want to thank Kathy Downey, who is leader of the Gemini 

Project. Kathy was the main BLS contact with the panel, so our questions 

and requests flowed through Kathy. She was well organized and worked 

hard to assist the panel in its requests. Thanks to Jeanette Davis, who managed the contract. Many other BLS staff stepped forward in many ways to 

assist the panel by answering questions, participating at panel-sponsored 

meetings or workshops, and carrying out research that proved very useful to the panel’s work. These staff include Rob Cage, Bill Casey, Jennifer 

Edgar, John Eltinge, Thesia Garner, Steve Henderson, Bill Mockovak, Bill 

Passero, Dave Swanson, and many others.

The panel held four meetings and two workshops in the process of 

preparing this report. We would like to thank all participants in these meetings and workshops, and particularly the presenters. The Household Survey 

Producers Workshop was held in June 2011. At that workshop, overviews 

of the measurement of consumer expenditures in other countries were presented by Guylaine Dubreuil (Statistics Canada), Giles Horsfield (Office of 

National Statistics, UK), and Peter Paul Borg (European Union). Presentations describing survey designs that add flexibility in data collection mode 

were given by Richard Hough (U.S. Census Bureau), Jolene Smyth (University of Nebraska), and Jennifer Wine (RTI International). That session was 

followed by presenters who discussed survey designs that effectively mix 

data from multiple surveys and/or external/administrative data to produce 

estimates—Steve Machlin (Agency for Healthcare Research and Quality), 

Eileen O’Brien (Energy Information Agency), and Van Parson (National 

Center for Health Statistics). The fourth session in the workshop presented 

work by Dave Aune (National Agricultural Statistics Service), Jason Fields 

(U.S. Census Bureau), and Jane Gentleman (National Center for Health 

Statistics) on the topic of designs that effectively mix global and detail information to reduce burden and measurement error. Jason Fields (U.S. Census 

Bureau) and Frank Stafford (University of Michigan) discussed designs that 

use “event history” methodology. In the final session of the workshop the 

following presenters provided examples of Diary surveys that effectively 

utilize technology to facilitate recordkeeping or recall— Justin Bailey (The 

Nielsen Company), Nancy Cole (Mathematica Policy Research), and Paul 

Kizakevich (RTI International). Our thanks go to all.

The panel, through the National Academies, competitively selected 

and commissioned two groups to produce research reports laying out a 

redesign of the CE. We thank Jennifer Edgar (BLS) for her work with the 

panel’s study director to develop a “statement of work” for this competition. Two contracts were awarded—Westat, and a consortium from the 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

ACKNOWLEDGMENTS ix

University of Wisconsin–Milwaukee, the University of Nebraska–Lincoln, 

and Abt-SRBI. The ideas presented in these reports were important as 

the panel considered its own recommendations. Both reports presented 

designs that were innovative and well researched. The time frame given 

the groups was very short, and both groups met the challenge. The panel 

used their research and ideas extensively. We would like to give special 

thanks to both teams: The Westat team—David Cantor (team leader), Brad 

Edwards, Bob Fay, Abie Reifer, and Sid Schneider; and the consortium 

team—Courtney Kennedy (Abt-SRBI), Nancy Mathiowetz (team leader, 

University of Wisconsin–Milwaukee), and Kristen Olson (University of 

Nebraska–Lincoln). These authors presented their reports at the October 

2011 Redesign Options Workshop. The panel was fortunate to also have 

a number of excellent formal discussants at this workshop. Richard Kulka 

(independent consultant) discussed the two reports from the view of cognitive and methodological issues, while Chet Bowie (NORC) talked about 

the issues of implementing change in a large ongoing survey. We were also 

fortunate to have Mark Lino (Center for Nutrition Policy and Promotion, USDA), Clinton McCully (Bureau of Economic Analysis), and Melvin 

Stephens (University of Michigan and a panel member) discuss both designs 

from the perspective of data users. The panel thanks all of these discussants 

for their insightful comments.

The panel reached out to many users of the CE data. First we wish to 

extend our thanks to staff at several federal agencies who spoke with panel 

members about how the CE data are used to help administer programs 

within their agencies. Thanks to Mary Kate Catlin, Centers for Medicare 

& Medicaid Services; Cathy Cowan, National Health Statistics Group; 

Kenneth Hanson, Economic Research Service, USDA; Arnold Katz and 

Marshall Reinsdorf, Bureau of Economic Analysis; and Geng Li, Federal 

Reserve Board. The panel held a session at the 2011 CE Data Users Conference, and we would like to thank the analysts who attended this session 

and passed along their comments on the CE. We would especially like to 

extend our appreciation to Christopher Carroll (Johns Hopkins University) 

who attended each of the panel’s public meetings and workshops, listening 

intently and providing insightful comments and suggestions at each venue.

This report was reviewed in draft form by seven individuals chosen 

for their diverse perspectives and technical expertise, in accordance with 

procedures approved by the Report Review Committee of the National 

Research Council (NRC). The independent reviewers provided candid and 

critical comments that assisted the panel in making its report as sound as 

possible and ensuring that the report meets the NAS standards for objectivity, evidence, and responsiveness to the study charge. We wish to thank the 

following individuals for their review of this report: F. Jay Breidt, Depart-
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

x ACKNOWLEDGMENTS

ment of Statistics, Colorado State University; Stephen Cohen, National 

Center for Science and Engineering Statistics, National Science Foundation; 

Erik Hurst, The University of Chicago Booth School of Business; Timothy 

P. Johnson, Survey Research Laboratory, University of Illinois, Chicago; 

Jean Opsomer, Department of Statistics, Colorado State University; Frank 

Stafford, Department of Economics, University of Michigan; and Alan R. 

Tupek, Arbitron, Inc. Their comments were extremely helpful, and the 

report is much improved because of their efforts. Although the reviewers 

listed above have provided many constructive comments and suggestions, 

they were not asked to endorse the conclusions or recommendations nor 

did they see the final draft of the report before its release. The review of 

this report was overseen by Robert Bell (AT&T Labs) and Stephen Fienberg 

(Carnegie Mellon), who served as Review Coordinator and Review Monitor, respectively. They were responsible for making certain that an independent scientific review of this report was carried out in accordance with 

institutional procedures and that all review comments were carefully considered. The panel was privileged to have these two individuals working on 

the report, and we thank them for their efforts and insight. The panel also 

wants to acknowledge the efforts of our editor, Paula Whitacre, who did a 

great job in making the entire report read smoothly.

The panel would like to show appreciation to the many individuals within the National Academies who provided support and assistance 

throughout this process. First, we thank Connie Citro, director of the 

Committee on National Statistics. Connie provided support to the panel 

throughout the entire process, attending panel members and workshops. 

She also provided her own insights and recommendations when requested 

by the panel. Her comments were very helpful.

We also want to express our profound gratitude to the panel’s study 

director, Carol House. Her contribution to the panel’s work was enormous, 

from obtaining needed background information and research for the panel 

deliberations to drafting the text of final report. The latter was particularly 

challenging because of the need to bring together diverse input from multiple scientific disciplines and meet the prescribed deadlines. The panel also 

wants to thank the four program assistants who worked with the panel 

over its lifespan in setting up meetings and workshops, processing financial paperwork, interacting with workshop participants, preparing agenda

books, carrying out web searches, and generally making sure that the entire 

process proceeded smoothly. So our thanks go to Linda DePugh, Agnes 

Gaskin, Alicia Jaramillo-Underwood, and Anthony Mann. In addition we 

thank Kirsten Sampson-Snyder and Eugenia Grohman for their many efforts

in assisting the report through the steps required for final publication.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

ACKNOWLEDGMENTS xi

Finally, we recognize the many federal agencies that support the Committee on National Statistics directly and through a grant from the National 

Science Foundation. Without their support and commitment to improving 

the national statistical system, the committee work that is the basis of this 

report would not have been possible.

Don A. Dillman, Chair

Panel on Redesigning the BLS Consumer Expenditure Surveys
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

xiii

Contents

SUMMARY 1

1 INTRODUCTION AND OVERVIEW 15

Background of the Consumer Expenditure Surveys, 15

Context for This Study, 17

Overview of This Report, 19

2 THE MANY USES OF THE CONSUMER

EXPENDITURE SURVEYS 21

CE Data Provide Critical Input for Calculating the Consumer

 Price Index, 21

The CE Provides Data Critical in Administering Government

 Programs, 25

CE Data: A Cornerstone for Policy Analysis and Economic

 Research, 27

Summary, 36

3 THE CURRENT CONSUMER EXPENDITURE SURVEYS 37

Design and Implementation, 37

Cost of the Consumer Expenditure Surveys, 45

4 THE PANEL’S INVESTIGATION INTO THE ISSUES

WITH THE CE 47

Feedback from Data Users, 48

Panelists’ Insight as Survey Respondents, 50
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

xiv CONTENTS

Household Survey Producers Workshop: Description and 

 Insights, 51

Redesign Options Workshop: Description and Insights, 59

5 WHY REDESIGN THE CE? 68

Evidence of Underreporting in the CE, 69

Measurement Differences Between the Interview and Diary, 77

Sources of Response Error in the Interview Survey, 82

Sources of Response Error in the Diary Survey, 92

Nonresponse, 101

Issues Regarding Nonexpenditure Data, 106

Summary of Reasons to Redesign the CE, 107

6 PATHWAY TO AN IMPROVED SURVEY 109

Overview, 109

Panel’s Approach to Design and the Commonalities 

 That Emerged, 113

Redesign Prototypes, 118

Roadmap to Get There, 163

Summary, 186

REFERENCES AND BIBLIOGRAPHY 188

APPENDIXES

A Dissent and Panel Response 201

B BLS Communication of Issues 208

C Uses of the CE in Administering Federal Programs: Debriefing

of Program Staff 215

D Statement of Work for CNSTAT Competitive Solicitation of

Design Ideas 223

E Household Survey Producers Workshop Agenda 229

F Redesign Options Workshop Agenda 233

G Biographical Sketches of Panel Members and Staff 235
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

Summary

The Consumer Expenditure Surveys (CE) are the only source of information on the complete range of consumers’ expenditures and incomes in the United States, as well as the characteristics of those 

consumers. The CE consists of two separate surveys—a national sample of 

households interviewed five times, at three-month intervals; and a separate 

national sample of households that complete two consecutive one-week 

expenditure diaries. For more than 40 years, these surveys, the responsibility of the Bureau of Labor Statistics (BLS), have been the principal source 

of knowledge about changing patterns of consumer spending in the U.S. 

population.

In February 2009, BLS initiated the Gemini Project, the aim of which 

is to redesign the CE surveys to improve data quality through a verifiable 

reduction in measurement error with a particular focus on underreporting. 

The Gemini Project initiated a series of information-gathering meetings, 

conference sessions, forums, and workshops to identify appropriate strategies for improving CE data quality. As part of this effort, BLS requested 

the National Academies’ Committee on National Statistics (CNSTAT) to 

convene an expert panel to build upon the Gemini Project by conducting 

further investigations and proposing redesign options for the CE surveys.

The charge to the Panel on Redesigning the BLS Consumer Expenditure Surveys includes reviewing the output of a Gemini-convened Data 

User Needs Forum and Survey Methods Workshop and convening its own 

Household Survey Producers Workshop to obtain further input. In addition, the panel was requested to commission options from contractors for 

consideration in recommending possible redesigns. The panel was further 

1
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

2 MEASURING WHAT WE SPEND

asked by BLS to create potential redesigns that would put a greater emphasis on proactive data collection to improve measurement of consumer 

expenditures. This report summarizes the deliberations and activities of 

the panel. As summarized below and described more fully in its report, the 

panel drew four conclusions about the uses of the CE and 16 conclusions 

about why a redesign is needed. The panel also made 12 recommendations 

about future directions.

PURPOSES OF THE CE SURVEYS

The CE serves several important purposes. The most visible is for 

calculating the Consumer Price Index (CPI), one of the most widely used 

statistics in the United States. Calculating the CPI involves multiple data 

sources. The CE data provide budget shares (weights) for detailed expenditure categories. Much of this detail is not available elsewhere.

Another important use is to provide data critical for administering 

certain federal and state government programs. For the continuing administration of many of these programs, the CE is the only continuing source 

of data with sufficient information on households’ demographic characteristics, spending, and income.

In addition, the completeness of the CE in measuring household demographics and consumer expenditures, in combination with repeated 

measurement over a year for the same households, makes it a cornerstone 

for policy analysis and economic research. Understanding the differential 

effects of policies and events on consumer expenditures of all types, and 

the consequences for people of different ages, races, and ethnicities, sizes 

of households, and regions, relies upon the CE.

WHY THE CE INCLUDES TWO SURVEYS

The modern version of the CE, with its two independent surveys, was 

first fielded in 1972–1973. It has been conducted annually since 1980 with 

the same underlying design concept—different methods of data collection 

to collect different kinds of data.

The Interview survey was designed to collect expenditures that could 

be recalled for over three months. The focus was on large expenditures, 

such as property, automobiles, and major appliances, as well as regular 

expenditures, such as rent, utility bills, and insurance premiums. The Diary 

survey, on the other hand, was designed to obtain expenditures for smaller, 

frequently purchased items.

Over time, however, the Interview survey began to collect information 

on small, frequently purchased items, while the Diary now collects information on many larger items. Thus, the Interview and Diary now collect 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

SUMMARY 3

information that allows estimates for certain expenditures to be made from 

either source, using different question wordings and time periods. BLS 

uses only data from a single source in its published estimates, selecting the 

“best” source for each item.

Approximately 7,100 interviews, each of which averages about 60 

minutes, are conducted each quarter in the Interview survey, with five 

interviews for each household. Although most data are collected in household visits, an increasing proportion of the later interviews rely completely 

or partly upon telephone interviews. One-fifth of the sample is new each 

quarter, with a corresponding one-fifth of households completing the fiveinterview sequence. The Diary survey collects usable data from 7,100 

households per year, each keeping two one-week diaries. Diary placements 

occur during 52 weeks of the year, with approximately 273 diaries being 

completed each week.

Most of the cost is associated with the Interview survey, which produces about 36,000 completed interviews per year, compared to about 

14,000 one-week diaries. The “total” data collection cost for the CE surveys in 2010 was $21.2 million, with the Interview survey costing $17 

million, or about 80 percent of the total.

THE PANEL’S INVESTIGATION

The panel received input from a wide variety of sources. Investigations 

conducted by the Gemini Project provided critical background. Several 

panel members themselves use CE microdata. The panel also reviewed 

published research and held a session at the 2011 CE Microdata Users’ 

Conference. The panel also studied the complexities of the CPI program 

and how the CE supports it.

Based on these investigations, the panel makes the following conclusions about the use of the CE. (The numbers represent the location of the 

conclusion in the full report; thus, more background on the conclusions 

below is in Chapter 4.)

Conclusion 4-1: The CPI is a critical program for BLS and the nation. 

This program requires an extensive amount of detail on expenditures, 

at both the geographic and product level, in order to create its various 

indices. The CPI is the current driver for the CE program with regard 

for the level of detail it collects. The CPI uses over 800 different expenditure items to create budget shares. The current CE supplies data for 

many of these budget shares. However, even with the level of detail that 

it currently collects, the CE cannot supply all of the budget shares used 

by the CPI. There are other data sources from which the CPI currently 

generates budget shares.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

4 MEASURING WHAT WE SPEND

Conclusion 4-2: The CPI does not utilize the panel nature of the current 

CE. Instead the national and regional estimates employed by the CE 

assume independence of households between quarters on the Interview 

survey, and independence between weeks on the Diary survey.

Conclusion 4-3: The administration of some federal programs depends 

on specific details collected from the CE. There are currently no other 

available sources of consistent data across years for some of these 

programs.

Conclusion 4-4: Economic researchers and policy analysts generally do 

not use CE expenditure data at the same level of detail required by the 

CPI. More aggregate measures of expenditures suffice for much of their 

work. However, many do make use of two current features of the CE 

microdata: an overall picture of expenditures, income, and household 

demographics at the individual household level; and a panel component 

with data collection at two or more points in time.

Most panel members experienced the CE Interview, the CE Diary, or 

both as a respondent. These “field” experiences provided broad understanding when connected with insight from top methodological researchers 

through the Gemini Project’s CE Methods Workshop (December 2010). 

In addition, the panel studied findings from periodic debriefings of field 

representatives on how respondents formulate answers (e.g., use of records 

vs. no records) and the challenges respondents face in answering accurately.

The panel’s Household Survey Producers Workshop (June 2011) was 

organized around several critical topics, including consumer expenditure 

surveys in other countries and survey design experiences on other topics 

and issues. The workshop brought together U.S. and international presenters; university, private-sector, and government-sector experiences; and data 

collection experiences on a myriad of topics.

The next step was to commission two groups of researchers to develop 

potential redesigns for the CE surveys. Their proposals encouraged outsidethe-box thinking on new collection strategies, technologies, and procedures. 

The two proposals were presented at a Redesign Options Workshop organized by the panel in October 2011.

Thus, the panel was challenged to bring together the diverse experiences of data users: from those who use it for the CPI to those who study 

consumer behavior. It was further challenged by the work of statisticians 

and survey methodologists who design sampling strategies and survey questionnaires to improve data quality in varied situations. In addition, it was 

challenged by the practical requirements of data collection and new ideas 

to improve data quality.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

SUMMARY 5

WHY THE CE NEEDS TO BE REDESIGNED

The CE surveys are long and arduous. In the Interview survey, the 

typical respondent answers without being able to consult other members 

of the household and only infrequently refers to records. The level of detail 

exceeds what a person can recall for a three-month period. In the Diary 

survey, respondents are asked to remember to record details of many small 

purchases and to list each expenditure separately in a complicated booklet.

In addition, consumer spending has changed dramatically over the 

past 30 years through such things as online shopping, electronic banking, 

payroll deductions, and greater use of debit and credit cards. Shopping in 

“big box” stores that sell a huge variety of items challenges people’s ability 

to recall the amount spent on specific categories of expenditures.

Through comparisons, reported expenditures in both the Interview 

and Diary surveys tend to be lower than the amounts suggested by the Personal Consumption Expenditures (PCE) data from the Bureau of Economic 

Analysis. Although there are important conceptual differences between the 

CE and PCE, the differences suggest both CE surveys underreport consumer 

expenditures.

Conclusion 5-1: Underreporting of expenditures is a major quality 

problem with the current CE, both for the Diary survey and the Interview survey. Small and irregular purchases, categories of goods for 

specific family members, and items that may be considered socially 

undesirable (alcohol and tobacco) appear to suffer from a greater percentage of underreporting than do larger and more regular purchases. 

The Interview survey, originally designed for these larger categories, 

appears to suffer less from underreporting than does the Diary survey 

in the current design of these surveys.

Estimates derived from the Interview and Diary differ significantly for 

many expenditure categories in part because many questions are posed in 

quite different ways. For example, the Interview asks for an estimate of 

the household’s weekly expense for grocery shopping and then for portions spent for nongrocery items. In contrast, the Diary asks for a listing of 

individual food items purchased for home consumption during a specific 

week of the year.

Conclusion 5-2: Differences exist between the current Interview and 

Diary reports of expenditures. Differences in questions, context, and 

mode are likely to contribute to these differences. The error structures 

for the two surveys, and for different types of questions in the Interview survey, may be different. Because of these differences we cannot 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

6 MEASURING WHAT WE SPEND

conclude whether a recall interview or a diary is inherently a better 

mode for obtaining the most accurate expenditure data across a wide 

range of items. Both have real drawbacks, and a new design will need 

to draw from the best (or least problematic) aspects of both methods.

Sources of Underreporting in the Interview

The panel’s review suggests underreporting of expenditures may stem 

from a number of considerations, rather than a single cause. Asking respondents to spend more than five hours over the course of a year answering 

detailed questions about their expenditures is a substantial burden. The 

field representative, concerned about the respondent’s willingness to agree 

to additional interviews, may be hesitant to press too hard for accurate 

recall or the use of records. Under these conditions, it seems likely that the 

field representative and respondent both benefit from keeping the interview 

as short and pleasant as possible.

Conclusion 5-3: Motivational factors of both the respondent and field 

representative appear to negatively influence the quality of the CE 

Interview data. This leads the panel to the judgment that a changed 

incentive and support structure for both respondents and field representatives will be needed for a future CE redesign to motivate high-quality 

reporting and reduce fatigue.

It becomes apparent to Interview respondents that answering “Yes” to 

a particular question (e.g., “Did you purchase any pants, jeans, or shorts?”) 

leads to being asked a number of detailed, follow-up questions. The respondent is then asked whether they purchased other “pants, jeans, or shorts,” 

and the cycle begins again.

Conclusion 5-4: The current structure of the Interview questionnaire 

cycles down through global screening questions, and asks multiple additional questions when the respondent answers “Yes” to a screening 

question. As this cycle repeats itself, a respondent “learns” and may 

be tempted not to report an expenditure in order to avoid further 

questions.

Recall of specific detailed expenditures is further complicated because 

the item may be only one of several items in a single purchase. The diverse 

ways of purchasing, paying, or authorizing payment and the challenge of 

connecting specific expenditures to any payment records seem likely to 

encourage estimation rather than exact reporting.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

SUMMARY 7

Conclusion 5-5: The current design of the CE Interview questionnaire 

makes the cognitive task of recalling expenditures difficult and encourages estimation.

Some questions on the Interview survey are particularly difficult, such 

as asking respondents to report exact amounts of savings or value of assets 

now compared to one year earlier and exact dates of purchases for specific 

items. Even respondents who keep meticulous records may find that their 

records are not organized to allow honest answers to some questions.

Conclusion 5-6: Some questions on the current CE Interview questionnaire are very difficult to answer accurately, even with records.

It is not possible for many people to recall exact dates and amounts 

of expenditures over three months. Whereas certain items (e.g., house payments) may not vary and thus can be remembered, others (e.g., clothing 

and food away from home) may vary dramatically.

Conclusion 5-7: Three months is long for accurate recall of many items 

on the CE Interview survey. This situation is exacerbated by the ancillary details that are collected about each recalled expense. Errors of 

omission are likely to occur, and are a contributing factor to the underreporting of expenditures on this survey. Short recall periods, however, 

may produce more variability in the estimates and provide difficulties 

for economic research.

Field representatives report the use of records in the interview varies greatly. However, the proportion of respondents who never or only 

sometimes use records far exceeds the proportion that always or almost 

always does. Records are used even less when the interview is conducted 

by telephone.

Conclusion 5-8: The use of records is extremely important to reporting expenditures and income accurately. The use of records on the 

current CE is far less than optimal and varies across the population. A 

redesigned CE would need to include features that maximize the use 

of records where at all feasible and that work to maximize accuracy of 

recall when records are unavailable.

Field representatives attempt to interview the person most knowledgeable about expenditures. Most interviews do not involve others, and the 

respondent may not know certain expenditures made by other adult or 

teenage household members.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

8 MEASURING WHAT WE SPEND

Conclusion 5-9: The use of proxy reporting on the CE Interview is 

problematic, and is a potential cause of underreporting of expenditures.

About one-third of the CE interviews, especially the later ones, are 

completed by telephone. These interviews result in fewer positive answers 

to screener questions and do not benefit from an information booklet designed to encourage recall when the field representative visits the household.

Conclusion 5-10: Telephone interviews appear to obtain a lower quality of responses than the face-to-face interviews on the CE, but a substantial part of the CE data are collected over the telephone.

Sources of Underreporting in the Diary

The Diary survey uses a proactive process that involves instructing respondents to report expenditures by all members of the household, asking 

that they record expenditures daily, and providing detailed instructions on 

how to complete the diary. However, evidence that important categories of 

expenditures are less well reported in the Diary than the Interview suggests 

the full potential of the Diary is not being realized. As with the Interview, 

several factors may affect the accuracy of Diary reporting.

Diary reporting asks for expenditures in four categories, with each 

entry asking for multiple pieces of information, placing considerable burden on respondents. Many find it time-consuming and difficult to partition 

receipts into the requested categories. Motivation to complete the diary 

appears to decline over the two-week period.

Conclusion 5-11: A major concern with the Diary survey is that respondents appear to suffer diary fatigue and lack motivation to report 

expenditures throughout the two-week data collection period, and 

especially to go through the process of recording all items in a large 

shopping trip.

Field representatives report some respondents see the 44-page diary as 

too difficult to complete. They are asked by the field representative to collect receipts, to be recorded in the diary during the second household visit.

Conclusion 5-12: A lot of information is conveyed to the diary respondent in a short amount of time. The organization of the diary booklet 

may result in considerable frustration among some individuals, who 

feel they cannot master the instructions. They choose instead to collect 

receipts and leave them for the field representative to enter during the 

follow-up visit.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

SUMMARY 9

The request to record expenditures by day and into broad categories 

requires respondents to flip pages back and forth as they move between 

instruction and recording pages. The diary lacks a clear navigational path, 

and the visual layout makes completing the diary difficult.

Conclusion 5-13: It is likely that the current organization of recording 

expense items by “day of the week” makes it more difficult for some 

respondents to review their diary entries and assess whether an expenditure has been missed.

The Diary survey has a short reporting period, which creates concerns 

regarding the collection of larger and less frequent expense items. Also it 

is difficult to get a picture of an individual household’s normal spending 

pattern in only two weeks.

It is not known to what extent respondents seek or are able to obtain 

expenditures from other household members. Even if others are willing to 

provide such information, they may not provide it to the respondent in a 

timely manner.

Conclusion 5-14: Although the diary protocol encourages respondents 

to obtain information and record expenditures by other household 

members during the two weeks, it is unclear how much of this happens.

Response Rates Have Declined

Response rates in 2010 for the Interview survey were 73 percent and 

for the Diary survey, 72 percent. These rates have declined over time, as 

have response rates to most household surveys. Low response from highincome groups is a concern for both surveys.

Conclusion 5-15: Nonresponse is a continuing issue for the CE as it 

is for most household surveys. The panel nature of the CE is not sufficiently exploited for evaluating and correcting either for nonresponse 

bias in patterns of expenditure or for lower compliance in the second 

wave of the Diary survey. Nonresponse in the highest income group 

may be a major contributing factor to underestimates of expenditures.

In assessing both the response and nonresponse issues, concerns exist 

about both the Interview and Diary modes. The panel did not conclude that 

one mode is intrinsically better or worse. However, it believes that different approaches to the use of both methods have the potential to mitigate 

these problems.

The ability to link CE data to relevant administrative data sources (such 
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

10 MEASURING WHAT WE SPEND

as IRS data or data on program participation) could provide additional 

richness for economic research as well as providing potential avenues to 

investigate the impact of nonresponse on the survey results.

Conclusion 5-16: For economic analyses, data on income, saving, and 

employment status are important to be collected on the CE along with 

expenditure data. Aligning these data over time periods, and collecting 

information on major life events of the household, will help researchers 

understand changes in income and expenditures of a household over 

time. Linkage of the CE data to relevant administrative data (such as 

the IRS and program participation) would provide additional richness, 

and possibly provide avenues to investigate the effect of nonresponse.

PATHWAY TO A NEW SURVEY

The current detail and requirements imposed by the multiple and divergent CE data uses are difficult to satisfy efficiently within a single design, 

and the panel believes that tradeoffs must be made. The panel recommends 

a major redesign of the CE, with the first step to determine priorities among 

the data requirements of the many uses of the CE so tradeoffs can be made 

in a planned and transparent manner. Such prioritization is the responsibility of BLS and is beyond what would be appropriate or realistic for the 

panel to undertake.

Recommendation 6-1: It is critical that BLS prioritize the many uses of 

the CE data so that it can make appropriate tradeoffs as it considers 

redesign options. Improved data quality for data users and a reduction 

in burden for data providers should be very high on its priority list.

Recommendation 6-2: The panel recommends that BLS implement a 

major redesign of the CE. The cognitive and motivational issues associated with the current Diary and Interview surveys cannot be fixed 

through a series of minor changes.

The panel’s most effective course of action (prior to BLS’ prioritysetting) is to suggest alternative designs to achieve different prioritized 

objectives. The panel developed three distinct prototype designs:

•	 Design A focuses on obtaining expenditure data at a detailed level 

through a “supported journal,” a diary-type self-administered data 

collection with tools that reduce recordkeeping while encouraging 

the entry of expenditures when memory is fresh and receipts available. Design A also has a self-administered recall survey to collect 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

SUMMARY 11

larger and recurring expenses. It collects a complete picture of 

household expenses over six months, with reporting periods varying by expense group.

•	 Design B uses a recall interview coupled with a short supported 

journal. It provides data for 96 expenditure categories (rather than 

the more detailed expenses provided by Design A) and collects 

complete expenditures over an 18-month period in three waves. It 

builds a dataset particularly useful for economic and policy analysis. This design also involves a small follow-on survey used to help 

understand measurement errors in the main survey.

•	 Design C incorporates elements of both Designs A and B. It collects the detail of expense items as in Design A while providing 

a household profile for six months. To do both, it uses a more 

complex sample design and employs modeling, collecting different 

information from different households.

The panel wishes to state clearly that evidence on how well each of 

the proposed prototypes would work is missing. The process of selecting a 

prototype or components of a prototype should be based not only on BLS’ 

prioritization of goals, but also on empirical evidence that the proposed 

procedures can meet those goals.

Recommendation 6-3: After a preliminary prioritization of goals of the 

new CE, the panel recommends that BLS fund two or three major feasibility studies to thoroughly investigate the performance of key aspects 

of the proposed designs. These studies will help provide the empirical 

basis for final decision making.

The panel offers the following recommendation that should be viewed 

in the context of BLS’ prioritization of the CE goals.

Recommendation 6-4: A broader set of nonexpenditure items on the 

CE that are synchronized with expenditures will greatly improve the 

quality of data for research purposes as well as the range of important 

issues that can be investigated with the data. The BLS should pay close 

attention to these issues in the redesign of the survey.

All three designs feature tablet computers with wireless phone cards as 

an essential ingredient. The report offers guidelines on the development and 

use of tablets in data collection, but stresses the untested assumptions that 

must be addressed before proceeding with using this tool. The panel also 

recognizes some households will need paper instruments. These instruments 

need to be redesigned to align with the tablets for multimode collection.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

12 MEASURING WHAT WE SPEND

Recommendation 6-5: A tablet computer should be utilized as a tool 

in supported self-administration. However, a paper option should continue to be available for respondents who cannot or will not use a tablet 

computer. Visual design principles should be applied to redesigning the 

paper instrument in a way that improves the ease of self-administration 

and is aligned with the tablet modules.

The panel presents a general roadmap for BLS to follow to complete the 

redesign of the CE. First, it recommends BLS develop a targeted and tightly 

focused plan to achieve a redesign within the next five years, a roadmap 

that should be completed and made public within six months. The Gemini 

Project is in place to do this.

Recommendation 6-6: BLS should develop a preliminary roadmap 

for redesign of the CE within six months. This preliminary roadmap 

would include a prioritization of the uses of the CE, an articulation 

of the basic CE design alternative that is envisioned with the redesign, 

and a listing of decision points and highest priority research efforts that 

would inform those decisions.

Another key element of the prototypes is the use of incentives to motivate respondents to complete data collection and provide accurate data. 

The panel recommends an appropriate incentive program be a fundamental 

part of the future CE program. The report provides guidelines for developing an incentive structure, but the details can only be determined with 

appropriate CE-specific research.

Recommendation 6-7: A critical element of any CE redesign should be 

the use of incentives. The incentive structure should be developed, and 

tested, based on careful consideration of the form, value, and frequency 

of incentives. Serious consideration should be given to the use of differential incentives based on different levels of burden and/or differential 

response propensities.

The panel had numerous discussions about alternative data sources 

as a replacement or adjunct to collecting survey data. Although the use of 

such information at the aggregate or the micro (respondent/household) level 

holds great promise, the panel also recognized such use is accompanied by 

risk, particularly from a cost/quality tradeoff perspective. A serious risk 

and concern is over the continued availability of outside sources over time. 

The panel decided not to recommend specific external datasets in its three 

prototypes. However, the panel encourages BLS to continue to explore 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

SUMMARY 13

administrative data sources for the future and provides general guidelines 

for doing that.

Recommendation 6-8: BLS should pursue a long-term research agenda 

that integrates new technology and administrative data sources as part 

of a continuous process improvement. The introduction of these elements should create reductions in data collection and processing costs, 

measurement error, and/or the statistical variance and complexity of 

the CPI estimate. The agenda should address the robustness of new 

technology and a cost/quality/risk trade-off of using external data.

The panel points to the value of a strong internal BLS research staff. It 

recommends further development and expansion of their research capabilities in order to respond to the rapidly changing contextual landscape for 

conducting national surveys.

Recommendation 6-9: BLS should increase the size and capability of 

its research staff to be able to effectively respond to changes in the 

contextual landscape for conducting national surveys and maintain 

(or improve) the quality of survey data and estimates. Of particular 

importance is to facilitate ongoing development of novel survey and 

statistical methods, to build the capacity for newer model-assisted and 

model-based estimation strategies required for today’s more complex 

survey designs and nonsampling error problems, and to build better 

bridges between researchers, operations staff, and experts in other 

organizations that face similar problems.

Facing the demands of the immediate redesign of the CE and use of tablet computers, the panel recommends BLS find additional expertise through 

outside experts and organizations.

Recommendation 6-10: BLS should seek to engage outside experts and 

organizations with experience in combining the development of tablet 

computer applications along with appropriate survey methods in developing such applications.

Finally, as described above, all three prototypes propose procedures 

and techniques that have not been researched, designed, and tested. The 

prototypes are contingent upon new research undertakings. Much “relevant” background theory and research exist, for which the BLS research 

program and Gemini Project deserve praise. However, they do not provide 

enough specific answers for these new options. Considerable investment 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

14 MEASURING WHAT WE SPEND

must be made in researching elements of the proposed designs, to find specific procedures that are not only workable, but also most effective. These 

prototypes are not operationally ready—much targeted research needs to 

be done.

Recommendation 6-11: BLS should engage in a program of targeted 

research on the topics listed in this report that will inform the specific 

redesign of the CE.

Recommendation 6-12: BLS should fund a “methods panel” (a sample 

of at least 500 households) as part of the CE base, which can be used 

for continued testing of methods and technologies. Thus the CE would 

never again be in the position of maintaining a static design with evidence of decreasing quality for 40 years.

In summary, the CE performs an extremely important role in helping 

understand the consumption patterns of American households and more 

appropriately targeting critical policies and programs. The current CE 

design has been in place for four decades, and change is needed. The change 

should begin with BLS prioritizing the many uses of the CE so a new design 

can most efficiently and effectively target those priorities. The panel offers 

three prototype designs and considerable guidance in moving toward that 

ultimate redesign.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

1

Introduction and Overview

The Bureau of Labor Statistics (BLS) of the U.S. Department of Labor 

has tracked expenditures of U.S. consumers for more than a century. 

This chapter provides background for the Consumer Expenditure 

Surveys (CE), an overview of BLS’ recent efforts to improve the quality of 

the data collected in that survey, and the context within which this study 

was framed.

BACKGROUND OF THE CONSUMER EXPENDITURE SURVEYS

The CE is the “only Federal survey[s] to provide information on the 

complete range of consumers’ expenditures and incomes, as well as the 

characteristics of those consumers” (Bureau of Labor Statistics, 2011a). 

BLS has fielded surveys of consumer expenditures for more than 100 years. 

While initially conducted on a periodic basis, these data have been collected 

from households continually since the early 1980s. Since their inception, 

the impetus of these surveys has been to obtain information on changes in 

the cost of living (Carlson, 1974). In fact, the first two such surveys of the 

20th century led to the development of the Cost of Living Index, which was 

the predecessor to the Consumer Price Index (CPI). Providing budget shares 

(index weights) for the CPI remains a primary reason for conducting the 

CE. During the Depression of the 1930s, the use of the survey expanded 

to include more general economic analysis. During the 1950s, 1960s, and 

1970s, data on consumer expenditures were collected approximately once 

a decade (Bureau of Labor Statistics, 2008).

A modern version of the survey was first fielded in 1972–1973, with 

15
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

16 MEASURING WHAT WE SPEND

the Census Bureau selecting the sample and conducting fieldwork under 

contract to BLS. This CE design was the first to highlight its current configuration of two separate surveys (a recall Interview survey and a Diary 

survey) working in tandem (Bureau of Labor Statistics, 2008).

BLS recognized the need to conduct a survey more frequently, noting 

that “rapidly changing economic conditions highlighted by the oil crisis in 

the 1970s illustrated the need for more frequent monitoring of the spending patterns of American consumers. . . . Rapid inflation—in excess of 

13 percent from 1979 to 1980—further demonstrated the need for more 

frequent updates to the CPI budget shares than every decade” (Bureau of 

Labor Statistics, 2010a, p. 1). This led to changing the CE into an annual 

survey based on the 1972–1973 design.

The availability of microdata from these surveys opened the door to the 

investigation of a broad range of important questions, in the public as well 

as the private domains. As noted by the Bureau of Labor Statistics (1978, p. 

1), the 1960–1961 survey “was also valuable in satisfying the growing interest of market researchers, government officials, and private users of data 

on income, expenditures, and assets and liabilities of American families.” 

Carlson (1974, p. 1) points out that by the time of the next periodic expenditure survey in 1972–1973, “[non-CPI] uses of the data [had] become 

increasingly important,” including the evaluation of economic policies, 

provision of supplemental information for the calculation of the National 

Accounts data, and market research.

The broad use of the CE for multiple research needs, in addition to 

the calculation of the budget shares for the CPI, persists to this day. As 

explained by BLS (Bureau of Labor Statistics, 2011a), “[The CE] is used 

by economic policy makers examining the impact of policy changes on economic groups, by businesses and academic researchers studying consumers’ 

spending habits and trends, by other Federal agencies, and, perhaps most 

importantly, to regularly revise the Consumer Price Index market basket of 

goods and services and their relative importance.” Jay Ryan (2010), director of the Consumer Expenditure Survey Division in BLS, said in a presentation to the June 2010 CE Data Users’ Needs Forum that the purpose of 

the CE is “to collect, produce, and disseminate information that presents 

a statistical picture of consumer spending for the Consumer Price Index, 

government agencies, and private data users.”

Since the 1980 makeover, BLS has improved the basic survey design of 

the CE (Bureau of Labor Statistics, 1983, 1997). The most important of 

these improvements were the conversion of the “Interview questionnaire” 

to computer-assisted personal interviewing (CAPI) in 2003 and a more 

“user-friendly” redesign of the Diary form in 2005. Other smaller changes 

also have been made, often associated with a regular biennial review that 

can initiate over 100 changes to the questionnaire and survey procedures. 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

INTRODUCTION AND OVERVIEW 17

Even so, modifications in the CE design have not kept pace with the changes 

in how consumers make (and remember) purchases, the reluctance of the 

public to respond to surveys, and the availability of newer survey methodology and technology.

CONTEXT FOR THIS STUDY

In 2009, perceived decline in the quality of data collected spurred BLS 

to embark upon a concentrated effort to study and understand the potential 

sources of error in the CE. Known as the Gemini Project, this multiyear 

project seeks both to understand the potential causes of the decline in CE 

data quality and to design improvements that would reduce measurement 

error. As part of the Gemini Project’s efforts, BLS asked the National Research Council, through its Committee on National Statistics, to convene 

an expert panel. Box 1-1 provides the Statement of Task for the Panel on 

Redesigning the BLS Consumer Expenditure Surveys (referred to as “the 

panel” in this report).

Michael Horrigan, BLS associate commissioner for prices and living 

conditions, addressed the panel at its first meeting on February 3, 2011, 

providing more specific expectations. He called for flexible recommendations, saying that the “design recommendations should include a menu of 

comprehensive design options with the highest potential, not one specific 

all-or-nothing design.” He also stated that the “design recommendations 

should be flexible to allow for variation in program budget, staffing resources and skills, ability of the data collection contractors to implement, 

BOX 1-1

Statement of Task

The National Research Council will convene an expert panel to contribute to

the planned redesign of the Consumer Expenditure Surveys (CE) by the U.S. 

Bureau of Labor Statistics (BLS). The panel will review the output of a data user 

needs forum and a methods workshop, both convened by BLS. It will also conduct a household survey data producer workshop to ascertain the experience of 

leading survey organizations in dealing with the types of challenges faced by the 

CE and a workshop on redesign options for the CE based on papers on design 

options commissioned from one or more organizations. Based on the workshops 

and its deliberations, the panel will produce a consensus report at the conclusion 

of a 24-month study with findings and recommendations for BLS to consider in 

determining the characteristics of the redesigned CE (National Research Council, 

2011b).
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

18 MEASURING WHAT WE SPEND

legal agreements to be obtained (e.g., access to other data sources), etc.” 

A full statement of this communication to the panel is presented in Appendix B.

Historically, the primary use of the CE data has been for the BLS’ 

CPI, a Principal Federal Economic Indicator of the United States. The CPI 

program uses the CE data to produce the budget shares for each of 211 

expenditure items, and the CE collects detailed expenditures for more than 

800 items used in the construction of the budget shares. In order to produce these budget shares, the CE collects a highly detailed disaggregation 

of a household’s annual spending. As an additional product from the CE, 

BLS publishes annual expenditure tables, collapsing the 800+ items into 

96 different expenditure categories. BLS also produces microlevel data 

files for use in basic economic research and policy analysis. The users of 

the microdata generally are satisfied with these more aggregated categories 

of spending, but they have other requirements. For example, they want a 

complete picture of spending, income, and assets for each household in the 

survey. These users also need data collected on these households at multiple 

time periods to facilitate investigations of how spending and income change 

in different conditions.

From a survey design perspective, the uses of the CE have competing 

requirements. Setting expectations in his original communication with the 

panel, Michael Horrigan stated that the “CE needs to support CPI needs” 

and the “CE needs to support other data users as much as possible as long 

as the design to meet those needs meets the needs of the core CE mission” 

(see Appendix B). BLS also laid out the CPI Requirements of CE in Casey 

(2010). In May 2011, BLS issued a separate paper entitled Consumer Expenditure Survey (CE) Data Requirements (Henderson et al., 2011), which 

laid out the comprehensive CE needs beyond those of the CPI. The paper 

states, “for purposes of this document, the CPI constraints are assumed to 

be suspended. This is a theoretical exercise, and in no way indicates a lack 

of support for the CPI program after the survey redesign. This is simply to 

delineate CPI versus non-CPI requirements for the CE” (Henderson et al., 

2011, p. 2).

At a Redesign Options Workshop convened by the panel in late October 2011, the breadth of requirements for the CE stimulated considerable 

discussion. On November 11, 2011, BLS modified its expectations for the 

panel’s work:

Therefore, contrary to previous direction to the panel that both the CPI 

Requirements of the CE (William Casey, June 17, 2010) and the CE Data 

Requirements (Henderson, Passero, Rogers, Ryan, Safir, May 24, 2011) 

collectively form the requirements for the survey, the program managers 

ask that the panel members treat the CE Data Requirements as the mandatory requirements for the survey. The CPI data requirements document 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

INTRODUCTION AND OVERVIEW 19

is still helpful in terms of providing larger context for data usage, but are 

not requirements that the panel’s recommendations need to meet. We hope 

that this relaxation of constraints provides the Panel with greater flexibility 

in considering their recommended design changes. (See also Appendix B.)

The panel has interpreted this modification to its charge as providing 

it with greater flexibility in design options to consider. In particular, the 

panel has considered redesign options that, while supporting the CPI, do 

not provide the full breadth of detailed expenditures currently supplied by 

the CE to the CPI. Remaining is the need to provide a complete picture of 

spending, income, and assets for each household, and to capture data for 

a constant period of time and at a minimum of twice while the household 

is in the survey sample. There is also flexibility in these requirements: “The 

CE regards a complete picture of spending at the CU [consumer unit] level 

to be a requirement, although by using global questions, imputation, or 

other methods, it is not required that all expenditures be collected at the 

same level of detail from each CU” (Henderson et al., 2011).

It is important to note that the panel did not interpret this modification in expectations as a statement from BLS management that they have 

decided that the CE will not continue in the future to support the greater 

level of detail needed by the CPI. That is still an open question.

OVERVIEW OF THIS REPORT

This report summarizes the work of the Panel on Redesigning the BLS 

Consumer Expenditure Surveys.

After this brief background in Chapter 1, Chapter 2 describes the many 

uses of the CE. The chapter notes that the CE has three critical but diverse 

uses, all of which have great importance for U.S. society: input into the CPI, 

administration of a diverse array of government programs, and research 

that provides insight into policy decisions such as the effects of taxes or 

other economic stimuli.

The current design, implementation, and costs of the CE’s two 

components—the Interview survey and the Diary survey—are explained 

in Chapter 3.

Chapter 4 summarizes the panel’s investigations into issues with the 

current CE. Through a workshop in June 2011 and other feedback, the 

panel gathered and carefully considered insights about the CE and explored 

how other large surveys are conducted. The panel also commissioned the 

development of two proposals on potential CE redesigns as a starting point 

to consider new directions. These workshop sessions and the two proposals, which contributed to the panel’s conclusions and recommendations, are 

summarized in this chapter.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

20 MEASURING WHAT WE SPEND

Chapter 5 lays out the panel’s case about why the CE should be substantially redesigned, noting potential sources of error and respondent 

burden in both the Diary and Interview surveys. The chapter makes note of 

underreporting in both versions as compared to other sources of consumer 

information, most notably Personal Consumption Expenditures (PCE).

Chapter 6 presents three potential redesign options developed by the 

panel, as well as the panel’s recommendations in moving forward. As expressed in these recommendations, the panel urges BLS to prioritize the uses 

of CE data, to create a roadmap for a redesign, and to conduct targeted 

research to ensure that any new effort is both workable and effective.

Appendix A contains a dissent statement from three panel members followed by a response by the majority of the panel. Appendixes B through F 

provide additional background information on various panel activities; and 

Appendix G provides biographical sketches of panel members and staff.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

2

The Many Uses of the Consumer 

Expenditure Surveys

This chapter emphasizes the importance of this unique federal survey 

by looking in more depth into the broad spectrum of its use. The 

chapter begins with a discussion of how the Consumer Expenditure 

Surveys (CE) are used in the construction of budget shares for the Consumer 

Price Index (CPI). Subsequent sections highlight many other uses of the CE, 

including a discussion of the role it plays in the administration of certain 

federal programs as well as in policy analysis and economic research.

CE DATA PROVIDE CRITICAL INPUT FOR 

CALCULATING THE CONSUMER PRICE INDEX

In 2002, the National Research Council described the essential role of 

the CPI:

The Consumer Price Index (CPI) is one of the most widely used statistics 

in the United States. As a measure of inflation it is a key economic indicator. It serves as a guide for the Federal Reserve Board’s monetary policy 

and is an essential tool in calculating changes in the nation’s output and 

living standards. It is used to determine annual cost-of-living allowances 

for social security retirees and other recipients of federal payments, to 

index the federal income tax system for inflation, and as the yardstick for 

U.S. Treasury inflation-indexed bonds. (National Research Council, 2002)

The Bureau of Labor Statistics (BLS) calculates this index by “observing prices for a sample of goods and services that consumers purchase, and 

then creating aggregate estimates of price change using average expenditure 

21
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22 MEASURING WHAT WE SPEND

budget shares from data that CE provides” (Casey, 2010, p. 1). BLS publishes indexes on a monthly basis for different categories of products and 

services. Casey (2010) provided an in-depth description of the use of CE 

data by the CPI program. Most of the particulars included in this section 

are based on that paper.

The CPI program currently produces four indexes. The CPI-U is the 

most comprehensive index, measuring price changes for all urban consumers.1 A second index, the CPI-W, restricts that target population to the 

subset of urban consumer units in which the majority of income is earned 

in wage-earning or clerical occupations. A third index, the C-CPI-U, has the 

same population coverage as the CPI-U. Unlike the CPI-U, however, it uses 

an index formula that accounts for changes in consumer spending patterns 

in response to changes in relative prices at all levels of index construction. 

A fourth index, the CPI-E, is an experimental measure that reflects the 

spending patterns of urban consumer units in which the reference person 

is 62 years of age or older.

Types of Data Required by the CPI

Currently, the CE provides the CPI with expenditure data for urban 

consumer units, along with the demographic information necessary to 

implement the coverage definitions of the indexes described above.

Demographic Data

For the CPI-U, the CE must (1) allow the identification of urban consumer units and (2) support the construction of subnational CPIs. Additional information is required on sources of income, the percent of income 

from different sources, and the age of the reference person in the consumer 

unit, in order to construct the CPI-W and the CPI-E, respectively. Finally, 

information on the housing tenure of the consumer is necessary for calculating expenditures on the components of shelter cost. Although no other 

demographic information is required for the current set of CPIs, Casey 

(2010) states that CPI researchers find additional demographic data useful 

for constructing other experimental indexes and pursuing other research.

1The CPI-U does not include the spending patterns of people living in rural nonmetropolitan 

areas, farm families, people in the Armed Forces, and those in institutions, such as prisons 

and mental hospitals.
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THE MANY USES OF THE CONSUMER EXPENDITURE SURVEYS 23

Expenditure Data

For almost all expenditure categories, the CPI requires net out-ofpocket expenses exclusive of any finance charges. The main exception to 

this rule is the requirement that the CE collect the (implicit) rental value of 

owner-occupied houses to construct the budget share of the CPI component 

“Owner’s Equivalent Rent.” Expenditures on major home appliances and 

certain household maintenance expenses for homeowners are also imputed 

from the expenditures of renters on these items. This is another reason why 

housing tenure is a critical demographic variable in the CE. The CPI-U does 

not require expenditure data for investments, life insurance, interest payment, charitable contributions, or business expenses.

Point-of-Purchase Data

Although the CE currently collects a limited amount of information 

on where consumers purchase goods and services, the CPI does not currently use any of these outlet data. Rather, the CPI program uses a separate 

survey, the Telephone Point of Purchase Survey (TPOPS) (Bureau of Labor 

Statistics, 2011f), to gather this information. However, the CPI program 

would be interested in expanding the outlet data collection on the CE to 

provide alternatives to the TPOPS that would be more accurate and better 

integrated with the expenditure data.

Income Data

The CPI uses information on income (total income; income from wageearning and clerical worker occupations) to classify each unit in or out of 

the CPI-W population. Other than this, the CPI does not require information on income or any of its components, including child support and 

alimony payments.

Geographic Detail

Although the CE survey covers all consumer units in the country, the 

CPI uses only information on urban consumer units. Regarding geographic 

breakouts, the top priority of the CPI program is to measure the “All-items, 

U.S. City Average” index with precision. In order to do that, the current 

sampling methodology and index construction techniques require the CE 

to provide reliable, accurate expenditure estimates for 38 geographic areas. However, the publication of indexes for the 38 areas is of secondary 

concern.

CPIs are published on a monthly basis for the country’s three largest 
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24 MEASURING WHAT WE SPEND

metropolitan areas (New York, Chicago, and Los Angeles), bimonthly for 

another 11 metropolitan areas, and semiannually (using six-month averages) for 13 additional metropolitan areas. Separate regional indexes are 

also published for urban areas in three size classes—metropolitan areas 

with populations greater than 1.5 million, metropolitan areas with populations less than 1.5 million, and all nonmetropolitan urban areas (separate 

indexes for nonmetropolitan areas are not available for the northeast and 

west regions). Because of smaller sample sizes for both consumer expenditures and prices, the expenditure breakdowns for these geographically 

based indexes are less detailed.

Periodicity

Except for calculation of the C-CPI-U, the CPI program requires only 

annual expenditure estimates from the CE. Annual expenditure estimates 

needed to calculate the CPI-U, CPI-W, and CPI-E indexes are estimated by 

averaging annual expenditure budget shares over two consecutive years. 

The C-CPI-U, on the other hand, uses the expenditure budget shares from 

adjacent months to calculate price change between the two months, although information from the prior 12 months is used to reduce variance.

Expenditure Category Detail

The key requirement of the CE from the CPI program—the requirement 

that is potentially most demanding—is the need for expenditure detail. The 

CPI program uses CE data to calculate expenditure budget shares for 8,018 

“elementary indexes.” The 8,018 budget shares are derived by multiplying 

the 211 item strata by the 38 subnational areas for which budget shares 

are required (31 areas for the 27 cities for which individual indexes are 

published, with 3 for the New York Combined Statistical Area [CSA], 2 

each for the Chicago and Washington-Baltimore CSAs, plus 7 regions by 

city-size strata). The current CE sample is too small to support independent 

estimation of 8,018 budget shares, however, so the budget shares for subnational areas are derived by combining expenditure data specific to the 

subnational area with expenditure data for a broader geographical area that 

contains the subnational area using composite estimation. Composite estimation “weights” the subnational-area-specific and broader-area estimates 

according to their precision. The greater the variance in a subnational-area 

budget share (the lower the variance of the broader-area budget share), 

the lower the budget share assigned to the subnational-area budget share 

in the composite estimate. Moreover, the 27 metropolitan areas for which 

indexes are published are also part of the more aggregated region-by-sizeclass indexes.
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THE MANY USES OF THE CONSUMER EXPENDITURE SURVEYS 25

Consequently, the real constraint for using CE data in the CPI program 

is the need for national item budget shares of an acceptable precision and 

enough precision at subnational levels to support an acceptable compositeestimation procedure. It was difficult for the panel to infer exactly what 

this requirement is.

That CPI requirements are not strictly imposed is reinforced by the 

fact that the necessary precision to select “entry-level items” is honored in 

the abeyance: “CE does not currently meet this requirement and CPI must 

aggregate expenditures to the ELI [entry-level item]-Region level in order 

to have a large enough sample for each probability” (Casey, 2010, p. 10).

THE CE PROVIDES DATA CRITICAL IN 

ADMINISTERING GOVERNMENT PROGRAMS

The CE data provide an overall picture of consumer expenditures for 

the nation. In doing so, the CE provides detailed data on very specific expenses not available elsewhere. Federal agencies and some state agencies use 

a wide range of these specific estimates to administer important programs. 

Although far from a complete enumeration, this section describes some 

important uses of the CE in federal programs. Much of this information 

was presented at the June 2010 CE Data User Needs Forum (see http://

www.bls.gov/cex/duf2010agendafinl.pdf) and expanded upon when panel 

members conducted follow-on discussions. A summary of some of those 

discussions is in Appendix C.

The CE Provides Important Information on the Cost of Health Care

The Centers for Medicare & Medicaid Services in the U.S. Department 

of Health and Human Services is responsible for producing the National 

Health Expenditure Accounts. Among many purposes, these accounts allow for the tracking and projecting of health care spending by businesses, 

households, and governments. These accounts contribute to the discussion 

of who ultimately pays for health care in the United States and the burden 

borne by different sectors of the economy to finance health care into the 

future. These are critical issues for the country today.

The Health Expenditure Accounts obtain data from a number of different sources, requiring consistent data over time. The CE is the source of 

private health insurance expenditures paid by households for individually 

purchased insurance. There is no other available source of consistent data. 

Additionally, the Health Expenditure Accounts use data from the CE to 

estimate out-of-pocket expenses for major health services. These include 

expenses for health services not covered (including deductibles and copayments) by insurance and public programs such as Medicare and Medicaid. 
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26 MEASURING WHAT WE SPEND

It also includes payments into Health Savings Accounts. The demographics 

and income data collected in the CE allow analysis of these data by age of 

head of household and household income. Staff at the Centers for Medicare 

& Medicaid Services use aggregate estimates published by BLS and also the 

CE microdata for additional analysis. They use income and asset data from 

the CE for special analyses (Cowan, 2010).

Taxpayers Have an Easy-to-Use Deduction Based on CE Data

The Internal Revenue Service (IRS) calculates “optional sales tax tables” using CE data. Taxpayers filing a Schedule A have the option to 

deduct state and local sales tax in lieu of state and local income tax. Many 

taxpayers, particularly those in states without a state income tax, choose 

this option. Those taxpayers may keep sales receipts throughout the year 

and calculate the sales tax they paid. Alternatively, they can use the IRSsupplied “optional sales tax tables” or online sales tax calculator to determine their deduction.

The IRS uses CE data to calculate household estimated sales tax for 

these tables (and for the online calculator). IRS supplies BLS with state 

and local taxability data. BLS combines this information with CE data to 

calculate household-level sales tax estimates. BLS provides these estimates, 

along with variables such as household income and family size, back to the 

IRS. The IRS models these data variables to produce the “optional sales tax 

tables” by household income and family size (Lee, 2010).

CE Data Help Support Child Welfare

The Center for Nutrition Policy and Promotion (CNPP) at the U.S. 

Department of Agriculture publishes Expenditures on Children by Families, an annual report that estimates what it costs to raise a child from 

birth through age 17, broken down by household income. This publication 

provides an extremely valuable source of information associated with child 

welfare. States use it in determining child support guidelines and foster 

care payments. The CE provides the major source of data for this publication, including child-specific expenditures such as clothing purchased for 

children. CNPP staff also use CE data on general household expenditures, 

allocating a proportion of these expenditures to children based on other 

sources of data (Lino, 2010).

CE Data Contribute to the Measurement of Poverty

In 1995, the National Research Council of the National Academy 

of Sciences issued a report titled Measuring Poverty: A New Approach
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THE MANY USES OF THE CONSUMER EXPENDITURE SURVEYS 27

(National Research Council, 1995). The report criticized the methodology 

used to make the official poverty measurement and recommended improved 

methodology based on CE data. This new Supplemental Poverty Measure 

uses actual expenditure data for food, shelter, clothing, and utilities to 

derive poverty thresholds that are compared to measurements of disposable 

income from the Current Population Survey. This Supplemental Poverty 

Measure is currently being computed in addition to the historical measure 

(Short, 2010).

CE DATA: A CORNERSTONE FOR POLICY 

ANALYSIS AND ECONOMIC RESEARCH

Good policy is created on a foundation of high-quality information 

about available options and sustained by analyses of whether the policy 

achieves its intended effect. CE data are used extensively to evaluate policy 

and conduct applied research on a wide range of issues important to 

American households. The CE’s value is that it provides the “complete 

picture,” tying household demographics to data on the complete range of 

consumers’ expenditures and incomes. It is used extensively by economic 

policy makers examining the impact of policy changes on economic groups, 

and by businesses and academic researchers studying consumers’ spending 

habits and trends. This section presents examples of the crucial analysis 

and research that depend on data from the CE. The intent of this section 

is to illustrate the breadth and depth of research and policy analysis made 

possible through CE data.2

Effect of Taxes and Tax Rebates Examined Using CE Data

Effects of Possible Cap and Trade Regulation

The Congressional Budget Office (CBO) is often called upon to project 

the possible effects of pending regulations. Harris and Perese (2010) did 

this for the highly publicized and politicized Global Warming Pollution 

Reduction Program proposed in H.R. 2454. Using the CE data, they predicted how the proposed regulation might affect the purchasing power of 

households at different income levels. (Their presentation at the BLS Data 

User Needs Forum was not part of an official CBO projection.) Grainger 

and Kolstad (2010) pursued a parallel but separate effort to the CBO staff 

members, also using the CE data. After concluding that these indirect taxes 

would inequitably affect households at lower income levels, they proposed 

2Authors of a number of these studies use the terms expenditures, consumption, and spending somewhat interchangeably.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

28 MEASURING WHAT WE SPEND

policy options that could mitigate the regressive distributional effects of a 

carbon emissions policy.

Impact of Direct Taxes on the Cost of Living

Gillingham and Greenlees (1987) defined a cost-of-living index including direct taxes. They used CE data to approximate the “tax and price 

index” (TPI) at the household level from 1967 to 1985. On average, the 

TPI increased much more rapidly than a CPI-type index, but the impact of 

taxes was highly progressive. They also used the TPI to evaluate alternative methods for indexing the federal tax system and to study an indexed 

system historically, comparing indexation with the CPI to actual tax policy, 

a tax system with constant parameters, and an “exact” indexing scheme 

(Gillingham and Greenlees, 1990). They concluded that (1) the sequence of 

tax reductions implemented between 1967 and 1985 fell short of mimicking 

indexation, (2) wealthier households would have benefited relatively more 

than lower-income households from indexation, and (3) CPI indexation 

would not have completely eliminated bracket creep.

Effect of Added Gasoline Taxes

West and Williams (2004) looked at potential increases in gasoline 

taxes and the likely distributional effect of those increases. They used the 

CE data to incorporate behavioral responses to estimate a demand system 

that included other goods and services as well as gasoline. They recommended implementing a larger gasoline tax and then using those available 

funds to reduce labor taxes. Archibald and Gillingham (1981) used CE data 

to analyze the distributional implications of either gasoline rationing or a 

tax on gasoline. The use of a model developed by Archibald and Gillingham 

(1980) implies that the incidence of a tax or the benefit of rationing with a 

“white market” in coupons would be very progressive.

Effect of Taxes on Charitable Giving

Reece and Zieschang (1985), building on Reece (1979), who also used 

CE data, used CE data to estimate models of the impact of tax deductibility 

on the level of charitable giving. They used econometric techniques that 

addressed the complexity introduced by a progressive step function of marginal tax rates to obtain consistent estimates. They then used the estimated 

parameters to shed light on the impacts of four alternative tax policies on 

the level of charitable giving. Their results did not support the proposition 

that the alternative policies they considered would lead to substantial increases in the level of charitable contributions at the cost of relatively small 

losses in tax revenue.
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THE MANY USES OF THE CONSUMER EXPENDITURE SURVEYS 29

Impact of Economic Stimulus Payments to American Households

As part of an economic stimulus program, tax rebate checks were 

mailed to American households during the summer of 2001. Did households use these rebates in ways that would help stimulate the economy? 

Exploiting the panel data aspect of the CE, Johnson, Parker, and Souleles 

(2006) found that households spent roughly two-thirds of their rebate 

checks during the first six months after receipt. This study was possible 

because of the addition of questions to the CE to collect information about 

the amount of the stimulus checks and when they were received.

A similar economic stimulus program was initiated in May 2008. To 

analyze the 2008 stimulus, questions were again added to the CE about the 

rebate checks, including a question about what the households explicitly 

did with the checks. Paulin (2011) found that 49 percent of recipients used 

the money to pay off debt, while 30 percent reported that they spent the 

money. Younger recipients were more likely to spend the rebate than were 

older recipients.

CE Data Lead to a Better Understanding of the American Household

Gender Makes a Difference

Can the relative contributions to running a household by the members 

of that household be measured? Does gender make a difference in the value 

of the contribution? De Ruijter, Treas, and Cohen (2005) used data from 

the CE to “value” some routine domestic tasks, and categorized those 

tasks as typically “male” or “female.” For example, doing laundry might 

be a typically “female” task, while mowing the lawn a typically “male” 

task. They “valued” these tasks by equating their value with the amount 

households spent when they outsourced those specific domestic services. 

They also examined how those expenditures differ by living arrangement.

In an examination of the effect of gender on certain purchasing patterns, Kroshus (2008) assessed how much was spent by households on 

commercially prepared food (as a percent of total food expenditures) by 

gender and marital status. Not surprisingly, households headed by unmarried men spend a higher percent of their food expenditures on commercially 

prepared food.

Age Makes a Difference

Fisher et al. (2007) used 20 years of CE data to examine financial characteristics of older adults related to their home. As individuals grow older, 

their homes become increasingly mortgage-free. Even though this usually 

means that home equity also increases over this time period, few older 
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30 MEASURING WHAT WE SPEND

homeowners take out equity loans. CE data provide a unique way to look 

at generational differences. Paulin (2008) compared young never-married 

adults in 2004–2005 with similar individuals who responded on the CE 

two decades earlier (1984–1985). In real dollars, the 21st century young 

people spent a greater percent of total expenditures on shelter, utilities, and 

education. They spent less on food, transportation, and apparel than their 

1980s counterparts. Health care was relatively unchanged.

 Weagley and Huh (2004) used the CE data to look at the dynamics of 

retirement and near-retirement status on leisure expenditures. Not surprisingly, they found a positive correlation between leisure expenditures with 

retirement, income, and education.

Race and Ethnicity Make a Difference

The CE data are an ideal source for research on consumption spending 

as it differs by household racial and ethnic compositions. García-Jiménez 

and Mishra (2011) examined the demand for meat and meat products and 

found significant differences among households. Their results showed that 

white households purchase less meat (especially chicken and seafood products) than do Hispanic households. African American households purchase 

more pork and chicken than do Hispanics.

Marriage and Cohabitation Make a Difference

Households headed by single mothers, and how their income and 

consumption changed as a group between 1993 and 2003, were studied by 

Meyer and Sullivan (2008) using the CE data. The authors reported that 

income fell sharply (16%) in the first couple of years and then began to rise 

(17%) over the rest of the decade. For consumption, the authors found a 

modest (7% to 12%) rise throughout the decade.

Hawk (2011) used the CE data to understand differences in consumption spending between single people and married couples in their twenties. 

He found that the per capita income of singles was significantly lower than 

their married counterparts, that married couples were more likely to be 

homeowners, and that singles spent more per capita on housing, apparel, 

food, and education. Singles also spent less on health care.

DeLeire and Kalil (2005) examined expenditures on children by the living arrangements of their parents. Using data from the CE, they concluded 

that cohabiting-parent couples spend less money on education and more 

on alcohol and tobacco than do married-parent couples. Cohabiting-parent 

families had spending patterns different from those of divorced singleparent households and never-married single-parent households.
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THE MANY USES OF THE CONSUMER EXPENDITURE SURVEYS 31

Testing Economic Theories of Consumption Behavior

The Life-Cycle/Permanent Income Hypothesis (LCPIH) is the standard 

economic framework for understanding household spending and saving 

decisions over time. While the model provides a number of testable implications, the primary predictions involve how households will choose 

to consume in response to changes in income. When income changes are 

anticipated, the model predicts that consumption will not change contemporaneously, as households base consumption decisions in each period on 

expected lifetime wealth as opposed to current income. Unexpected income 

shocks, which alter lifetime resources, will result in consumption changes. 

Income changes can also be delineated between transitory and permanent 

income changes. Transitory income changes (e.g., a single-year windfall or 

loss) will only have a small impact on consumption as these changes have 

a small effect on lifetime resources. Permanent income changes, which alter income in all future years, will have a much larger effect on household 

consumption.

The CE has long been the unique data source that has enabled researchers to test predictions of the LCPIH using a broad set of consumption measures. Attanasio and Weber (1995) found that using microdata 

containing all expenditure measures for each household dramatically alters 

the empirical findings of previous tests of the LCPIH. First, the authors 

found that whereas many prior studies using aggregate expenditure (e.g., 

national time-series) data yield results inconsistent with the LCPIH, using 

microdata to create aggregates across households in a way that is consistent 

with the underlying economic theory results in estimates that are consistent 

with the model. Second, whereas past studies that had limited consumption 

measures (in many cases, just food consumption) rejected the LCPIH, testing the model using the full set of household consumption available in the 

CE could not reject the model.

Subsequent studies using the CE focused on clearly predictable changes 

in household income to avoid the many potential statistical pitfalls that may 

arise when predicting income changes for households using econometric 

methods. Some studies continue to find results that are consistent with the 

LCPIH. For example, Hsieh (2003) found that Alaskan residents, who receive large, annual oil dividend payments each fall, the amounts of which 

are pre-announced earlier in the year, do not exhibit a change in consumption upon receiving these payments. However, other studies find estimates 

that reject the LCPIH. Parker (1999) found that household consumption 

increases in response to intra-year paycheck increases due to households 

hitting the maximum annual Social Security tax limit, after which they no 

longer pay Social Security tax for that calendar year. Souleles (1999) found 

that household consumption increases in response to income tax refund 
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32 MEASURING WHAT WE SPEND

receipts, although the refund amounts are known to households before the 

checks arrive. Stephens (2008) found that household consumption increases 

once vehicle loans are paid off even though the date and amount of the final 

payment are known in advance by households. Finally, using the CE Diary 

data, Stephens (2003) found that households increase their daily nondurable consumption when their Social Security checks arrive, in contrast to 

the predictions of the LCPIH.

Since the LCPIH models the decisions of individual households, households are able to insure themselves against bad outcomes, such as a job loss 

or disability, only through their own savings. An alternative model that is 

an important economic benchmark for understanding the amount of risk 

that households face is the model of full insurance. In this model, individual 

households are fully insured against their own household-level changes in 

income, although aggregate-level income changes will influence household 

consumption (e.g., a village that pools all of its resources in each year and 

then redistributes them across all households in the village).

Mace (1991) tested the full-insurance hypothesis by exploiting the 

panel feature of the CE to regress changes in household consumption on 

changes in both aggregate consumption and household level “shocks” 

(e.g., changes in income and employment status). She found mixed evidence in support of this benchmark depending on the choice of empirical 

specification, although the preponderance of the evidence favors the model. 

However, Nelson (1994) found that alternative methods of measuring key 

variables, including using more expansive measures of consumption and 

employment changes, consistently reject the full insurance model. Attanasio 

and Davis (1996) focused on the large, observable wage changes that 

occurred between groups, as defined by education level and year of birth, 

during the 1980s to test the full insurance model. They concluded that the 

full insurance model overwhelming fails to explain the large between-group 

changes in consumption found in the CE over the same period.

CE Data Help Measure Well-Being Across Households

Income Inequality Across Households

Heathcote, Perri, and Violante (2010) combined data from the CE, 

the Panel Study of Income Dynamics, the Current Population Survey, and 

the Survey of Consumer Finances to conduct a systematic study of crosssectional inequality in the United States. They found both a continuous and 

sizable increase in wage inequality over the study period.

Krueger and Perri (2006) investigated welfare consequences of this 

growing inequality. The CE helped reveal that poor households do not 

measurably change their consumption in response to lower wages, but in-
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THE MANY USES OF THE CONSUMER EXPENDITURE SURVEYS 33

stead increase their working hours. The authors then assessed “household 

welfare” consequences using a number of techniques. They concluded that 

about 60 percent of U.S. households face welfare losses, with the size of 

those losses ranging from 1 to 6 percent of lifetime consumption for different groups.

Life-cycle models of variability in household savings and wealth accumulation (with comparable socioeconomic configurations) have ascribed 

cause to such factors as risk aversion, preferences for work or leisure in 

later life, and income replacement rates. Bernheim, Skinner, and Weinberg 

(2004) used data from the CE and the Panel Study of Income Dynamics 

to evaluate these conclusions. Instead, they found the “empirical evidence 

therefore casts doubt on theories that rely on differences in relative tastes 

for leisure, home production, or work-related expenses to explain the 

variation in wealth at retirement” (Bernheim, Skinner, and Weinberg, 2001, 

p. 854). The authors concluded that these factors appeared to be outside 

the context of the life-cycle model.

Understanding Poverty and How to Measure It

Fisher et al. (2009) examined the financial well-being of households of 

older Americans. They first distinguished between the notions of “income” 

poor and “consumption” poor. The authors emphasized that it is important 

to understand these two poverty definitions and the populations they imply 

in order to effectively measure the success of various poverty programs. 

Using 20 years of CE data, they reported that the measure of “poverty” is 

cut by one-fourth if that measurement uses both income and consumption. 

Older households that are white, homeowners, and married and have a high 

school diploma are more likely to be “poor” using only the income definition and not the combined definition. That is because they have sufficient 

assets to raise consumption above the poverty threshold.

Potential Nutritional Barriers in Poor Families

Do some households have to choose between paying heating bills and 

buying food? Bhattacharya et al. (2003) used the CE to track expenditures 

on both food and home fuels. They found that households (both rich and 

poor) had to increase expenditures on home heating during particularly 

cold periods. The difference: Poor families decreased their expenditures on 

food by about the same amount as they increased expenditure on home 

fuels, but richer families made no change in food expenditures during these 

same periods. The authors concluded that social programs need to understand this phenomenon and provide special assistance during cold-weather 

periods.
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34 MEASURING WHAT WE SPEND

Stewart, Blisard, and Jolliffe (2003) concluded that low-income households spend less on fruits and vegetables than other households. They based 

this conclusion on a study of expenditures on fruits and vegetables and how 

these expenditures correlate with income. More surprisingly, these same 

households do not purchase more fruits and vegetables when they have a 

positive change in income.

Health Care Expenditures

What do households purchase when they do not purchase health insurance? Levy and DeLeire (2008) asked this question and used CE data 

to try to answer it. They found that households without health insurance 

spend more (compared to insured households) on things such as housing, 

food, alcohol, and tobacco. The authors raised the possibility that these 

households may be uninsured because they spend a greater percentage of 

total income on basic needs.

Does Medicare eligibility reduce out-of-pocket health care expenditures for those individuals? Have those expenses been changing over time? 

Duetsch (2008) looked at out-of-pocket health care expenditures of persons 

whose age was 55–64 (Medicare eligibility is 65) and those 65–74. Using 

CE data from 1985, 1995, and 2005, she found health care expenses (as 

a percent of total expenses) increased over those 20 years, but not consistently in real dollars. Between 1985 and 1995, the younger (ineligible) 

group’s health care expenditures decreased 27 percent, while the older 

(eligible) group’s expenditures decreased by 18 percent. Between 1995 and 

2005, the younger group’s health care expenses rose by 22 percent and the 

expenses of the older group rose by 9 percent. In both decades, the older 

group spent more overall on health care than the younger group.

CE Data Are Used to Examine Credit and Debt in American Households

CE data are a tool for examining credit constraints and their effect. 

Ekici and Dunn (2010) examined credit card debt in its relationship to 

consumption. They used a monthly survey of credit card use to impute 

credit card debt into the CE data. They found a negative correlation between debt and change in consumption. Specifically the authors showed 

that a $1,000 increase in credit card debt leads to a 2 percent decrease 

in consumption growth. They also examined credit card debt by various 

household characteristics.

Grant (2007) investigated whether lower borrowing rates of some 

groups were related to credit constraints or lower demand. He estimated 

credit constraints and showed how these constraints differ by various 

household characteristics. His work found that households headed by 
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THE MANY USES OF THE CONSUMER EXPENDITURE SURVEYS 35

young, college-educated individuals were the most credit constrained. He 

also found that an observed lower level of borrowing among African 

American households appears to be affected by demand rather than credit 

constraints.

CE Provides a Tool to Examine IndustrySpecific Markets and Special Topics

The comprehensive nature of the CE data allows for analysis that is 

targeted to expenditures within specific markets.

Transportation Expenses

The probability of leasing a car is increased for households that are 

older, white or Hispanic, college educated, living in the Northeast and Midwest, living in a large Metropolitan Statistical Area, not having teenagers, 

and having a higher income. These results were found by Fan and Burton 

(2005) as they looked at the demographics that lead to a decision to “buy 

or lease” an automobile. However, the authors indicated that these effects 

are diminished when one controls for the vehicle characteristics.

Are communication expenses in some way a substitute for transportation expenses? Models developed by Choo, Lee, and Mokhtarian (2007) 

showed that these two areas of expenditure have both substitution and 

complementary effects.

Expenditures on Technology

Yin, DeVaney, and Stahura (2005) built a conceptual model using CE 

data to estimate the amount of money households are likely to spend on 

computer hardware and software. They then provided implications for 

consumers and policy makers. Hong (2007) used the CE data to examine 

the “substitution” relationship between expenditures on the Internet and 

other entertainment goods. He found Internet expenses have an effect on 

expenditures of recorded music.

Charitable and Political Giving by Households

There is a U-shape relationship between charitable giving and household income, with households at both the lower and higher income ranges 

giving a higher percentage of their income to charity than middle-income 

households. James and Sharpe (2007) found this result as they used CE 

data to examine the distribution of charitable giving by household income. 

The authors found that the charitable givers in the lower income ranges 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

36 MEASURING WHAT WE SPEND

are proportionately older, low-income but higher asset households. Dehejia, 

DeLeire, and Luttmer (2007) found that individuals who contribute to religious organizations are better able to insure consumption against income 

shocks. James (2009) examined the characteristics of households that make 

political contributions. He used a decade of CE data from 1995 to 2005. 

His analysis showed that political contributions were positively associated 

with income, wealth, education, and well-being. Political giving was negatively correlated with being a single female and being nonwhite.

SUMMARY

For over a century, the collection of consumer expenditures on the CE 

and its predecessor surveys has played an irreplaceable role in understanding the market basket of goods and services that consumers purchase. While 

providing budget shares for the CPI remains a vital reason for the collection 

of consumer expenditures, a number of prominent uses of these data have 

emerged since the inception of these surveys. When contemplating revisions 

to the CE, it is important to remember that the CE has three critical but 

diverse uses, all of which have great importance for U.S. society: the CPI, 

the administration of a diverse array of government programs, and research 

that provides insight into policy decisions such as the effects of tax or other 

economic stimuli.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

3

The Current Consumer 

Expenditure Surveys

This chapter describes the two components of the Consumer Expenditure Surveys (CE)—the Interview survey and the Diary survey. The Panel on Redesigning the BLS Consumer Expenditure Surveys identified some limitations associated with these two surveys, and these issues are 

presented in Chapter 5.

DESIGN AND IMPLEMENTATION

As noted in Chapter 1, the current CE are based on the design of 

1972–1973 predecessor surveys (Bureau of Labor Statistics, 2008). The 

CE consist of two different surveys of U.S. households conducted independently, the Interview survey and the Diary survey. Each of these surveys is 

designed to represent the total U.S. civilian noninstitutional population, 

using the 2000 Census 100-Percent Detail File augmented by new construction permits and through coverage improvement techniques.

In both surveys, the sampled unit consists of:

(1) all members of a particular housing unit who are related by blood, 

marriage, adoption, or some other legal arrangement, such as foster children; (2) a person living alone or sharing a household with others, or living as a roomer in a private home, lodging house, or in permanent living 

quarters in a hotel or motel, but who is financially independent; or (3) two 

or more unrelated persons living together who pool their income to make 

joint expenditure decisions. Students living in university-sponsored housing are also included in the sample as separate consumer units. (Bureau of 

Labor Statistics, 2008, p. 2)

37
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

38 MEASURING WHAT WE SPEND

This report refers to this sampled unit or consumer unit as a household.

The two surveys are sampled and conducted independently. Expenditure estimates are made independently from the two surveys for various 

purchased items (goods and services). The concept of having two distinct 

surveys is fairly simple. The Interview survey was “designed to collect data 

on the types of expenditures respondents can be expected to recall for a 

period of 3 months or longer. In general, expenditures reported in the Interview Survey are either relatively large, such as for property, automobiles, or 

major appliances, or occur on a fairly regular basis, such as for rent, utility 

bills, or insurance premiums” (Bureau of Labor Statistics, 2008, p. 2). On 

the other hand, the Diary survey was designed “to obtain expenditure data 

on small, frequently purchased items, which are normally difficult to recall. 

These items include food and beverage expenditures, at home and in eating 

places; housekeeping supplies and services; nonprescription drugs; and personal care products and services” (Bureau of Labor Statistics, 2008, p. 3).

In reality, there is considerable overlap in expense items collected on 

the surveys, increasing the total response burden. The Interview survey, 

reaching beyond its original design, also collects information on small, 

frequently purchased items that may be difficult to recall. For example, it 

collects expenses for prescription medication, fresh flowers, sewing notions, 

and the full range of clothing and shoes. It also collects average monthly 

cost of gasoline and the average weekly cost of buying food in a grocery 

store. Similarly, the Diary survey, with its open listing sheets, collects many 

larger items identified as appropriate for the Interview survey. For example, 

it collects information on the purchase of dishwashers, china, jewelry, and 

vehicles (Bureau of Labor Statistics, 2011b,c).

The final Bureau of Labor Statistics (BLS) estimate presented in the 

Consumer Expenditure Survey Integrated Tables for any particular item is 

based on an estimate from one or the other of these surveys. Creech and 

Steinberg (2011) describe how the survey source is selected for each published item, and Bureau of Labor Statistics (2009a) provides examples of 

which source was used for different items for the Consumer Expenditure 

Survey Integrated Tables for 2009. Some choices are fairly obvious. New 

refrigerators and living room chairs were estimated from the Interview 

survey. The Diary survey was used to estimate expenditures for “wine 

consumed at home” and “lunch at a fast food restaurant.” However, the 

choice is not always intuitive. For example, bedroom linens were estimated 

from the Diary survey, while curtains and draperies were estimated from 

the Interview survey. Under the grouping of “housewares,” silver service 

pieces were estimated from the Diary survey and other service pieces from 

the Interview survey. Luggage was estimated from the Diary survey, while 

smoke alarms were estimated from the Interview survey.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

THE CURRENT CONSUMER EXPENDITURE SURVEYS 39

The survey questionnaires ask for dollar amounts for services and 

goods purchased by a household member during the prescribed reference 

period. They exclude all business-related or reimbursed expenditures.

Survey documents for the CE can be found on the BLS website. Box 

3-1 provides the specific links.

Design and Implementation of the Interview Survey

Sampling Frame and Sample Size for the Interview Survey

The sample for the Interview survey begins with a selection of 91 areabased primary sampling units (PSUs). The PSUs may be individual counties, 

groups of counties, or “core-based statistical areas” (CBSAs) identified by 

the Census Bureau. Of these 91 PSUs, 21 are metropolitan CBSAs with 

over 2.7 million people, while 16 are considered “rural.” The rest fall 

somewhere in between (Bureau of Labor Statistics, 2012) as indicated in 

Box 3-2.

Each year the Census Bureau selects approximately 15,000 addresses 

from these PSUs for contact on the Interview survey using the augmented 

2000 Census 100-Percent Detail File. The bureau uses a rotating panel 

design with sampled households contacted quarterly for five quarters. This 

process results in a usable sample size of approximately 7,100 interviews 

per quarter.

BOX 3-1

Web Links to CE Survey Documents

Interview CAPI instrument (2011): http://www.bls.gov/cex/capi/2011/cecapihome.

htm

Interview Survey Information Booklet 2011: http://www.bls.gov/cex/current/i_info

book.pdf

Diary Survey Form 2005-10: http://www.bls.gov/cex/csx801p.pdf

Computer Assisted Diary Household Characteristics Questionnaire 2011-12: 

http://www.bls.gov/cex/ced/2011/cedhome.htm

Diary Survey Information Booklet 2011-12: http://www.bls.gov/cex/current/d_info

book.pdf
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

40 MEASURING WHAT WE SPEND

Implementation of the Interview Survey

Figure 3-1 displays the flow process of the Interview survey. Work on 

the Interview survey begins each month with one-third of the quarterly 

sample. The Interview survey had an overall response rate of 73 percent 

in 2010. (See “Comparison of Response Rates” in Chapter 5, for a discussion of how these rates are calculated.) Households receive a pre-survey 

notification letter. The Interview survey is designed for collection through 

an “in-person” visit by a field representative, and most data are collected in 

this fashion. However, field representatives are allowed to fall back to a telephone interview and often do. Of completed cases in 2010,1 approximately 

17 percent were completed entirely via the telephone, and an additional 48

percent were completed in part over the telephone. The relative number of 

cases completed over the telephone increases over later phases of the survey. 

Of interviews completed in quarter 1 (initial interview), only 2 percent were 

interviewed entirely via telephone and an additional 34 percent had some 

data collection over the phone. By quarter 5 in the rotation, 22 percent of 

completed interviews were conducted entirely over the telephone, and an 

additional 50 percent had some data collected over the phone. Whether via 

personal visit or over the telephone, the field representative uses a computerassisted personal interviewing (CAPI) instrument.

1Data on interviews by mode for 2010 come from an internal spreadsheet of costs provided 

to the panel by BLS.

BOX 3-2

Classification of Primary Sampling Units (PSUs)

The 91 PSUs used in the CE sample are classified into four categories:

1. 21 “A” PSUs, which are metropolitan core-based statistical areas (CBSAs) 

with a population over 2 million people

2. 38 “X” PSUs, which are metropolitan CBSAs with a population under 2 million people

3. 16 “Y” PSUs, which are “micropolitan” CBSAs, defined as areas that have

at least one urban cluster of at least 10,000 but less than 50,000 population, plus adjacent territory that has a high degree of social and economic 

integration with the core as measured by commuting ties

4. 16 “Z” PSUs, which are non-CBSA areas, and are often referred to as 

“rural” PSUs

SOURCE: Bureau of Labor Statistics (2012, p. 5).
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

41

Fig3-1.eps

landscape

Interview Survey—5 Quarterly Interviews per Household

Sample

Stage 1: 91 PSUs selected. 

Stage 2: 15,000 addresses selected per year, with first contact spread over 3 months of the quarter. 

Contact lettermailed to sample.

Quarter 1 

Initial FR Visit 

Bounding–data not used for estimation. Collects: 

• Demographics • Inventory of 

durable goods 

• 1 month’s recall 

of expenditures 

Usable sample size = 7,100 households 

Quarter 2 

2nd FR Visit 

Collects: 

• 3 months’ recall 

of expenditures 

• Detailed income 

and asset data 

Usable sample size = 7,100 households 

Quarter 3 

3rd FR Visit 

Collects: 

• 3 months’ recall 

of expenditures 

Usable sample size = 7,100 households 

Quarter 4 

4th FR Visit 

Collects: 

• 3 months’ recall 

of expenditures 

Usable sample size = 7,100 households 

Quarter 5 

5th FR Visit 

Collects: 

• 3 months’ recall 

of expenditures 

• Detailed income 

and asset data 

Usable sample size = 7,100 households 

Operational options: After initial in-person interview, subsequent 

quarterly interviews may be conducted over the telephone. 

FIGURE 3-1 Process flow of the Interview survey.

NOTE: FR = field representative, PSUs = primary sampling units. SOURCE: Panel designed flowchart based on documentation (Bureau of Labor Statistics, 2012).
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

42 MEASURING WHAT WE SPEND

In the rotating design, approximately one-fifth of the sample is new to 

the survey each quarter. Only limited data from this initial survey contact 

are summarized as part of the BLS published estimates. Instead the interview is used to “bound” the time frame for asking future questions on 

expenditures and to provide baseline data about the household.

The Interview survey is currently designed to collect detailed data on 

approximately 60 to 70 percent of household expenses. The detailed questions are arranged by major expenditure groupings (such as housing, transportation, clothing, and health care) and ask the respondent to “recall” 

purchases made for detailed items during the past three months. In order 

to cover an additional 20 to 25 percent of the household expenditures, the 

questionnaire also collects three-month average estimates of purchases of 

food and related items.

The first, second, and fifth interviews of a household deserve additional 

description. In the first interview with a new household, the survey collects 

demographic data for the household, inventories major durable goods 

within the household, and asks for only a one-month recall of expense 

items. Data from this initial interview are used in only limited ways in BLS 

expenditure estimates. Instead, data collected in this interview are primarily 

used for classification of the household, to help prevent duplicate expense 

reporting in subsequent quarters, and to minimize telescoping (a common 

tendency in recall surveys to report for a time period beyond the reference 

period). During the second and fifth interviews, the Interview survey also 

asks a series of questions to obtain a detailed financial profile. This profile includes income data such as salaries, unemployment compensation, 

alimony and child support, assets, and investments. These questions use a 

12-month recall period.

Proxy reporting is currently used in the CE Interview and Diary surveys, allowing a single household representative to respond for the entire 

household. The accuracy of data collected from proxies depends heavily on 

how much the proxy respondent knows about the daily expenditures of all 

household members. BLS uses proxy reporting in a tradeoff for lower costs 

and reduced burden. Field representatives attempt to interview the “most 

knowledgeable” member of the household, who is more often female than 

male.

The BLS estimates that the average time to complete a quarterly Interview survey is approximately 60 minutes. The panel believes that many 

interviews are rushed, and so this time estimate may be shorter than what 

is needed for accurate reporting of expenditures (see p. 83 of Chapter 5, 

“Motivation in Interview Survey,” for more discussion on this point). 

The CE Interview survey does not currently offer monetary incentives to 

respondents.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

43

Fig3-2.eps, landscape

Diary Survey—2 Consecutive 1-Week Diaries

Sample

Stage 1: 91 PSUs selected. 

Stage 2: 12,000 addresses selected per year, with first contact spread over 

the entire year. 

Contact lettermailed to sample. 

 Initial FR Visit 

Beginning of Week 1 

In-person visit. Collects: 

• Demographics 

Trains on diary-keeping and places Week 1 diary.Usable sample size = 273 households 

Telephone Contact 

Mid-Week 1 

FR calls diary-keeper to check on progress, answer questions, and encourage continued diary-keeping. 

FR Visit #2 

Beginning of Week 2 

In-person visit. FR reviews Week 1 diary 

and works with diarykeeper to fill gaps. FR provides additional training as needed. FR collects Week 1 diary 

and places the Week 2 

diary.Usable sample size = 

273 households

FR Visit #3 

End of Week 2 

In-person visit. FR reviews Week 2 diary

and works with diarykeeper to fill gaps. 

FR collects Week 2 diary.

Operational options: FRs may place both Week 1 and Week 2 diaries 

on the first visit, so there is not an interim in-person visit from FR. 

Mid-week telephone call is also optional.

FIGURE 3-2 Process flow of the Diary survey.

NOTE: FR = field representative, PSUs = primary sampling units.SOURCE: Panel designed flowchart based on documentation (Bureau of Labor Statistics, 2012).
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

44 MEASURING WHAT WE SPEND

Design and Implementation of the Diary Survey

Sampling Frame and Sample Size for the Diary Survey

Selection of the Diary survey sample begins with the same 91 PSUs 

selected for the Interview survey. Each year the Census Bureau then draws 

a separate sample of approximately 12,000 addresses from the augmented 

2000 Census 100-Percent Detail File. The effective sample size for the Diary 

survey is 7,100 interviewed households, producing approximately 14,200 

weekly diaries. The placement of diaries is spread equally over the 52 weeks 

of the year. There are approximately 273 diaries completed each week.

Implementation of the Diary Survey

Figure 3-2 displays a process flow of the Diary survey. Households selected for the Diary survey are asked to keep two sequential one-week diaries of expenditures of household members. Excluded are expenses incurred 

by a household member while away from home overnight. Also excluded 

are credit and installment plan payments made during the two-week period. 

The Diary survey had an overall response rate of 72 percent in 2010. (See 

“Comparison of Response Rates” in Chapter 5, for a discussion of how 

these rates are calculated.)

The Diary survey begins with a pre-survey notification letter to selected 

households, followed by a visit from a field representative to “place” the 

first week’s diary. As with the Interview survey, the Diary survey is designed 

for proxy reporting. A single member of the household is asked to keep 

the diary, recording expenditures for the household and for household 

members. At this initial visit, the field representative also collects data on 

a Household Characteristics Questionnaire about the family composition 

and demographics. BLS uses this information for household classification. 

BLS also uses this information as a way to associate Diary households 

with similar households from the Interview survey to analyze comparable 

expenditures and create integrated tabulations.

The Diary form is left with the person designated as the household respondent. It is a paper-based “self-reporting” form. The form is structured 

around the “day” of the purchase and by classification of whether the item 

was (1) food purchased away from home; (2) food purchased for consumption at home; (3) clothing; or (4) other expenditures during the week. The 

household respondent is asked to list any item purchased and to provide a 

detailed description of the item as well as its cost.

As the survey is currently designed, the field representative picks up and 

reviews the diary after the first week and places a second week’s form with 

the household diary-keeper. The field representative returns at the end of the 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

THE CURRENT CONSUMER EXPENDITURE SURVEYS 45

second week, picks up the second diary, and collects additional data on the 

work experience and income for the previous year of individual household 

members. In practice, both diaries are sometimes placed and picked up at 

the same time, without the intervening visit. The CE Diary survey does not 

currently offer monetary incentives to respondents.

COST OF THE CONSUMER EXPENDITURE SURVEYS

BLS provided the panel with an internal spreadsheet containing calendar 2010 survey costs. The cost discussions on the Interview survey and the 

Diary survey are based on this spreadsheet.

The total “field” cost for the CE in 2010 was $21.2 million. Total field 

cost includes interviewer salaries/benefits, mileage, training, awards, and 

related expenses. It also includes Census staff cost in the Field Division. 

It does not include BLS staff costs or costs for Census employees in other 

divisions.

The total cost for the Interview survey in 2010 was $17.4 million. This 

includes five quarters of interviews, dealing with approximately 60,000 

cases. The cost per case worked in 2010 was $283, while the cost per completed interview was $487. Interviewing and mileage costs composed 60 

percent of the total. Excluding costs associated with noninterviews, the cost 

for interviews completed entirely or in part via in-person interviewing was 

$324 each, while those interviews completed entirely over the telephone 

cost $146 each. The cost per case worked for the first quarter was approximately 14 percent higher than the average of the other four quarters. This 

is probably due to more screen-outs in the initial contacts and a greater use 

of telephone interviewing in subsequent quarters.

In fiscal 2010, the total cost for the Diary survey was approximately 

$3.8 million, or approximately 17.9 percent of the total cost of both CE 

surveys. At the same time, the Diary survey has approximately 20 percent 

of the total contacts for the CE surveys.

Table 3-1 provides a summary of the design features and costs of both 

surveys for comparison.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

46 MEASURING WHAT WE SPEND

TABLE 3-1 Design Features of the Consumer Expenditure Surveys

Current Consumer Expenditure Surveys

Interview Survey Diary Survey

Population U.S. civilian noninstitutional 

population

U.S. civilian noninstitutional 

population

Information Collected Household and personal 

expenditures: large and 

regularly occurring 

expenditures via 3+ month 

recall

Household and personal 

expenditures: small, frequently 

purchased items

Sampling Frame 2000 Census 100-Percent 

Detail File augmented by new 

construction permits

2000 Census 100-Percent 

Detail File augmented by new 

construction permits

Sample Design Multistage area probability 

sample using 91 Primary 

Sampling Units; rotating 

quarterly panel design for five 

quarters

Multistage area probability 

sample using 91 Primary 

Sampling Units; sampled 

addresses are equally spread 

across 52 weeks

Mode and Field 

Protocols

Personal interview (CAPI) 

with decentralized telephone 

interviewing (CATI) allowed

Initial interview and 2 

consecutive weekly diaries; 

weekly follow-up to retrieve 

diary

Household Sample Size 15,000 addresses 12,000 addresses

Average Interview Time 60 minutes (quarterly 

interview)

Unknown

Completed Interviews in 

2010

35,843 14,599

Overall Response Ratea 73.4% 71.5%

Approximate Cost (2010) $17 million $3.7 million

Approximate Cost per 

Completed Case (2010)

$476 $248 

Data Collection Period 

for Each Household

13 months 2 weeks

aSee Chapter 5, Nonresponse section, for a fuller explanation of response rates.

SOURCES: Panel-designed table based on BLS documentation (Bureau of Labor Statistics, 

2012) and internal spreadsheet provided to panel.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

4

The Panel’s Investigation into 

the Issues with the CE

In 2009, the Bureau of Labor Statistics (BLS) initiated a systematic, 

comprehensive study of the challenges faced by the Consumer Expenditure 

Surveys (CE) with the goal of redesigning the existing surveys to reduce 

measurement error. BLS states that the mission of this venture, known as 

the Gemini Project, is

to redesign the Consumer Expenditure surveys (CE) to improve data 

quality through a verifiable reduction in measurement error, particularly 

error caused by underreporting. The effort to reduce measurement error 

will combat further declines in response rates by balancing any expected 

benefits of survey design changes against any potential negative effects on 

response rates. Any improvements introduced as part of the Gemini Project 

should not increase budgetary burden, but instead, should remain budget 

neutral. (Bureau of Labor Statistics, 2011e, p. 1)

Since the beginning of the Gemini Project, BLS has undertaken a number 

of information-gathering meetings, conference sessions, forums, and workshops to aid in its mission. All of these have provided valuable information 

for the Panel on Redesigning the BLS Consumer Expenditure Surveys in its 

current task, and many of the papers presented at them are cited in this 

report. These events included the National Bureau of Economic Research’s 

Conference on Improving Consumption Measurement (July 2009); Survey 

Redesign Panel Discussion, cosponsored by the Washington Chapter of the 

American Association for Public Opinion Research (DC-AAPOR) and the 

Washington Statistical Society (January 2010); Data Capture Technology 

Forum (March 2010); AAPOR Panel on Respondent Record Use (May 

47
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

48 MEASURING WHAT WE SPEND

2010); Data User Needs Forum (June 2010); and CE Methods Workshop 

(December 2010). More information can be found about these events, plus 

copies of papers presented at them, on the BLS website (see http://www.

bls.gov/cex/geminimaterials.htm). Additionally, BLS has conducted internal 

research in support of the Gemini mission and has contracted targeted research from the private sector.

The panel commends BLS on its multiyear, systematic review of the 

methodology used in the CE.

Building on the work of the Gemini Project, the panel investigated the 

opportunities and drawbacks related to the CE. As described in this chapter, 

their additional investigation included feedback from CE data users, panel 

members’ reactions when they assumed the role of survey respondents, 

and a workshop to learn more about other large-scale household surveys. 

Redesign options developed by two outside groups in response to a Request 

for Proposal also formed an important part of the panel’s investigations, 

and the chapter concludes with some of the main points and discussions 

elicited by these two options.

FEEDBACK FROM DATA USERS

The panel was diligent in reaching out to data users and trying to 

understand the many uses of the CE. Many of those uses are outlined in 

Chapter 2, including input into calculation of the Consumer Price Index 

(CPI), development of government programs, and as the basis for research 

and analysis. Several panel members are themselves regular users of the CE 

microdata. The panel reviewed a broad set of published research that used 

the CE as a source of information. As noted above, members studied the 

papers from the BLS 2010 Data User Needs Forum. They also attended 

conferences held by the National Bureau of Economic Research and held a 

session with microdata users at the 2011 CE Microdata Users’ Conference. 

Finally, the panel spoke one-on-one with many users of the CE data.

The panel studied the complexities of the CPI program and how the 

CE supports those important indices. Considerable detail on this topic is 

provided in Chapter 2, in the section “CE Data Provide Critical Input for 

Calculating the Consumer Price Index.” From their investigation, the panel 

made the following two conclusions.

Conclusion 4-1: The CPI is a critical program for BLS and the nation. 

This program requires an extensive amount of detail on expenditures, 

at both the geographic and product level, in order to create its various 

indices. The CPI is the current driver for the CE program with regard 

for the level of detail it collects. The CPI uses over 800 different expenditure items to create budget shares. The current CE supplies data for 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

THE PANEL’S INVESTIGATION INTO THE ISSUES WITH THE CE 49

many of these budget shares. However, even with the level of detail that 

it currently collects, the CE cannot supply all of the budget shares used 

by the CPI. There are other data sources from which the CPI currently 

generates budget shares.

Conclusion 4-2: The CPI does not utilize the panel nature of the current 

CE. Instead the national and regional estimates employed by the CE 

assume independence of households between quarters on the Interview 

survey, and independence between weeks on the Diary survey.

As discussed in the Chapter 2 section “The CE Provides Data Critical 

in Administering Government Programs,” the CE is used by a number of 

federal agencies to administer portions of their programs. To learn more 

details about this particular use of the CE, the panel held in-depth conversations with staff at these agencies. A summary of those conversations 

appears in Appendix C. From their investigation, the panel makes the following conclusion.

Conclusion 4-3: The administration of some federal programs depends 

on specific details collected from the CE. There are currently no other 

available sources of consistent data across years for some of these 

programs.

A third large group of users of the CE data are economic researchers 

and policy analysts from academic institutions, government agencies, and 

private organizations. These users work with tabular estimates produced 

by the BLS, and increasingly with microdata files from the CE. The panel 

talked with a number of these data users, researched the types of questions 

that their analyses addressed, and the characteristics of the CE that were 

important for those analyses. Many examples are provided in the Chapter 2 section, “CE Data: A Cornerstone for Policy Analysis and Economic 

Research.”

Much of this work is geared to understanding household behavior 

and how households adjust their consumption in response to changes in 

circumstances. These changes may be affected by personal events such as a 

change in income, marriage, loss of a job, retirement, the birth of a child, or 

the onset of a disability. Government program changes (such as tax reform, 

adjustments in minimum wage, or health care legislation) can also impact 

household behavior.

For data to be useful in this endeavor, users say it is necessary to have 

panel data with at least two observations. Many analysts indicate the strong 

advantage to having a third observation. A related issue is the length of 

each panel period. Data collected over a short period, such as in the cur-
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

50 MEASURING WHAT WE SPEND

rent two one-week Diary surveys, are able to answer questions related to 

how households respond to events that happen relatively frequently, such as 

receipt of monthly Social Security benefits (e.g., Stephens, 2003). However, 

a wide range of questions requires examining the same household both 

before and after a less frequent event such as a tax rebate, a job loss, or a 

divorce. These questions are more difficult to address with data collected 

over a short time period unless the sample size is rather large.

Regardless of the period over which expenditure is measured, an important complement is relevant household information over the same interval. 

In order to examine whether changes in household circumstances lead to 

changes in household consumption, these circumstances must be measured 

during the same period. The principal variables of interest are income, 

employment, retirement, disability, and marital status.

When panel data have been lacking, researchers have been able to create panels by using “synthetic cohorts.” The idea behind synthetic cohorts 

is that in place of following the behavior of the same individuals over time, 

researchers can create a panel by modeling individual household activity 

based on data from similar groups of households. Using these synthetic 

cohorts, researchers can examine the relationship between changes over 

time. While synthetic cohort data are more difficult to work with, they 

may prove useful for answering some questions. However, for a number of 

policy questions, synthetic cohort data do not provide a useful tool. Thus, 

the following conclusion is made regarding use of the CE for research and 

analysis purposes.

Conclusion 4-4: Economic researchers and policy analysts generally do 

not use CE expenditure data at the same level of detail required by the 

CPI. More aggregate measures of expenditures suffice for much of their 

work. However, many do make use of two current features of the CE 

microdata: an overall picture of expenditures, income, and household 

demographics at the individual household level; and a panel component 

with data collection at two or more points in time.

PANELISTS’ INSIGHT AS SURVEY RESPONDENTS

Panel members wanted to gain firsthand insight into the CE from the 

viewpoint of a respondent, so approximately three-quarters of panel members were interviewed by a Census field representative. Most experienced 

the Interview survey, one kept the Diary, and several did both. Box 4-1 

provides some reactions of panel members to this experience. During the 

process, panel members asked their own questions of the field representatives. Thus, the interview experience for the panel was partly trying to recall 

and answer specific questions about their own expenditures, and partly 
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trying to understand the overall nature of the interviews as experienced 

by others. The field representatives made a number of comments to panel 

members about their “typical” respondents and what they considered normal respondent behavior. The panel believes that this entire process brought 

realism into their discussion of the cognitive issues and potential solutions 

(Committee on National Statistics Panel on Redesigning the Consumer 

Expenditure Survey, 2011).

HOUSEHOLD SURVEY PRODUCERS WORKSHOP: 

DESCRIPTION AND INSIGHTS

Many of the problems and issues facing the CE are also faced by other 

large household survey programs, and the panel wanted to leverage the 

work done on these surveys toward solutions for the CE. In this endeavor, 

the panel planned and held a Household Survey Producers Workshop in 

June 2011 in Washington, DC. (The agenda for the workshop appears in 

Appendix E.) The panel would like to extend its appreciation to the presenters at this workshop for the insights they provided.

BOX 4-1

Reactions of Panel Members Following Their Interviews with 

Field Representatives (FRs)

“The FR said I was the first respondent to EVER consult paper and electronic 

records extensively.”

“The FR interviewed me extremely quickly—fast talker. This seems to be the solution to respondent burden: get through as fast as possible.”

“I got a strong sense of how easy it becomes to say ‘no’ to a category simply 

because saying ‘yes’ so clearly leads to more trouble.”

“After the interview, the FR told me about the suspicion of government and concerns about intrusiveness that the FR regularly encounters, and it is much more 

intense and extreme than I had expected.”

“The diary appears to have some very significant strengths compared to quarterly 

recall. I did not see the immediate problems of being unable to respond to questions, as I experienced when doing the CE quarterly interview. This is a much 

easier task, even though at first blush it seems like keeping a diary for two weeks 

was going to be extraordinarily difficult.”

SOURCE: Committee on National Statistics Panel on Redesigning the Consumer Expenditure 

Survey (2011).
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52 MEASURING WHAT WE SPEND

The program for this workshop was built around six topics (see 

Box 4-2), each of which was specific enough to inform the panel’s redesign 

deliberations yet broad enough to be able to present different perspectives 

of the topics. After different presentations on a topic, one member of the 

panel discussed the insights that these presentations had for the CE redesign. A summary of the main points raised in the six sessions follows.

Session 1: Alternative Ways of Measuring Consumer 

Expenditures—International Experiences

The purpose of this session was to have representatives from other 

countries talk about how they collect consumer expenditures, the issues 

they face, and their approach to these issues. The panel was looking for differences and similarities that might inform redesign options for the U.S. CE.

Dubreuil et al. (2011) discussed how Statistics Canada redesigned 

its consumer expenditure survey. The new design of Canada’s Survey of 

Household Spending looks similar to the current CE in the United States. It 

uses a combination of a recall interview and 14-day diary for each selected 

household, with varying recall periods for different expense items. The 

previous Canadian design incorporated a “balance edit,” a feature that a 

number of users of the CE would like to see incorporated in the CE redesign. The Canadian redesign no longer includes this feature.

Horsfield (2011) discussed the UK Living Costs and Food Survey. It is 

BOX 4-2

Sessions at the Household Survey Producers Workshop

Session 1: Alternative Ways of Measuring Consumer Expenditures—International 

Experiences

Session 2: Designs That Add Flexibility in Data Collection Mode

Session 3: Designs That Effectively Mix Data from Multiple Surveys and/or 

External/Administrative Data to Produce Estimates

Section 4: Designs That Effectively Mix Global and Detail Information to Reduce 

Burden and Measurement Error

Session 5: Designs That Use “Event History” Methodology to Improve Recall and 

Reduce Measurement Error in Recall Surveys

Session 6: Diary Surveys That Effectively Utilize Technology to Facilitate Recordkeeping or Recall

NOTE: See Appendix E for the full agenda of the workshop.
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a relatively short household survey to collect regular expenditures such as 

rent and mortgage payments, along with retrospective information on certain large, infrequent expenditures such as those on vehicles. The program 

predominantly uses a Diary survey, as each individual aged 16 and over is 

asked to keep diary records of daily expenditures for two weeks. Children 

(aged 7–15) complete a simplified diary. Household members receive incentives for completing the diary: 10 pounds ($15.68) per adult, 5 pounds 

($7.84) per child.

Borg (2011) discussed consumer expenditure surveys in Europe and the 

European Union’s efforts to harmonize survey results. The EU countries all 

have their own expenditure surveys carried out under the responsibility of 

their national statistical offices. These surveys are generally periodic rather 

than annual. The primary purpose of these surveys is to produce the budget 

shares for the national consumer price indices, although there has been an 

increasing use of the information at both the national and EU levels. There 

remain some comparability issues among these surveys.

Session 2: Designs That Add Flexibility in Data Collection Mode

One of the primary reasons for the CE redesign is the need to update 

data collection strategies to create greater flexibility in the data collection 

mode. The Interview survey is conducted in person, with a fallback to telephone interviewing when a personal visit is not feasible. The Diary survey is 

dropped off and picked up in person, and the diary information is collected 

on paper forms. This session provided examples of how other surveys are 

incorporating response flexibility or newer data collection methods.

Smyth presented results from Olson, Smyth, and Wood (2011), an experiment within the ongoing Nebraska Annual Social Indicators Survey that 

allows the respondents to choose their mode preference. The experiment 

then uses the respondent’s preferred mode of data collection and tests to see 

if this treatment makes a difference in response. In this limited experiment, 

they found that response rates were higher for those being surveyed in 

their preferred mode. They also found that Web survey response rates were 

lower than those with mail and phone contacts across all preference groups. 

However, they found that results changed within a mixed mode framework.

The Business Research & Development Innovation Survey (BRDIS), 

conducted by the Census Bureau for the National Science Foundation’s National Center for Science and Engineering Statistics, is the nation’s primary 

source of information on business R&D expenditures and the workforce. 

Hough (2011) reported that unlike its predecessor, which was sent to a 

single respondent within a company, the new BRDIS questionnaire is structured to allow and encourage different experts within a single business to 

provide responses in their areas of expertise. There are both paper and elec-
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54 MEASURING WHAT WE SPEND

tronic versions of questionnaires. They have also developed an online toolkit to assist business respondents that includes spreadsheets, fillable PDFs, 

and personalized support by an account manager. Clearly, establishment 

surveys are different from household surveys in many ways, but there are 

similarities from which to extract ideas, such as multiple mode options and 

a toolkit for respondents. Different households and members of the same 

household might have a different comfort level with different collection 

modes. A key point from this presentation is that “one size” does not fit all 

respondents. The BRDIS recognizes that point up front and designs it into 

its methodology. Another point is the toolkit to further assist respondents.

Wine and Riccobono (2011) discussed the National Postsecondary 

Student Aid Study (NPSAS), a survey conducted by RTI International for 

the National Center for Education Statistics that mixes multiple sources of 

data and data collection modes with incentives to obtain and keep student 

respondents.

NPSAS data come from multiple sources, including institutional records, 

government databases, and student interviews. Detailed data on participation in student financial aid programs are extracted from institutional records. Data about family circumstances, demographics, education 

and work experiences, and student expectations are collected from students through a web-based multimode interview (self-administered and 

computer-assisted telephone interviews [CATI]). (National Center for Education Statistics, 2012)

A tailored incentive program is designed into the process to encourage early 

response.

Session 3: Designs That Effectively Mix Data from Multiple Surveys 

and/or External/Administrative Data to Produce Estimates

Some of the information collected on the CE may be available in administrative records or collected on other government surveys. This session 

highlighted surveys that, while collecting large quantities of information 

themselves, also utilize administrative records and/or combine data from 

other survey data collections to reduce the overall burden of the survey or 

to improve the overall quality of data.

Machlin (2011) described how the Medical Expenditure Panel Survey 

(MEPS) matches survey data to health records, combining them with information collected from household members and their medical providers. 

Upon completion of the household interview and obtaining permission 

from the household survey respondents, a sample of medical providers are 

contacted by telephone to obtain information that household respondents 

cannot accurately provide. This part of the MEPS is called the Medical 
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THE PANEL’S INVESTIGATION INTO THE ISSUES WITH THE CE 55

Provider Component (MPC), and information is collected on dates of visit, 

diagnosis and procedure codes, charges, and payments. The Pharmacy 

Component (PC), a subcomponent of the MPC, collects drug detail information, including National Drug Code (NDC) and medicine names, as well 

as date(s) prescriptions are filled, sources, and amounts of payment (Agency 

for Healthcare Research and Quality, 2012).

O’Brien (2011) discussed the Residential Energy Consumption Survey 

(RECS), which collects a multitude of information on houses, appliances, 

and home energy usage. It collects utility records from energy suppliers in 

lieu of self-reports from respondents. As part of this process, the interviewer 

asks household respondents to name their energy suppliers and to produce 

a bill from each supplier. The interviewer uses a portable scanner to scan in 

the bills. The Energy Information Agency then contacts the energy suppliers 

to obtain records for the sampled household unit for the previous year (U.S. 

Department of Energy, 2011)

Schenker and Parsons (2011) discussed combining data from multiple 

surveys to improve quality and reduce burden within the survey program 

of the National Center for Health Statistics (NCHS). They provided four 

examples:

•	 Combining information from the National Health Interview Survey

(NHIS) and the National Nursing Home Survey to obtain more 

comprehensive estimates of the prevalence of chronic conditions 

for the elderly;

•	 Using information from the National Health and Nutrition Examination Survey (NHANES) to improve analyses of self-reported data 

on the NHIS;

•	 Combining information on the Behavioral Risk Factor Surveillance

System with the NHIS to enhance small-area estimation; and

•	 Creating links between various NCHS surveys and administrative

data sources such as air quality data available from the Environmental Protection Agency, death certificate data from the National 

Death Index, Medicare enrollment and claims data from the Centers for Medicare & Medicaid Services, and benefit history data 

from the Social Security Administration.

Session 4: Designs That Effectively Mix Global and Detail 

Information to Reduce Burden and Measurement Error

This session highlighted surveys that, while collecting large quantities 

of information, do so using design strategies and questionnaire modules 

that avoid asking every respondent for all details on each contact.

Aune (2011) discussed the Agricultural Resource Management Survey, 
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56 MEASURING WHAT WE SPEND

an expense and income survey of farming establishments conducted by the 

National Agricultural Statistics Service. It is an annual survey that collects 

detailed information related to the farming enterprise and, to a lesser extent, to the farm household. This survey has multiple modules or versions, 

with sample units assigned to a specific version during the selection process. 

Most versions are designed for personal enumeration, but one is designed 

for mail/Web collection. For a given expense item (such as fuel expenses), 

some versions will ask only the global expense item (total spent on fuel 

of all kinds) and others will ask a detailed breakout of that expense item 

(amount spent on gasoline, diesel, propane, etc.). Regardless of the version 

and mix of global/detail questions, all data are combined in summary estimates and contribute to the state, regional, and national estimates.

Fields (2011a) discussed the current structure of the Survey of Income 

and Program Participation (SIPP) and its use of both “core” and “topical” 

questionnaire items. The SIPP follows households for multiple waves. Core 

questions are asked in all waves, such as the global item “total income.” 

Topical questions are those that are not repeated in each wave. Topical 

modules are designed to gather specific information on a wide variety of 

subjects. Some topical modules cover items such as assets and liabilities, 

real estate property, and selected financial assets. In some instances, the 

topical questions are intermixed with core questions in the interview to 

make the questionnaire flow more smoothly.

Gentleman (2011) discussed two alternatives for asking questions about 

the entire family in the National Health Interview Study. The first alternative asks a global question “does anyone in the family. . . .” An alternative 

questionnaire goes through the family roster and asks individual questions 

for each family member. The NHIS is also used as a screening vehicle for 

follow-on surveys, with many detailed questions saved for those follow-on 

surveys. One result from their experiments on screening questions showed 

that respondents gave fewer “yes” answers to filters as they learned that 

such answers led to additional questions.

Session 5: Designs That Use “Event History” Methodology to 

Improve Recall and Reduce Measurement Error in Recall Surveys

This session highlighted surveys that utilize “event history” methodology to improve the quality of recalled information. The Panel Study of 

Income Dynamics (PSID) was the first major survey to implement “event 

history” methodology to improve the ability of respondents to recall information. Stafford (Beaule and Stafford, 2011) discussed the implementation 

of this methodology in the PSID, which has been a prototype for other 

surveys. They conducted a number of methodological studies as they developed this methodology.
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THE PANEL’S INVESTIGATION INTO THE ISSUES WITH THE CE 57

Fields (2011b) discussed a newly redesigned SIPP that uses event history methodology, pulling from the experiences of the PSID. The SIPP staff 

believe they may be able to use a one-year recall period as effectively and 

accurately with this new methodology as the current design, which uses a 

four-month recall. The new design is scheduled to be operational in 2014. 

This presentation discussed the implementation of “event history” methodology and presented what has been learned so far with the pilot program.

Session 6: Diary Surveys That Effectively Utilize 

Technology to Facilitate Recordkeeping or Recall

Newer technology, such as the Web, smart phones, and portable scanners, has opened possibilities for diary surveys. This session highlighted 

surveys that utilize this newer technology to field innovative diary-type 

surveys.

The National Household Food Acquisition and Purchase Survey 

(FoodAPS) is a new pilot survey sponsored by the U.S. Department of Agriculture designed with an innovative approach to a food diary. Cole (2011) 

discussed the survey, which collects information on food sources, choices, 

quantities, prices, timing of acquisition, and nutrient characteristics for all 

at-home and away-from-home foods and beverages. It also collects household information that may influence food acquisition behaviors. The pilot 

uses color-coded booklets, portable scanners for receipts, regular telephone 

contact to encourage diary-keeping, and incentives as part of the data collection process (U.S. Department of Agriculture, 2011).

Kizakevich (2011) discussed personal diary and survey methodologies 

for health and environmental data collection used by RTI International. 

Among these examples were

•	 PFILES, a real-time exposure-related diary of product use and

dietary consumption in the context of activity, location, and the 

environment. It uses Pocket PCs with headsets for use by respondents, who record survey responses and even take pictures of their 

environment;

•	 Personal Health Monitor for use by patients suffering from posttraumatic stress disorder and mild traumatic brain injuries to help 

clinicians monitor patients’ status while observing symptoms and 

medication usage within the context of daily activities and environmental factors; and

•	 BreathEasy, an Android App, which allows a daily assessment of

asthma triggers, health, and ventilation.
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58 MEASURING WHAT WE SPEND

Bailey (2011) discussed Nielsen Life360 Program, which uses a “digital 

ethnography” approach to measure attitudes, preferences, and behaviors of 

the targeted population using mobile phone surveys, photography, Internetbased journals, video cameras, and Web surveys. The specially equipped 

smart phone prompts respondents to complete a short survey on an hourly 

basis in addition to capturing an image using the built-in camera as a picture description of their surroundings and activities in real time.

Summary of the Workshop

The panel found the workshop presentations to be highly informative 

and to provide important input into panel deliberations. A number of key 

points emerged from the prepared remarks that discussants delivered during the workshop, as amplified in subsequent discussion among panelists.

First, the international comparisons demonstrate that concerns about 

data quality and burden that have led to the need for a redesign of the 

CE are not unique to U.S. data collection efforts, although the size of and 

variability among the U.S. population present particular challenges. The 

alternate methods that the panel observed from other countries made clear 

that a bounding interview is not a universal method, and that it is plausible 

to rethink this aspect of CE administration. It was also clear to the panel 

that, although the methods and approaches from other nations have many 

strengths, they also have their own challenges, and simple wholesale adoption of those methods is unlikely to be a panacea for improving the CE.

Second, adding new modes of data collection needs to be done thoughtfully, attending carefully to whether adding new modes or providing respondents with a choice of mode increases data quality, reduces respondent 

burden, or reduces nonresponse sufficiently to be worth the design, operational, and analytic costs. As the Smyth presentation in session 2 illustrated, 

the scientific community is not yet at a point to fully understand why particular modes work for different respondents.

Third, while it is quite attractive to consider replacing or supplementing respondent-reported data with data from other sources (administrative 

records, data from other surveys) to reduce respondent burden and administrative costs, this is not as straightforward an enterprise as it might seem. 

The hurdles are notable enough—from mode and questionnaire differences, 

to sampling and weighting incompatibilities, privacy and confidentiality 

issues, linkage difficulties, increased agency efforts, data sharing difficulties, and lack of knowledge of costs—that it does not seem plausible to the 

panel that alternate sources could suffice in the short term. There is also 

considerable concern about whether external data would be consistently 

available over time.

Fourth, the panel was impressed by efforts in other U.S. surveys to 
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THE PANEL’S INVESTIGATION INTO THE ISSUES WITH THE CE 59

streamline data collection and rethink what kinds of general and specific 

information need to be asked of respondents. Although the immediate applications to the CE of the particular approaches described at the workshop 

are not entirely clear, and although much remains to be understood about 

the relationship between survey length and respondent burden, the panel’s 

subsequent deliberations and proposals were influenced by such efforts.

Fifth, whether or not event history methods are the only or best way 

to stimulate all respondents’ recall, the panel took note of the insight that 

emerges from studies of alternative interviewing methods. A redesigned CE 

needs to go as far as it can to accommodate respondents’ natural ways of 

thinking about and recalling their expenditures, rather than asking respondents to conceive of their expenditures from the researcher’s perspective. 

More broadly, assuming that respondents can recall purchases accurately 

without consulting records is problematic, and a redesigned CE needs to 

promote the use of records far more than current methods do.

Finally, the panel took very serious note of the opportunities for using new technologies to facilitate more direct and in-the-moment selfadministered reporting of expenditures, as well as for passive measurement 

of expenditures. It will be important for a CE redesign to make as much 

use of these opportunities as feasible, and to start a new forward-thinking 

mode of research and production that continually assesses the changing 

technological landscape and prepares as much as possible for changes before they happen.

REDESIGN OPTIONS WORKSHOP: DESCRIPTION AND INSIGHTS

In order to elicit a broader perspective on possible solutions to the CE’s 

problems, the panel sought formal input from organizations with experience in designing complex data collection methods. It is in this context that 

the panel initiated a Request for Proposal (RFP) and competitively awarded 

two subcontracts, one to Westat (project leader: David Cantor) and the 

second to a consortium from the University of Wisconsin–Milwaukee, 

University of Nebraska–Lincoln, and Abt-SRBI (Nancy Mathiowetz, project leader; Kristen Olson; and Courtney Kennedy). The Statement of Work 

(see Appendix D) required the subcontractors to produce a comprehensive 

proposal for a survey design, and/or other data acquisition process, that 

collects the data required for the primary uses of the current CE while addressing the following issues:

•	 Underreporting of expenditures

•	 Fundamental changes in the social environment for collection of

survey data
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60 MEASURING WHAT WE SPEND

•	 Fundamental changes in the retail environment (e.g., online spending, automatic payments)

•	 The potential availability of large amounts of expenditure data

from a relatively small number of intermediaries such as credit card 

companies

•	 Declining response rates at the unit, wave, and item level

The full reports from Mathiowetz, Olson, and Kennedy (2011b) and 

Westat (2011c) are available online, and the panel summarizes them in 

this chapter. The panel would like to commend both subcontractors on 

the reports they submitted. Both designs were innovative and well thought 

out. The time frame was very short for completing this contract, and both 

groups met the challenge. Their work provided very valuable input into the 

panel’s work from specific design options, use of technology, and review 

of relevant literature. The panel used their research and ideas extensively.

The panel hosted a Redesign Options Workshop on October 26, 2011, 

and an informal roundtable on October 27 to facilitate a public discussion 

of the two proposals and their relative merits in regard to the current CE. 

An agenda for the workshop is in Appendix F. Kulka (2011) discussed both 

reports with a focus on the cognitive issues related to the CE, and Bowie 

(2011) talked about issues relative to implementing major changes in a large 

ongoing survey. Data users also addressed the proposed redesigns from the 

perspective of their use of the CE data.

A number of important insights arose from the discussion of these proposals. One concerned the amount of detail that is required for the CE. A 

strong opinion was offered that one cannot collect that quantity of detail 

without a lot of measurement error. An understanding of what constitutes 

a tolerable measurement error must be clear, followed by a move back to 

collecting data at a more aggregate level for the prescribed level of quality. 

Another important round of discussion concerned the amount of additional 

research that would be needed to be ready to field a newly redesigned CE 

survey. If the redesign includes fairly major changes, as did the two proposals offered at the workshop, then a significant amount of targeted research 

will lie ahead.

Most important, these discussions led BLS senior management to modify their original charge to the panel. In this modified charge (see Appendix 

B), the panel is asked to view the Consumer Expenditure Survey (CE) Data 

Requirements (Henderson et al., 2011) as the mandatory requirements for 

the survey. The CPI data requirements document (Casey, 2010) was no 

longer a part of the mandatory requirements that the redesign would need 

to meet.
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Redesign Proposal: Westat

Westat’s proposed redesign (Westat, 2011b,c) focuses on three interrelated goals: (1) reducing respondent burden, (2) incorporating administrative and personal record information, and (3) improving self-report 

methodology. It calls for greater reliance on records and less reliance on 

respondent recall. Key features of this proposal and a link to the full report 

are provided in Box 4-3. The Westat proposal continues from the base of 

separate diary and interview surveys, but implemented differently than 

in the current CE. It introduces the concept of a “data repository” and a 

separate Administrative Record Survey to obtain certain records directly 

from retailers, utilities, and mortgage companies. The authors discussed 

their deliberations concerning access to external data:

Data obtained directly from retailers are likely to be more accurate than 

respondent-provided data are likely to be. Other federal surveys, such 

as the National Immunization Survey and the Residential Energy Consumption Survey, have employed administrative data to supplement and 

improve the quality of data reported by respondents. Conceivably, CE 

respondents could provide their loyalty card numbers to interviewers, who 

would then ask the retailers to provide the purchasing histories for those 

loyalty cards. This method would not be perfect; a consumer may sometimes forget to give a loyalty card to the cashier or may lend the card to 

friends. Moreover, retailers do not routinely release purchasing histories. 

BOX 4-3

Key Features of the Westat Proposal

•	 Separate diary and interview surveys but implemented differently than the

current CE.

•	 Multiple diary-keepers within a household.

•	 Data repository into which respondents can upload scanned receipts and

records.

•	 Data electronically extracted from receipts and records, and a Web survey

electronically generated to request missing information.

•	 Two recall interview surveys, one year apart. Variable recall periods used.

•	 Respondents contacted three months before recall interview and encouraged

to keep and scan receipts during three-month period.

•	 Consent requested to obtain expenditure records directly from retailers, utilities, and mortgage companies. A separate administrative records survey to 

obtain those records.

NOTE: Link to full report: http://www.bls.gov/cex/redwrkshp_pap_westatrecommend.

pdf and http://www.bls.gov/cex/redwrkshp_app_westatrecommend.pdf.
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62 MEASURING WHAT WE SPEND

The BLS might explore the feasibility of obtaining purchasing history data 

by contacting large retailers with loyalty card programs. Expenditure data 

is also potentially available from utility companies, rental agents, and lenders. (Westat, 2011c, p. xiii)

For the Diary survey, each person age 14 and over in a sampled household would be asked to report expenditure data for 14 days. Having 

multiple respondents minimizes concerns about proxy reporting. The respondents are given a variety of reporting options. They could use the current paper diary forms, mail in their receipts and records, or report data 

electronically. All respondents are asked to save and then supply receipts. A 

key component of the redesigned Diary survey is a “data repository” into 

which respondents upload various types of expense records. The repository 

system would extract purchase data from the uploaded records/receipts 

and generate a Web survey that would ask the respondent to supply any 

remaining information that the CE program needs about those purchases. 

Respondents who chose to report their data electronically would be given 

a portable scanner. Using specially designed software, they would e-mail 

files of their scanned receipts and other records of purchases to the data 

repository.

Respondents would also be asked to download data files from various 

financial accounts and e-mail these files to the data repository. Respondents 

could opt to report their data by mailing in their receipts and financial 

statements, and staff would scan these receipts into the data repository. 

The authors discussed in their report the potential of asking respondents 

to supply financial records:

Consumers today commonly make purchases using modes that leave an 

electronic record. When an electronic record exists, respondents potentially could provide the expenditure data by retrieving information about 

the purchase from a database, or by printing out a record of the purchase, 

rather than by trying to remember the details of the purchase or by finding a receipt. For example, soon after a consumer makes a purchase using 

credit card, debit card, check, electronic fund transfer, or PayPal, a record 

of the transaction appears in a file that can be downloaded from the website of a financial institution. When a consumer makes an online purchase, 

the vendor typically sends a confirmation email, or provides a confirmation 

page, that the consumer can print out. The CE program does not currently 

ask respondents to provide these electronic records of expenditures. Their 

potential role in the CE data collection process deserves attention. These 

records cannot provide all of the data required by the CE program, however. They potentially offer a way to help respondents remember expenditures without a great deal of effort. (Westat, 2011c, p. 5)
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Respondents would also be asked to provide consent to collect their 

purchasing history data directly from retailers. The authors discuss this 

recommendation, saying:

If CE respondents provided their loyalty card numbers, and retailers were 

willing to release purchasing data, the CE program would have access to 

objective information about the respondents’ expenditures. Of course, this 

idea has some drawbacks. Consumers sometimes forget to provide their 

loyalty card to the cashier when they make a purchase. Some consumers 

may lend their loyalty cards to friends. Also, most retailers, including 

Walmart, have no loyalty card programs. (Westat, 2011c, p. 6)

A field representative would monitor the respondent’s reporting activity, increasing contact and assistance to those not reporting regularly. A 

telephone or personal visit to the household would be scheduled after 7 

and 14 days: a telephone interview for those that have been providing the 

information on a regular basis and a personal interview for households that 

have not been providing the information.

For the Interview survey, Westat proposes a change from the current 

data collection schedule. A new panel would enter the CE program each 

quarter, so that four panels would enter each year. The first wave of data 

collection for each panel would begin with a bounding interview, followed 

three months later by a recall interview. The second wave of data collection 

would start nine months after the recall interview. Westat (2011c, p. 53) 

indicated that this change is made to reduce both cost and burden: “The 

current design has a total of five in-person interviews per household, creating significant cost and respondent burden. Reducing this number to three 

in-person interviews would substantially reduce this burden and may lead 

to greater cooperation, fewer dropouts, and better data quality.”

At the start of the second wave, the household would receive a package 

via U.S. mail reminding them to resume data collection activities, including keeping receipts. If the household has changed, it would receive a personal visit. Data collection would end with a recall interview three months 

later. Westat also proposes a change to the recall period, so that it varies 

by expense item (one-, three-, or 12-month recall). The proposal places a 

very strong emphasis on having households save receipts and use records. 

Respondents would also be asked to provide consent for collecting their expenditure history data directly from retailers, utilities, and mortgage companies. Respondents would be encouraged to scan receipts and records into 

the data repository as they receive them, rather than waiting for the field 

representative’s return interview. As with the Diary survey, the repository 

would generate a Web survey based on the information still needed about 

the receipt/record. The field representative would monitor the number of 
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64 MEASURING WHAT WE SPEND

records/receipts coming in during the three-month period and contact by 

telephone households that were not turning in receipts regularly.

The redesign also includes a separate Administrative Record Survey 

that would be developed to obtain records directly from retailers, utilities, 

and mortgage companies. The emphasis on obtaining data from records 

rather than the respondent’s memory is intended to improve data quality 

and reduce respondent burden.

Westat estimated that the proposed diary redesign would cost approximately 60 percent more than the current diary survey. This increase in 

cost is primarily attributable to having multiple diary-keepers within each 

household. Without a budget increase, the number of sampled households 

would have to be reduced accordingly, and the precision of the estimates 

would therefore also diminish. Westat estimates that the proposed interview redesign would cost approximately twice that of the current interview 

survey. The increase is attributable to the increased effort in contacting 

more households, an effect of reducing the number of panels. The new 

Administrative Record Survey contributes to cost increases reported for 

both surveys. The redesigned methods for the interview survey result in 

some increase in precision of the estimates, due to eliminating the withinhousehold correlation across panel waves within the same year. This offset 

does not entirely make up for the increase in cost. The report provides a 

simulation of the effect on the precision of the estimates using one-, threeand 12-month reference periods (Westat, 2011c).

Redesign Proposal: Mathiowetz, Olson, and Kennedy

The Mathiowetz/Olson/Kennedy proposal (Mathiowetz, Olson, and 

Kennedy, 2011a,b) recommends a single integrated sample design, with 

two components: (1) a cross-sectional one-month diary, and (2) a panel 

component for which a household would complete the one-month diary for 

three different waves within the year. The proposed design makes extensive 

use of tablet computers, receipt scanners, and flexible memory “triggers.” 

Box 4-4 provides key elements of this proposal and a link to the full report. 

The design provides for active monitoring of the diary-keeping activities of 

household members, with interventions when this activity appears inadequate. Their design minimizes the reliance on retrospective recall, eliminates the need to combine data from two distinct surveys, and provides an 

important panel component within the data structure.

In discussing the advantages to their proposed design, the authors 

stated

Our design addresses the issue of underreporting by minimizing reliance 

on retrospective reporting, promoting “real time” recording of all ex-
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

THE PANEL’S INVESTIGATION INTO THE ISSUES WITH THE CE 65

penditures and payments, and emphasizing self reporting among all CU 

members. The use of a web-based diary, via web-enabled tablets, provides 

an efficient means by which each member of the CU can log on to his or 

her own personal diary to record expenditures. The flexibility and computing power of a tablet will allow CE staff to develop an instrument that 

minimizes burden (e.g., pick lists; scanning of receipts and barcodes; ease 

of selecting repeat purchase items) and facilitates consistency in reporting 

at the level of detail necessary for the CPI. We envision a data collection 

approach with the tablet that allows for the use of apps, integration with 

other technology, online help for the CU members, and real time monitoring of diary entries by the CU. (Mathiowetz, Olson, Kennedy, 2011b, 

p. 11)

Each adult (age 16 and older) member of the selected household would 

be asked to keep a 30-day diary, reporting expenditures “real-time” during that period. Younger children (aged 7–15) would be asked to keep a 

“mini diary” for that same time period. During an initial personal visit to 

the selected household, the field representative would collect demographic 

and socioeconomic data, including asking some global questions related 

to certain expenditures and annual income. The field representative would 

probe about regular monthly payments for housing and utilities, and any 

automatic payment schedules. The 30-day diary process would be explained 

with appropriate training on use of the diary tools. The authors provide 

their rationale for multiple diary-keepers within the household.

With respect to multiple reporters per CU, the limited literature suggests 

that the use of multiple diaries per CU increases the reporting of expenditure items and CU expenditures (Grootaert 1986; Edgar et al. 2006). 

BOX 4-4

Key Features of the Mathiowetz/Olson/Kennedy Proposal

	 •	 Diary only

	 •	 Cross-sectional sample households keep diary for one month. Panel component keeps one-month diary three times during the year.

	 •	 Multiple diary-keepers within the household

	 •	 Use of tablet PCs with Internet connection to permit real time uploading of

data

	 •	 Ongoing monitoring of uploaded data with feedback to household

	 •	 Use of memory triggers encouraged

NOTE: Link to full report: http://www.bls.gov/cex/redwrkshp_pap_abtsrbirecommend.

pdf.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

66 MEASURING WHAT WE SPEND

If the source of the increasing discrepancy between CE and the Personal 

Consumption Expenditure data from the National Accounts is due to measurement error, then increasing self reports and minimizing recall periods 

are two well established means for improving data quality (Bound, Brown 

and Mathiowetz 2001). Furthermore, the use of technology, in which each 

member of the CU can log in to his or her individual diary with their own 

login and password, permits persons who make purchases that they would 

rather not have other members know about to answer confidentially (e.g., 

teenagers not wanting their parents to know about certain purchases), 

more so than if a paper diary is used (e.g., Stinson, To and Davis 2003). 

(Mathiowetz, Olson, and Kennedy, 2011b, p. 11)

During the 30-day diary period, household members would be asked 

to keep receipts and record expenditures on a real-time basis using one 

or more of the diary tools provided, with a computer tablet with Internet 

connection as the primary recording tool. The tablet would be available for 

use by all household members. It would feature an instrument that minimizes burden and facilitates consistency in reporting of required details. 

An attached scanner and bar code reader would facilitate data capture of 

products and receipts. The proposal also recommends the use of a personalized e-mail account to forward receipts and electronic records. The field 

representative would conduct a “wrap-up” interview and data review at the 

end of the diary period, with retrospective questions asked as needed to fill 

gaps in the diary-keeping.

Mathiowetz/Olson/Kennedy encourage the adoption of multiple portable means of capturing triggers that help household members remember 

a purchase so that it can be recorded later. These include the respondent’s 

own smart phone to record pictures, voice recordings, and notes. A small, 

simple pocket diary could also be used as a memory trigger.

A panel component of the design is recommended to better support 

micro-level analysis for the entire year. It is formed by a subset of the overall 

sample that is asked to complete a 30-day diary for months 1, 7, and 13. 

The authors deliberated on the best length for the diary reporting interval 

and the panel, stating that:

A critical design issue is the length of the panel—that is, for how many 

weeks or months we ask CU respondents to serve as diarists. This is definitely an issue of cost-error tradeoffs, one that impacts the costs of data 

collection, the willingness to participate, the extent to which the data are 

impacted by panel conditioning/fall-off in reporting, and the need for 

month-to-month and/or year-to-year comparisons among the same CUs. 

No single design can optimize for all of these objectives, which is why we 

are recommending both a cross sectional and a panel component to the 

single integrated sample approach. (Mathiowetz, Olson, and Kennedy, 

2011b, p. 15)
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

THE PANEL’S INVESTIGATION INTO THE ISSUES WITH THE CE 67

This proposal recommends that BLS continue to look at sources of 

administrative data for benchmarking and microlevel use. Mathiowetz/

Olson/Kennedy discuss a number of existing data sources, including three 

federal surveys that might be used to benchmark CE data. The authors 

also discuss nonfederal sources of data but do not incorporate a specific 

recommendation for their use into the current proposal. They state that 

they “were initially optimistic about micro-level integration of non-federal 

administrative data sources with CE data. However, the current state of 

knowledge about these 16 sources and the incredible task involved in turning administrative records from private companies into survey data for all 

sampled persons makes us cautious in recommending their use for purposes 

other than nonresponse monitoring and benchmarks” (Mathiowetz, Olson, 

and Kennedy, 2011b, p. 16).

Summary of the Two Proposals

While the panel does not recommend implementing either of these 

two designs wholesale, the designs embody important insights that became 

central to its deliberations, and aspects of each design are incorporated 

into one or all of the panel’s three proposed designs presented in Chapter 

6. Both proposals place renewed emphasis on the use of survey personnel 

to provide help, consultation, and monitoring of respondents’ efforts, and 

the panel’s thinking was clearly inspired by this model.

The most notable adoption from the Mathiowetz/Olson/Kennedy proposal is a focus on supported self-administration and the use of a tablet 

data collection interface. These concepts are a central feature in all three 

of the panel’s prototypes described in Chapter 6. One prototype, Design 

A, Detailed Expenditures Through Self-Administration, follows much of 

the Mathiowetz/Olson/Kennedy proposal, as does the diary component of 

Design C, Dividing Tasks Among Multiple Integrated Samples. The panel’s 

proposed designs were inspired, in different ways, by the Westat proposal’s 

strong focus on encouraging the use of records. Design C, Dividing Tasks 

Among Multiple Integrated Samples follows the Westat design that encourages respondents to keep receipts and record expenditures throughout the 

quarter prior to a visit by the field representative. The Westat data repository proposal was viewed as desirable in the future but less practical in the 

nearer term.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

5

Why Redesign the CE?

Today, all household surveys, including the Consumer Expenditure 

Surveys (CE), face well-known challenges. These challenges include 

maintaining adequate response from increasingly busy and reluctant 

respondents. In addition, more and more households are non-English speaking, and a growing number of higher-income households have controlledaccess residences. Call screening and cell-phone-only households have made 

telephone contacts on surveys more difficult. Today’s household surveys 

face confidentiality and privacy concerns, a public growing more suspicious 

of its government, and competition from an increasing number of private as 

well as government surveys vying for the public’s attention (Groves, 2006; 

Groves and Couper, 1998).

In the midst of these challenges for household surveys, the CE surveys 

stand out as particularly long and arduous. In the Interview survey, recall of 

many types of expenditures is likely to be imperfect. A typical respondent 

lacks records or at least the motivation to use them in answering the CE 

questions. The level of detail that is required in describing each purchase is 

daunting. In the Diary survey, respondents are asked to record the details of 

many small purchases in a complicated booklet. These demands can easily 

result in limited compliance and the omission of expenditures.

Further exacerbating the problem, the CE faces the additional challenge 

that consumer spending has changed dramatically over the past 30 years, 

and it continues to change (Fox and Sethuraman, 2006; Kaufman, 2007; 

Sampson, 2008). When the CE was designed in the 1970s, there was no 

online shopping or options for electronic banking and bill paying. Over that 

68
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 69

time, shopping patterns have shifted from individual purchases at a variety 

of neighborhood stores to collective purchasing at “big box” stores such as 

Walmart, Target, and Costco that sell everything from meat to shirts, furniture, and motor oil under one roof. The CE surveys are cognitively designed 

to collect spending information based on the 1970s world of purchasing 

behaviors, and today’s consumers are unlikely to relate to that.

Underreporting of expenditures is a long-standing problem with the CE 

as evidenced by a growing deviation from other data sources and by the results of several studies. This underreporting appears to differ sharply across 

commodities, raising the possibility of differential biases in the Consumer 

Price Index (CPI) and the picture of the composition of household spending. 

This is the biggest concern with the CE program. The Panel on Redesigning 

the BLS Consumer Expenditure Surveys believes that there are a number 

of issues with the current design and implementation of the CE, and that 

collectively these problems lead to the underreporting of expenditures. This 

chapter documents this underreporting and then discusses the issues and 

concerns that the panel identified in its study of the CE.

With that said, the panel understands that no survey is perfect. In fact 

all surveys are compromises between the need for specific data, the quality 

with which those data can be collected, and the burden and costs required 

to do so. The CE is no exception. It is the panel’s expectation that by examining the issues with the current CE along with some alternative designs, 

a new and better balance can be found between data requirements, data 

quality, and burden.

EVIDENCE OF UNDERREPORTING IN THE CE

In many federal surveys, one can assess the quality of data by comparisons with other sources of information. One of the difficulties in evaluating 

the quality of CE data is that there is no “gold standard” with which to 

compare the estimates. However, several sources provide insight into data 

quality. The National Research Council, in its review of the conceptual and 

statistical issues with the CPI, expressed concern about potential bias in the 

expenditure estimates from the CE. That report recommended comparison 

of the CE estimates with those from the Bureau of Economic Analysis’s 

Personal Consumption Expenditures (PCE):

The panel’s foremost concern is with the extent of bias in the CEX [Consumer Expenditure Surveys] which, in turn affects the accuracy of CPI 

expenditure category budget shares. A starting point for evaluating household expenditure allocations estimated by the CEX is to compare them 

against budget shares generated by other sources. The Bureau of Economic 

Analysis (BEA) produces the most obvious alternative, the per-capita and 

product accounts (NIPA). (National Research Council, 2002, p. 253)
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

70 MEASURING WHAT WE SPEND

Comparisons Between the CE and PCE

Compatibility

A long literature has focused on the discrepancy between the CE and PCE 

data from the National Income and Product Accounts (NIPA) (Attanasio, 

Battistin, and Leicester, 2006; Branch, 1994; Garner, McClelland, and 

Passero, 2009; Garner et al., 2006; Gieseman, 1987; Meyer and Sullivan, 

2011; Slesnick, 1992). However, in comparing the CE to the PCE data, it 

is important to recognize conceptual incompatibilities between these data 

sources. Slesnick (1992, p. 22), when comparing CE and PCE data from 

1960 through 1989, concluded that “approximately one-half of the difference between aggregate expenditures reported in the CEX [CE] surveys and 

the NIPA can be accounted for through definitional differences.” Similarly, 

the General Accounting Office (1996, p. 15), now the U.S. Government 

Accountability Office, in a summary of a Bureau of Economic Analysis 

comparison of the differences in 1992, reported that “more than half was 

traceable to definitional differences.”

Thus, a key conceptual difference between the CE and PCE is “what is 

measured.” The CE measures out-of-pocket spending by households, while 

the PCE definition is wider, including purchases made on behalf of households by institutions. The CE is not intended to capture purchases by households abroad such as those on military bases, whereas the PCE includes these 

purchases. These differences are important and growing over time. Imputations including those for owner-occupied housing and financial services, 

but excluding purchases by nonprofit institutions serving households and 

employer contributions for group health insurance, now account for over 

10 percent of the PCE. In-kind social benefits account for nearly another 10 

percent. Employer contributions for group health insurance and workers’ 

compensation account for over 6 percent, while life insurance and pension 

fund expenses and final consumption expenditures of nonprofits represent 

almost 4 percent. McCully (2011) reported that in 2009 nearly 30 percent of 

the PCE was out-of-scope for the CE, up from just over 7 percent in 1959.

Another important conceptual difference between the CE and PCE 

is the underlying data and how the estimates are constructed. Chapter 3 

of this report describes the CE surveys in some detail. In comparison, the 

PCE aggregates come from data on the production of goods and services, 

rather than consumption or expenditures by households. The PCE depends 

on multiple sources, primarily from business records reported on the economic censuses and other Census Bureau surveys. The PCE numbers are 

the product of substantial estimation and imputation processes that have 

their own error profiles. Estimates from these business surveys are adjusted 

using input-output tables to add imports and subtract sales that do not go 
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 71

to domestic households. These totals are then balanced to control totals for 

income earned, retail sales, and other benchmark data (Bureau of Economic 

Analysis, 2010, 2011a,b).

One indicator of the potential error in the PCE is the magnitude of 

the revisions that are made from time to time (Gieseman, 1987; Slesnick, 

1992). A recent example is the 2009 PCE revisions, which substantially 

revised past estimates of several categories. Food at home, one of the largest 

categories, decreased by over 5 percent after the 2009 revision.1

Some authors have argued that despite the incompatibilities between 

the CE and PCE, the differences between the series should be expected to 

be relatively constant (Attanasio et al., 2006). While a plausible conclusion, 

a gradual widening of the difference between the sources could still be expected given their growing incompatibility, as reported in McCully (2011) 

and Moran and McCully (2001).

Comparisons

Gieseman (1987) conducted one of the first evaluations of the current CE, comparing the CE to the PCE for 1980–1984.2 He found that 

the CE reports were close to the PCE for rent, fuel and utilities, telephone 

services, furniture, transportation, and personal care services. On the other 

hand, substantially lower reporting in the CE for food, household furnishings, alcohol, tobacco, clothing, and entertainment was apparent back in 

1980–1984.

The current patterns have strong similarities to those from 30 years 

ago. Garner et al. (2006) reported a long historical series of comparisons 

for the integrated data that begins in 1984 and goes up through 2002. Some 

categories compare well. Rent, utilities, and fuels and related items are 

reported at high and stable levels relative to the PCE. Telephone services, 

vehicle purchases, and gasoline and motor oil are reported at high levels 

(compared to the PCE) but have declined somewhat over time. Food at 

home relative to the PCE is about 0.70, but has remained stable over time. 

The many remaining categories of expenditures are reported at low levels 

relative to the PCE, though some small categories such as footwear and 

vehicle rentals show relative increases.

1The 2008 value for food at home was $741,189 (in millions of dollars) prior to revision 

and $669,441 after, but the new definition excludes pet food. A comparable pre-revision 

number excluding pet food is $707,553. The drop from $707,553 to $669,441 is 5.4 percent. 

Appreciation is given to Clinton McCully (BEA) for clarifying this revision.

2Comparisons of consumer expenditure survey data to national income account data go 

back at least to Houthakker and Taylor (1970). The issues were also addressed in a long series 

of articles comparing the CPI to the PCE deflators by Bunn and Triplett (1983) and Triplett 

and Merchant (1973).
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

72 MEASURING WHAT WE SPEND

Garner et al. (2006) ultimately argued that this comparison should 

focus on expenditure categories whose definitions are the most comparable 

between the CE and PCE, noting “a more detailed description of the categories of items from the CE and the PCE is utilized than was used when 

the historical comparison methodology was developed. Consequently, more 

comparable product categories are constructed and are included in the 

final aggregates and ratios used in the new comparison of the two sets of 

estimates” (Garner et al., 2006, p. 22). The new series provides comparisons every five years from 1992 to 2002 (Garner et al., 2006), and were 

updated and extended annually through 2007 in Garner, McClelland, and 

Passero (2009).

When using comparable categories and when the PCE aggregates are 

adjusted to reflect differences in population coverage between the two 

sources, the ratio of total expenditures on the CE to PCE is fairly high but 

still decreases over time. The ratio for 1992 and 1997 was 0.88, while in 

2002 it was 0.84 and by 2007 had fallen to 0.81 (Garner, McClelland, 

and Passero, 2009). Figure 5-1 shows the time pattern for the ratio of CE 

to PCE spending for comparable categories over 2003–2009. The above 

discussion highlights that it is easy to overstate the discrepancy between 

the CE and the PCE by comparing all categories, rather than restricting 

the comparison to categories with comparable definitions (Passero, 2011).

Separate Comparison of the Interview Survey Estimates 

and the Diary Survey Estimates with the PCE

It is also important to look at comparability with the PCE of estimates 

from the Interview survey and Diary survey separately. Gieseman (1987) 

reported separate comparisons of the Interview survey and Diary survey 

estimates to PCE estimates for food because these were the only estimates 

available from both surveys.3 He found that Interview food at home exceeded Diary food at home by 10 to 20 percentage points, but was still 

below the PCE. For what was then a much smaller category, food away 

from home, the Diary aggregate exceeded the Interview aggregate by about 

20 percentage points. Again, the CE numbers were considerably lower than 

the PCE ones.

It is not surprising that the Interview and Diary surveys yield different 

estimates, given the different approaches to data collection, including a 

3In these early years, BLS published separate tables for Interview and Diary data. In recent 

years, tables have been published with only integrated data. Consequently, subsequent comparisons of CE to PCE almost exclusively rely on the integrated data that combine Interview 

survey and Diary survey data. In cases where the expenditure category is available in both 

surveys, the BLS selects the source for the integrated data that is viewed as most reliable. See 

Creech and Steinberg (2011) and Steinberg et al. (2010).
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 73

Fig5-1.eps

0.5

0.6

0.7

0.8

0.9

1

2003 2004 2005 2006 2007 2008 2009

CE to PCE Ratio

Total

Durables

Nondurables

Services

Year

FIGURE 5-1 Coverage of comparable spending between the CE and PCE.

NOTE: CE = Consumer Expenditure Surveys, PCE = Personal Consumption 

Expenditures. 

SOURCE: Passero (2011).

different form of interaction with the respondent household. These differences provide the likelihood of differences in estimates between the two 

surveys as currently configured, as discussed in more detail later in this 

chapter.

Bee, Meyer, and Sullivan (2012) looked further at comparing the estimates from both surveys separately to the PCE. The authors examined 

estimates for 46 expenditure categories for the period 1986–2010 that are 

comparable to the PCE for one or both of the CE surveys. Table 5-1 shows 

the 10 largest expenditure categories for which these separate comparisons 

can be made, showing ratios of the CE to PCE for these categories. Among 

these categories, six (imputed rent on owner-occupied nonfarm housing, 

rent and utilities, food at home, gasoline and other energy goods, communication, and new motor vehicles) are reported on the CE Interview survey at 

a high rate (relative to the PCE) and have been roughly constant over time. 

These six are all among the eight overall largest expenditure categories. 

In 2010, the ratio of CE to PCE exceeded 0.94 for imputed rent, rent and 

utilities, and new motor vehicles. It exceeded 0.80 for food at home and 

communication and is just below this number for gasoline and other energy 

goods. In contrast, no large category of expenditures was reported at a high 

rate (relative to the PCE) in the Diary survey that was also higher than the 

equivalent rate calculated from the Interview survey. Reporting of rent and 

utilities is about 15 percentage points higher in the Interview survey than 

the Diary survey. Food at home is about 20 percentage points higher in the 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

74 MEASURING WHAT WE SPEND

TABLE 5-1 CE/PCE Comparisons for the 10 Largest Comparable 

Categories, 2010

PCE Category

PCE

($ millions)

Ratios

Diary to PCE Interview to PCE

Imputed rental of owner-occupied nonfarm 

housing

1,203,053 1.065

Rent and utilities 668,759 0.797 0.946

Food at home 659,382 0.656 0.862

Food away from home 545,579 0.519 0.506

Gasoline and other energy goods 354,117 0.725 0.779

Clothing 256,672 0.487 0.317

Communication 223,385 0.686 0.800

New motor vehicles 178,464 0.961

Furniture and furnishings 140,960 0.433 0.439

Alcoholic beverages purchased for offpremises consumption106,649 0.253 0.220

NOTE: CE = Consumer Expenditure Surveys, PCE = Personal Consumption Expenditures. 

SOURCE: Bee, Meyer, and Sullivan (2012).

Interview survey.4 Gasoline and other energy goods are about 5 percentage 

points higher in the Interview survey and communication is about 10 percentage points higher. The 2010 ratios for food away from home and furniture and furnishings are close to a half for both the Interview and Diary 

surveys. For clothing and alcohol, the Diary survey ratios are below 0.50, 

but the Interview survey ratios are even below those for the Diary survey.

The panel next looked at smaller expenditure categories that are comparable between the PCE and the CE. Of the 36 such categories, only six 

in the Interview and five in the Diary have a ratio of at least 0.80 in 2010. 

In the Diary survey household cleaning products and cable and satellite 

television and radio services were reported with a high rate (comparable 

to the PCE). Household cleaning products had a ratio (relative to the PCE) 

of 1.15 in 2010 in the Diary survey; the ratio has not declined appreciably 

in the past 20 years. The largest of these categories reported with a high 

rate (comparable to the PCE) in the Interview survey were motor vehicle 

accessories and parts, household maintenance, and cable and satellite television and radio services. The remaining categories were reported at low 

4There is some disagreement about how to interpret the fact that food at home from the 

CE Interview survey compares more favorably to PCE numbers than does food at home from 

the CE Diary survey. Some have argued that the CE Interview survey numbers may include 

nonfood items purchased at a grocery store. Battistin (2003) argued that the higher reporting 

of food at home for the recall questions in the Interview component is due to overreporting, 

but Browning, Crossley, and Weber (2003) stated that this is an open question.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 75

rates (compared to the PCE) in both surveys with ratios below one-half. 

These include glassware, tableware, and household utensils and sporting 

equipment. Gambling and alcohol had especially low ratios, below 0.20 

and 0.33, respectively, in both surveys in most years.

Summary of Comparisons with the PCE

The overall pattern indicates that the estimates for larger items from 

the CE are closer to their comparable estimates from the PCE. The current 

Interview survey estimates these larger items more closely to the PCE than 

does the current Diary survey. For the 36 smaller categories, neither the 

Interview survey nor the Diary survey consistently produces estimates that 

have a high ratio compared to the PCE. The categories of expenditures 

that had a low rate (compared to the PCE) tended to be those that involve 

many small and irregular purchases, categories of goods for specific family 

members (clothing), and categories for which individuals might want to 

underestimate purchases (alcohol, tobacco). Large salient purchases (like 

automobiles), and regular purchases (like rent and utilities) for which the 

Interview survey was originally designed, seem to be well reported. These 

patterns have been largely evident since the 1980s or even earlier. However, 

over the past three decades, there has been a slow decline in the level of 

reporting of many of the mostly smaller categories of expenditures in both 

the Interview survey and the Diary survey.

Similar results are reported from Canada. Statistics Canada’s consumption survey was redesigned with both a recall survey and diary, with 

partial implementation in 2009. The level of expenditures from the diary 

was found to be 14 percent less than the recall interview for less frequent 

expenses and 9 percent less for frequent expenditures. Incomplete diaries 

contributed to the underestimation, given that 20 percent of diary days 

were “nonresponded” days (Dubreuil et al., 2011).

The panel reiterates that there are many differences between the CE and 

the PCE, and it does not consider the PCE to be truth. Nevertheless, the most 

extensive benchmarking of the CE is to the PCE, so these results are informative. Furthermore, when separate comparisons of the Interview survey and 

the Diary survey to the PCE are available, the comparisons provide an indication of the possible degree of relative underreporting in the two surveys.

Comparisons Between the CE and Other Sources

There have been comparisons of the CE to a number of other sources. 

Most are summarized on the BLS Comparisons Web page.5 These compari5See http://www.bls.gov/cex/cecomparison.htm.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

76 MEASURING WHAT WE SPEND

sons include, but are not limited to: utilities compared to the Residential 

Energy Consumption Survey (RECS); food at home compared to trade publications Supermarket Business and Progressive Grocer; and health expenditures compared to the National Health Expenditure Accounts (NHEA) 

and the Medical Expenditure Panel Survey (MEPS). Some of the findings 

are presented below.

The CE’s estimates for utilities are compared to those generated by the 

RECS. The populations of households from these two surveys are not identical, but fairly consistent. The RECS collects most information on utilities 

directly from utility companies after obtaining permission from the sampled 

households. Between 2001 and 2005, the CE estimates of total expenditures 

for residential energy were between 7 and 9 percent higher than from the 

RECS. When the energy source was broken down, the CE was higher for 

electricity and natural gas, while lower for the smaller category of fuel oil 

and LP gas.

In 2007, the CE’s estimate for total health expenditures was 67 percent 

of the total out-of-pocket health expenditures estimated from the NHEA. 

The NHEA is based on a broader population definition than is the CE, and 

the differences between its estimates and the CE may be affected by the 

population differences plus the concepts, context, and scope of data collection. When compared to the MEPS, the CE estimates were lower for total 

health expenditures, with comparison ratios similar as those of the NHEA.

Comparisons were made between total food at home from the CE with 

grocery trade association data from Supermarket Business and Progressive 

Grocer. During the 1990s, the CE estimate was consistently between 10 

percent and 20 percent higher than the trade association data.

Summary of Comparisons with Other Sources

The panel was not charged with evaluating the error structure of the 

PCE or other relevant sources of administrative data. However, the above 

analysis provides important background for making decisions about the 

CE redesign. It indicates that the concerns about underreporting of expenditures in both the CE Diary and CE Interview surveys are warranted. For 

many uses of the CE, any underreporting is problematic. However, for the 

use in calculating CPI budget shares, the differential underreporting that is 

strongly indicated by these results, and discussed in more detail on p. 105 

of Chapter 5, “Disproportionate Nonresponse,” is especially problematic. 

In principle, an attentive, motivated respondent could report a particular 

expenditure—a pound of tomatoes for a certain price—concurrently with 

better accuracy than in a recall survey. This potential is not evident from 

the estimates of aggregate spending obtained from the current designs of 

the CE Interview and Diary surveys. The above analysis indicates that there 
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WHY REDESIGN THE CE? 77

are issues with both the CE Diary and CE Interview surveys, leading to the 

need for them to be assessed and redesigned. As a result, the panel reached 

this conclusion:

Conclusion 5-1: Underreporting of expenditures is a major quality 

problem with the current CE, both for the Diary survey and the Interview survey. Small and irregular purchases, categories of goods for 

specific family members, and items that may be considered socially 

undesirable (alcohol and tobacco) appear to suffer from a greater percentage of underreporting than do larger and more regular purchases. 

The Interview survey, originally designed for these larger categories, 

appears to suffer less from underreporting than does the Diary survey 

in the current design of these surveys.

MEASUREMENT DIFFERENCES BETWEEN 

THE INTERVIEW AND DIARY

Before examining potential sources of response errors in the Interview 

survey and Diary survey separately, this section considers whether these two 

independent surveys, as currently designed, are inherently comparable in 

the information that each collects. In the section above, the panel raised its 

concern about basic comparability of expenditure categories when comparing to the PCE. Here, the report explores another aspect of comparability.

It is important to remember the purposes for which the two surveys 

were originally designed. The Diary was designed to gather information 

on the myriad of frequent, small purchases made on a daily basis. These 

items include food for home consumption and other grocery items such as 

household cleaning and paper products. The Diary also is the source of 

expenditures for some clothing purchases, small appliances, and relatively 

inexpensive household furnishings, as well as the source of estimates on 

food away from home. The Interview, on the other hand, was designed to 

produce estimates for regular monthly expenditures like rent and utilities. 

It was designed to capture major expenditures, including those for large appliances, vehicles, major auto repair, furniture, and more expensive clothing 

items. Given the very different purposes of the two surveys, it is not surprising that they have entirely different designs and, hence, different problems.

Differences in Questions, Context, and Mode

A broad base of literature in survey research has identified many factors 

that can independently affect the accuracy of answers to survey questions. 

Some of the most important include the following:
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78 MEASURING WHAT WE SPEND

•	 Different question wording is likely to produce different responses

(Groves et al., 2004).

•	 The context in which questions are asked—for example, the purpose of the survey as it is explained to the respondent and the 

order in which questions are asked—influences what respondents 

will report (Tourangeau and Smith, 1996; Tourangeau, Rips, and 

Rasinski, 2000).

•	 Survey mode influences answers. For example, the literature demonstrates that in-person interviews are more likely to produce socially desirable answers that put the respondent in a more favorable 

light (Dillman, Smyth, and Christian, 2009).

•	 For self-administered diaries, the visual layout and design can have

a dramatic effect on respondent answers (Christian and Dillman, 

2004; Tourangeau, Couper, and Conrad, 2007).

These influences are realized as respondents go through the wellestablished cognitive process of comprehending the question and concluding what they are being requested to do, retrieving relevant information

for formulating an answer, deciding which information is appropriate and 

adequate, and reporting. It is well documented that errors may occur at 

each of these stages (Tourangeau, Rips, and Rasinski, 2000).

As noted earlier, Bee, Meyer, and Sullivan (2012) found that the level 

of reported expenditures for certain purchases are consistently different in 

the Interview survey and the Diary survey. Although the Interview survey 

generally yields larger expenditures, these differences are not consistently 

in the same direction. For example, food purchased away from home, payments for clothing and shoes, and purchases for alcoholic beverages are 

greater from the Diary. Expenditures for rent and utilities, food at home, 

and gasoline and other energy goods are larger from the Interview. Some 

argue that larger is simply more accurate, but that may not be the case. The 

panel has not said that either approach or type of question is inherently 

better or worse. However, it is appropriate to illuminate these differences 

more closely.

 Different questions are asked in the Interview and the Diary surveys, 

and these different questions are also asked in different survey contexts. 

To illustrate this, consider the category of food and drink at home to see 

how each survey collects this information. This is one of the categories for 

which the Diary was designed.

The Interview survey asks the following questions:

•	 What has been your or your household usual WEEKLY expense

for grocery shopping? (Include grocery home-delivery service fees 

and drinking water delivery fees.)
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WHY REDESIGN THE CE? 79

•	 About how much of this amount was for nonfood items, such as

paper products, detergents, home cleaning supplies, pet foods, and 

alcoholic beverages?

•	 Other than your regular grocery shopping already reported, have

you or any members of your household purchased any food or nonalcoholic beverages from places such as grocery stores, convenience 

stores, specialty stores, home delivery, or farmer’s markets? What 

was your usual WEEKLY expense at these places?

•	 What has been your or your household’s usually MONTHLY expense for alcohol, including beer and wine to be served at home?

Thus, the Interview survey asks the respondent to estimate “usual” weekly 

expenditure (at grocery stores and home delivery) and to estimate a second 

“weekly” amount for nonfood items that is included in the first estimate. 

The respondent is then asked to estimate a third “weekly” expenditure 

for food at home purchased at all other places apart from grocery stores. 

Finally, the respondent is asked to make a fourth estimate, this time for 

the “monthly” purchase of alcoholic beverages consumed at home. In the 

Interview survey, the questionnaire does not use the term “food or drink 

for home consumption” but instead talks about “weekly grocery shopping” 

with no mention of home consumption.

In contrast, the Diary is introduced to the respondent as wanting specific expenses as the respondent makes them. Thus, the respondent is asked 

to individually record each purchase that fits under the category of food and 

drinks for home consumption. The emphasis here is on specific products 

and their detailed characteristics, and whether it is purchased for someone 

not “on your list.” Alcohol is to be included, but the cost for alcohol is also 

recorded separately. The respondent is not asked to estimate any “weekly” 

or “monthly” amounts.

In addition, certain of these expenditures may be viewed as socially 

undesirable (e.g., alcohol use). An extensive literature has shown that questions about socially undesirable behaviors tend to be underreported in the 

presence of an interviewer and that more accurate data may be obtained 

in self-administered modes (Kreuter et al., 2011; Tourangeau and Smith, 

1996).

Obviously, not all questions about expenditures in the CE are about 

socially undesirable behaviors, although questions of finance (in particular 

income) tend to be seen as sensitive by U.S. respondents. However, the presence or absence of an interviewer is another clear difference between the Diary and Interview collections. It is unclear what percentage of CE questions 

is likely to benefit from self-administration, as opposed to benefiting from 

having an interviewer available to clarify confusing concepts and provide 

motivation. The designs proposed in Chapter 6 attempt to address the un-
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80 MEASURING WHAT WE SPEND

resolved questions about the benefits of interviewer- and self-administration 

in different ways. Ultimately, the panel agrees that more research will be 

needed to fully determine when and for which respondents it will be possible to gain the benefits of increased disclosure in self-administration while 

also gaining the benefits of interviewer support.

In sum, the CE Interview and Diary present quite different questions 

and settings so that different answers are to be expected. The Diary uses 

an itemization process as expenditures are occurring (using instructions 

that may or may not be understood). In the example of food at home, 

the Interview survey uses a “global question” quick-response format that 

involves addition and subtraction of items to form totals. The Interview 

survey includes an interviewer whose presence may act as a cheerleader or 

motivator, but in some cases may reduce disclosure of sensitive information 

or in some ways license the inference that estimation and satisficing6 are 

sufficient in order to maintain the speed of the interview. It is not surprising that different amounts are reported in the Interview and Diary in this 

situation, and that these differences are not always in the same direction.

Error Structure

It was beyond the resources of the panel to examine fully the error 

structure of the current Interview and Diary surveys. However, as the panel 

went through the process of considering design alternatives for the CE, 

there was considerable discussion about the error structure of the current 

surveys.

One issue of discussion was whether the different collection modes in 

the CE were more or less likely to produce an asymmetric error structure, 

and if such were the case, whether that type of structure could contribute 

to the differential underreporting observed between the Interview and Diary 

surveys. A collection process with a pronounced asymmetric error structure 

might be more likely to create an observable bias in the estimates.

The current Diary survey asks the diary-keeper to enter expenditures 

concurrently using records or short-term recall. Errors of omission—

forgetting to record a purchase—are the types of errors most likely to occur. 

If the diary-keeper does not enter expense items on a daily basis but waits 

until the end of the recording period, there are likely to be more expense 

items left off of the diary form (more errors of omission). It is possible that 

the diary-keeper may recall that a purchase was made but then over- or underestimate the amount spent. This latter type of recall error might be more 

6In this context, “satisficing” is responding to a survey question with an answer that is 

“good enough” to move forward to the next question, without necessarily being an accurate 

or complete response.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 81

symmetrical in its structure. In general, most panel members concluded that 

the current Diary survey had an error structure with asymmetrical properties. This led the panel to look at ways to minimize errors of omission.

The current Interview survey collects expenses retrospectively over a 

three-month period. The respondent is asked to use records to report expenses, but in reality the survey depends heavily on the respondent’s recall 

of making specific purchases over a three-month period. In this scenario, 

errors of omission—failure to recall a purchase or other expense—are 

likely to be a common type of error. As discussed above, this type of error 

is likely to have an asymmetrical structure. However, this problem may be 

less prevalent if respondents estimate expenditures during the recall period 

rather than trying to reconstruct all purchases as discussed below. Another 

common type of error is when the respondent recalls that a purchase was 

made, but he or she has trouble recalling the exact amount of the purchase. 

This type of error may have a more symmetrical structure if a respondent 

is as likely to over- or underestimate the amount. Moreover, the current Interview survey uses a bounding interview as its first wave. A major purpose 

of this bounding interview is to control for asymmetric telescoping errors 

(erroneously reporting an expenditure that occurred before the reference 

period) in recall. Some panel members hypothesized that the structure is 

more likely to be symmetrical in nature, not necessarily subject to bias, 

although the data are not available to test that conjecture.

The current Interview survey also features another type of question 

whose error structure may be quite different. For certain frequently purchased items (such as gasoline or food at home), the respondent is not asked 

to recall all purchases over the three months. Instead he or she is asked to 

“estimate” the usual amount the household spent on the item per month 

or per week. This type of question is illustrated earlier in this section. The 

assumption in this type of question is that the household is likely to make 

many such purchases and that a systematic recall of individual purchases 

over three months would be very problematic. So the respondent makes 

an “estimate” of how much the household typically spends on the item. 

The panel discussed the possible error structure of these types of questions. Some panel members hypothesized that the structure is symmetrical 

in nature, not necessarily subject to bias. Other panel members held that 

the panel did not have sufficient information on the structure to draw a 

conclusion.

Summary of Relative Error in Reporting

Back to the example, which survey more accurately collects the food 

and drink consumed at home data required by the CE? It depends. If the 

conclusion is based on the fact that aggregating the Interview estimates 
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82 MEASURING WHAT WE SPEND

more closely approximates the PCE total, the current Interview survey may 

be more accurate for this expense item. On the other hand, if based on the 

hypothesized accuracy of a diary response in its report of a particular expenditure, one might conclude that the Diary may be more accurate. Drawing a conclusion as to whether the Interview or Diary collects more accurate 

data is not possible with the data at hand. The questions are different, the 

context is different, and the question order is different. The field representative has greater presence in one mode. In addition, each data collection 

mode is subject to different causes of inaccurate reporting. The Interview 

relies on estimates often given with little prior thought to the exact question 

that is going to be asked. At the same time, Diary responses rely on “near 

daily” compliance to record every single expenditure, both large and small. 

The modes are subject to different visual layout effects. The panel knows of 

no research on consumer expenditures that controls for these factors while 

asking the same consumer expenditure questions. The panel has made the 

following conclusion:

Conclusion 5-2: Differences exist between the current Interview and 

Diary reports of expenditures. Differences in questions, context, and 

mode are likely to contribute to these differences. The error structures 

for the two surveys, and for different types of questions in the Interview survey, may be different. Because of these differences, we cannot 

conclude whether a recall interview or a diary is inherently a better 

mode for obtaining the most accurate expenditure data across a wide 

range of items. Both have real drawbacks, and a new design will need 

to draw from the best (or least problematic) aspects of both methods.

SOURCES OF RESPONSE ERROR IN THE INTERVIEW SURVEY

The CE Interview survey is long and exhausting. A household respondent is expected to complete this interview five times, three months apart. 

The interviews average 60 minutes but may be shorter or much longer. 

(Panel members who reported their own expenditures in mock interviews 

with Census field representatives described interviews that lasted significantly longer.) During the interview, respondents are asked to report as 

many as 1,000 specific expenditures during the preceding three months. 

These questions cover the gamut of items for which a household might 

expend dollars, including health insurance, women’s blouses, children’s 

toys, men’s socks, toasters, the repair of an air conditioning unit, vehicle 

cleaning, mortgage interest, electricity, prescription medications, alcohol, 

gasoline, greeting cards, and parking and tolls, to mention just a few. To put 

the enormity of the task in perspective, an information booklet is handed 

to the respondent at the beginning of the interview. This booklet includes 
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 83

36 pages with 9 to 70 items per page of possible consumer expenditures 

the respondent is asked to report.

Inaccurate reporting to this gauntlet of questions will occur. The rest of 

this section highlights some of the potential reasons for these errors.

Motivation in Interview Survey

Respondents in the CE Interview have little apparent motivation to engage in a complex, protracted interview. Once a household member agrees 

to participate in the CE Interview survey, he or she discovers that the task 

is cognitively difficult and time-consuming. Some respondents see the reporting of detailed expenditures as an invasion of privacy. Others may fear 

sharing certain information with a government agency. Some expenditures, 

such as gambling losses or excessive purchases of alcohol, may be embarrassing to report. Beyond those concerns, the majority of respondents just 

want the interview to be over as quickly as possible (Mockovak, Edgar, 

and To, 2010).

The field representatives understand these concerns. When asked about 

factors that contributed to underreporting on the CE, they said the greatest factor was respondent mental fatigue because the interview is too long. 

Sixty-two percent (62 percent) rated this factor as a 6 or 7 on a 7-point 

scale of importance (Mockovak, Edgar, and To, 2010). Field representatives 

want to do their job: complete the current interview and return to repeat 

the process four more times. They feel a need to keep the interview short 

so that it does not end up as a refusal, either immediately or in subsequent 

waves. This produces a tradeoff between completing the interview and 

pushing too hard for accurate answers.

There is little doubt that both the respondent and the field representative benefit from keeping the interview short. Encouraging respondents to 

give more complete answers, for instance by encouraging them to find and 

consult records or consult with other household members, is likely to slow 

down the interview process. Placing an emphasis on getting exact amounts 

is also likely to lengthen the completion process and frustrate respondents.

Some respondents may be initially motivated to report accurately but 

soon find that they cannot. Accurate recall of the hundreds of items on 

the CE is very difficult. Even motivated respondents may find they are 

not able to do this. (See panel members’ reactions to completing the CE 

in Chapter 4, in the section “Panelists’ Insight as Survey Respondents.”) 

Under these conditions the motivations of both the respondent and field 

representatives affect the accurate reporting of expenditures.

Conclusion 5-3: Motivational factors of both the respondent and field 

representative appear to negatively influence the quality of the CE 
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84 MEASURING WHAT WE SPEND

Interview data. This leads the panel to the judgment that a changed 

incentive and support structure for both respondents and field representatives will be needed for a future CE redesign to motivate high-quality 

reporting and reduce fatigue.

Interview Questionnaire Structure

The current CE Interview questionnaire is structured around categories 

of expense items. The field representative asks first about a fairly broad category of items and then drills down until the question is directed toward a 

specific detailed item. For example, we will ask first about any clothing purchases: “Did you purchase any pants, jeans, or shorts?” At this point, the 

questionnaire asks a series of ancillary questions about the purchased item.

•	 Describe the item.

•	 Was this purchased for someone inside or outside of your 

household?

•	 For whom was this purchased? Enter name of person for whom it 

was purchased. Enter age/sex categories that apply to the purchase.

•	 How many did you purchase? Enter number of identical items 

purchased.

•	 When did you purchase it?

•	 How much did it cost?

•	 Did this include sales tax?

•	 [if the respondent cannot separate the item from other items] What 

other clothing is combined with the item? Enter all that apply from 

a list of 18 clothing categories.

The questionnaire then returns up one level of aggregation to identify other 

expenditures within that subcategory (“Did you purchase any other pants, 

jeans, or shorts?”). This questionnaire structure creates the cognitive challenges described below.

The Structure of the CE Interview Encourages Satisficing and Similar 

Response Errors

The CE Interview asks a series of global questions that require respondents to think about unnamed specific items (e.g., pants, socks, belt) they 

have purchased based upon a general stimulus (e.g., clothing). If they answer “yes” to the global question, then they will be asked specific questions

about that purchase or purchases. This sequence is repeated dozens of times 

during each interview and may affect respondent behavior. It seems likely 
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WHY REDESIGN THE CE? 85

that respondents learn quickly in the first interview, and are reminded in 

each successive one, that the interview will last longer if they answer “yes” 

to these screening questions. For example, a respondent would be asked if 

anyone in the household took any trips during the three-month period. A 

“yes” answer leads to many questions about specific expenditures made on 

that trip. After completing that series of specific questions, the respondent 

is then asked if household members took any other trips. The respondent 

quickly understands that reporting a second trip would add a number of 

additional questions and minutes to the interview. This phenomenon is 

known as “motivated underreporting” and is discussed by Kreuter et al. 

(2011). A survey of CE field representatives (Mockovak, Edgar, and To, 

2010) quantified this problem in the CE. Field representatives were asked 

how often this phenomenon happens in a CE interview. Fifty percent of field 

representatives said that it happened frequently or very frequently.

Conclusion 5-4: The current structure of the Interview questionnaire 

cycles down through global screening questions, and asks multiple additional questions when the respondent answers “yes” to a screening 

question. As this cycle repeats itself, a respondent “learns” and may 

be tempted not to report an expenditure in order to avoid further 

questions.

CE Methods Are Not Well Aligned with Modern Consumption Behavior

The CE Interview questionnaire is cognitively designed to collect spending information in an earlier era when purchases and expenditures were 

made in quite different ways. The cognitively outdated design of the questionnaire makes it difficult for consumers to respond easily and accurately 

to the questions. This exacerbates both recall error problems and overall 

response.

Major changes have occurred in retail markets in the last decade, including a major consolidation of the retail pharmacy and grocery industry. 

Simultaneously there has been an explosion of loyalty card programs in 

these same (and other) industries. These days, it is common for households 

to purchase a variety of types of items in a single large store, such as Costco 

or Walmart, rather than going separately to a grocery store, butcher shop, 

clothing store, and hardware store. A single purchase of a group of items 

and the payment of a “total amount” may make it more difficult for a 

consumer to later recall details about an individual item than if that item 

were purchased in a separate transaction. Separate transactions provide a 

focus on the individual items and may help reinforce the memory of both 

purchasing the item and the amount paid.
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86 MEASURING WHAT WE SPEND

Consumers purchase items through many different methods, including credit card, debit card, check, cash, gift card, payroll deduction, and 

preauthorized automated payment. Items may be purchased in person, by 

telephone, by mail, or online. Respondents may remember how much they 

paid on their credit card bill but be unable to recall the specific items that 

were purchased. Respondents may not think at all about automatic payments. The combined effects of these increasingly varied ways of making 

purchases and a rigid interview questionnaire that generally flows by product groupings rather than by shopping trip or payment method make the 

task of recalling and reporting those expenditures more difficult.

This question structure seems likely to encourage the use of “estimation” rather than the reporting of a specific recall, and ultimately may lead 

to less accurate reporting of particular expenditures (Beatty, 2010; Peytchev, 

2010). Some questions on the Interview survey (such as food at home) specifically ask the respondent for estimates rather than specific recall. Other 

questions ask for a specific recall, yet it is unclear in these questions how 

much estimation is also taking place.

Conclusion 5-5: The current design of the CE Interview questionnaire 

makes the cognitive task of recalling expenditures difficult and encourages estimation.

Some Questions Are Just Difficult to Answer

In the fifth interview, respondents are asked a series of questions about 

household financial assets:

•	 On the last day of last month, what was the total balance or market value (including interest earned) of checking accounts, brokerage accounts, and other similar accounts?

•	 On the last day of last month, what was the total balance or market value (including interest earned) of U.S. savings bonds?

•	 How does the amount your household had on the last day of last 

month compare with the amount your household had on the last 

day of last month one year ago?

These questions and others like them that ask for precise accountings by 

month are very difficult for respondents to answer. Banks are likely to 

provide monthly statements for checking accounts, but holders of savings 

and other asset accounts are generally provided with quarterly statements. 

A respondent is unlikely to know the market value of those accounts on 

the last day of the last month unless that day corresponds with a quar-
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WHY REDESIGN THE CE? 87

terly statement. Think of the frustration of respondents who do not have 

the information to answer that question accurately and are then asked to 

compare their estimate with the market value of those same assets one year 

earlier. Regarding U.S. savings bonds, individuals may monitor the maturity 

date of those bonds but are very unlikely to observe the growth in value on 

a monthly basis, nor even know how to do so.

Respondents are asked for the purchase date of most expenditures they 

recall. For some, they may be confused about the date on which a particular 

“expense” occurred. This can be particularly problematic with online or 

mail purchases. Was it “purchased” when the order was placed, when the 

item arrived, or when the bill was paid? In the urgency to complete the 

interview quickly, these CE guidelines may not be explained, understood, 

or remembered.

Some consumer transactions occur quickly and routinely without the 

purchaser remembering the cost, even momentarily. Specific purchases and 

prices that did not mentally register with the respondent cannot be reported 

later (Bradburn, 2010). Imprinting the “event” in memory or encoding, 

as psychologists describe it, is less likely to happen with minor, routine 

purchases. The use of credit and debit cards to pay for groups of varied 

purchases in large stores seems less likely to result in encoding for specific 

purchases and prices. In addition, credit or debit cards are increasingly 

likely to be used for even small routine purchases (lunch, a newspaper, or 

garage parking), contributing further to the lack of encoding. Automatic 

deductions of payments from a bank account may also contribute to a 

lack of encoding. Thus, multiple aspects of contemporary society appear 

to increase the difficulty of respondents’ ability to report expenditures accurately or at all.

Even if respondents remember how much they paid for a shirt, they 

may have difficulty knowing whether the amount included sales tax. Additionally, many online purchases are made without the inclusion of state 

sales tax. The respondent may answer that the amount of an online purchase did not include sales tax, but the CE process will then add tax to that 

purchase when no tax was actually paid.

Conclusion 5-6: Some questions on the current CE Interview questionnaire are very difficult to answer accurately, even with records.

Interview Survey Recall Period

The CE Interview questionnaire asks respondents to recall most expenditures over the previous three months. The issue of recall, and its effect 

on reporting accuracy in the CE, was a major topic in the BLS-sponsored 
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88 MEASURING WHAT WE SPEND

CE Methods Workshop in December 2010. Cantor (2010, p. 4) provided 

a basic summary, saying “longer recall periods lead to more measurement 

error. For the CEQ [CE Interview], there are two important characteristics 

related to error. One is whether the expense is reported at all. The second is 

the detail associated with the event.” A BLS paper at that same workshop 

expressed concern:

The length of this three-month recall period, combined with the wide 

range of question types asked, is generally thought to represent a substantial cognitive burden for respondents. Furthermore, there are different 

approaches to asking about the three-month recall period, which may 

compound the cognitive burden for respondents. For example, some CEQ 

[CE Interview] questions ask about cumulative expenses over the entire 

three-month recall period, other questions ask respondents about total 

monthly expenditures for the first, second, and third month of the recall 

period, and still others ask respondents for average weekly expenses over 

the recall period. (Bureau of Labor Statistics, 2010c, p. 1)

A three-month recall period can be appropriate for major expenditures 

such as a major appliance or an automobile, or for expenditures that occur on a regular basis such as rent and utility bills. These are the types of 

purchases for which the CE Interview survey was initially designed (Bureau 

of Labor Statistics, 2008). However, the survey currently attempts to collect data on expenditures less likely to be remembered. It also asks detailed 

information about those expenditures that are difficult to recall. A common 

response error is one of omission—to simply not remember or not report 

the purchase and/or price of a particular item. These errors appear to be a 

major factor in the underreporting of expenditures on the CE.

On the other hand, a longer reporting period (be it for recall or concurrent reporting) has some advantage for estimation. Frequent expenditures 

may be captured well by a short reporting period, while other expenditures 

are less frequent and will not be reported by all households during a short 

recall period. A sufficient sample size collected throughout the year will 

avoid bias in the estimates, but there is likely to be more variability in the 

estimates with a shorter reporting period if all other factors are equal. If infrequent expenditures are also major expenditures (i.e., easily remembered), 

then a longer recall period for those items may be reasonable.

Conclusion 5-7: Three months is long for accurate recall of many items 

on the CE Interview survey. This situation is exacerbated by the ancillary details that are collected about each recalled expense. Errors of 

omission are likely to occur, and are a contributing factor to the underreporting of expenditures on this survey. Short recall periods, however, 
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WHY REDESIGN THE CE? 89

may produce more variability in the estimates and provide difficulties 

for economic research.

Use of Records in the Interview Survey

Some respondents do not keep records for expenditures, nor do they 

keep receipts that specify item amounts. If they have records, they may 

only keep grand totals without breakouts by item. When records are available, they likely are not organized in a way that allows them to be used 

effectively (or efficiently) during the interview. Field representatives have 

reported that a respondent occasionally goes in search for a receipt or record, to return sometime later without it.

Respondents who keep electronic records may not have them up to date 

in their computer when the interview is conducted and therefore cannot 

use them to provide accurate answers. A respondent’s electronic records 

are most likely organized differently from how they are requested in the 

interview. For example, a respondent may have a record of automobile 

fuel costs, but may not keep it separately for different cars; purchases at 

Safeway may not be broken down by food and other household items, all 

being considered “groceries.”

Paper receipts may be problematic as well. Groups of purchases are 

likely to be combined into one receipt, and that receipt may be difficult 

to decipher. Coupon discounts, discounts for the use of a particular credit 

card, or special “in-store” sales may be shown separately on receipts, so 

even a conscientious respondent may have difficulty understanding what 

was actually paid for a specific item. The receipt probably does not include 

rebates that consumers receive at a later point in time. Receipts vary enormously across stores, with abbreviations, special coding, and character 

limitations affecting how a particular purchase is described. The respondent 

may not be able to interpret that information, especially as the memory of 

the specific purchase fades over days and weeks.

BLS conducted a study on use of records for the CE, using data from 

CE interviews conducted between April 2006 and March 2008. Following 

each interview, the field representative recorded whether the respondent 

used records and which types of records were used. Edgar (2010) indicated 

that the study involved 44,300 interviews with 21,011 unique households. 

She reported that in 39 percent of interviews, the respondent never or almost never used records, while 31 percent always or almost always used 

records. Younger respondents were less likely to use records than older 

respondents. Interviews were longer when records were used and shorter 

when they were not used. There was a higher level of total expenditures 

reported when records were used. Those always or almost always using re-
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90 MEASURING WHAT WE SPEND

cords as a group reported a higher level of expenditures. In summary, Edgar 

(2010, p. 26) found that the use of records is “related to longer interviews, 

more reports, and higher reports.”

These patterns appear again in a later (2010) evaluation survey. 

Field representatives working on the CE surveys were asked how often 

respondents use records and receipts to help report their expenditures. 

Thirty-two percent reported that respondents rarely used these records 

and another 50 percent reported that respondents only sometimes used records. Only 18 percent of field representatives said that respondents often

used records. In that same study, 68 percent of field representatives said 

that respondents never or rarely consulted online or electronic records.7

Geisen, Richards, and Strohm (2011) reported on a study conducted 

for BLS on the availability of records and response accuracy without those 

records. They conducted two interviews with the same households (n = 

115) within a week of each other. Incentives were given for both interviews. 

The first interview asked respondents to complete nine sections of the CE 

Interview survey. Afterward, respondents were asked to gather all of the 

records they had relevant to that interview, and they were re-interviewed 

within the week with their gathered records. The second interview focused 

on matching the original response to available records. They found that 

respondents had records for only 36 percent of the expenditure items and 

41 percent of the income items. Records were most likely to be available 

for property taxes (59 percent), mortgage payments (59 percent), and 

subscriptions (53 percent). The most recent pay stub was available only 

40 percent of the time. Regarding response accuracy without records, the 

authors found that the expenditure amount reported in the first interview 

“matched”8 the amount on the record only 53 percent of the time. The 

difference varied greatly by expenditure categories, and ranged from an 11 

percent underestimate to an 83 percent overestimate.

The increasing use of telephone interviewing in the CE may reduce the 

respondent’s use of records in responding. In preliminary results from a 

2011 survey of field representatives working on the CE survey (Bureau of 

Labor Statistics, 2011d), 45 percent of field representatives reported that 

respondents were much less or somewhat less likely to use records when 

being interviewed over the phone. Only 4 percent of field representatives 

reported that respondents were much more likely or somewhat more likely

7Internal Bureau of Labor Statistics memo dated November 18, 2010.

8Geisen, Richards, and Strohm (2011) classify a matched response as one in which the initial 

response was between 90–110 percent of the record amount (for amounts ≤ $200); 95–105 

percent of the record amount if the amount was > $200; and 95–105 percent of the record 

amount for rent, mortgage loan, and income regardless of amount.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 91

to use records in a phone interview. However, 39 percent of field representatives reported that respondents were neither less likely nor more likely to 

use records on a phone interview.

Conclusion 5-8: The use of records is extremely important to reporting expenditures and income accurately. The use of records on the 

current CE is far less than optimal and varies across the population. A 

redesigned CE would need to include features that maximize the use 

of records where at all feasible and that work to maximize accuracy of 

recall when records are unavailable.

Proxy Reporting in the Interview Survey

According to the CE procedures, multiple household members are not 

interviewed even though most households have more than one person who 

makes purchases. The field representative attempts to interview the “most 

knowledgeable” household member. Schaeffer (2010) reported that proxy 

information reported by one person for another in many types of surveys 

has been found to be inaccurate. In the CE, the household respondent may 

be unaware of purchases made by other household members (Bureau of 

Labor Statistics, 2010b).

The effect of proxy reporting is serious, especially for “personal” purchases such as clothing or for purchases that household members want to 

keep private. A survey of CE field representatives (Mockovak, Edgar, and 

To, 2010) quantified this problem. Field representatives reported the issue 

of the household respondent not knowing about purchases made by others 

in the consumer unit (household) as one of the two most important reasons 

for underreporting of expenditures. More than half (53%) mentioned it as 

6 or 7 on a 7-point scale of importance. In households with multiple purchasers, field representatives reported 18 percent of the time that a second 

person never or almost never participates in the CE survey. An additional 

48 percent mentioned that it happens less than half of the time.

Multiple considerations may underlie the inability of one person to report for others. Household members may have separate sources of income. 

In addition, they may have separate bank accounts and credit cards. While 

each person may contribute to household expenses, the exact amounts of 

the other person’s contribution may be unknown; for example, one person 

buys food while the other pays housing costs. The great variety of arrangements for handling individual and joint income complicates the reporting 

of consumer expenditures. In addition, field representatives have reported 

it appears that some other household members may intentionally withhold 

information from the household respondent.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

92 MEASURING WHAT WE SPEND

Conclusion 5-9: The use of proxy reporting on the CE Interview is 

problematic, and is a potential cause of underreporting of expenditures.

Telephone Data Collection in the Interview Survey

More than one-third (about 38 percent) of the CE interviews are completed by telephone rather than face-to-face (Safir and Goldenberg, 2008). 

For in-person interviews, field representatives hand an Information Booklet

to respondents to assist them in recalling items that might be forgotten. In 

telephone interviews, this recall aid is not available. Telephone interviews 

are shorter and have fewer positive answers to screener questions. They 

also result in less detail in responding, higher item nonresponse, and more 

reporting of rounded values. According to the field representative survey, 

receipts and other records are also less likely to be used by telephone 

respondents.

Conclusion 5-10: Telephone interviews appear to obtain a lower quality of responses than the face-to-face interviews on the CE, but a substantial part of the CE data is collected over the telephone.

SOURCES OF RESPONSE ERROR IN THE DIARY SURVEY

The Diary survey collects data on expenditures a household makes during a brief period of time (two weeks). It was designed to collect a level of 

detail unlikely to be recalled accurately during the Interview survey. Cognitively, the Diary survey is very different from the Interview survey, and has 

its own error profile.

Motivation to Complete the Diary

The current CE Diary is designed to reduce recall problems by emphasizing the recording of expenditures the day they are made. However, 

respondents in the CE Diary have little apparent motivation to engage in 

a complex, protracted diary-keeping exercise. Once a household member 

agrees to participate in the CE Diary survey, he or she discovers that the 

task can be difficult and time-consuming. Some respondents do not record 

expenditures each day. Expense items may be reported early in the week, 

with less enthusiasm later in the week, and even less enthusiasm during the 

second week. This lapse may be caused by general fatigue with the process 

and/or the fact that the respondent found the diary form difficult to use. 

Statistics Canada found the same concern with the diary portion of their 

consumer survey, reporting that 20 percent of their two-week diary days 

were “nonrespondent” days (Dubreuil et al., 2010). This lack of motivation 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 93

of a respondent to stop in the middle of busy daily activities and record an 

expenditure on the diary form is probably the major cause of underreporting of expenses in the current Diary survey.

Field representatives place mid-week calls to diary-keepers to mitigate 

this problem—to ask whether the diary-keeper is having any difficulties 

and to encourage continued reporting through the week. In addition, the 

diary pick-up at the end of each week provides the field representative 

an opportunity to explore whether the respondent may have forgotten to 

record certain expenditures such as those from checks, cash, credit card 

payments, automatic online payments, or deductions from pay stubs. These 

mitigation strategies are not uniformly implemented. There are shortcuts allowed in the fielding of the Diary survey; for example, field representatives 

are permitted to place both one-week diaries at the same time. Thus, no 

“reinforcing” visits take place in these cases to examine diary entries and 

to encourage increased compliance during the second week. The panel did 

not have data on the extent of this practice or on how often the mid-week 

telephone calls were placed with households.

Conclusion 5-11: A major concern with the Diary survey is that respondents appear to suffer diary fatigue and lack motivation to report expenditures throughout the two-week data collection period and 

especially to go through the process of recording all items in a large 

shopping trip.

Diary Structure

The current diary form suffers from a number of cognitive problems 

that make the diary-keeping process more difficult than it needs to be and 

thus can contribute to underreporting on those forms.

Learning to Complete the Diary May Be Confusing

An initial challenge facing respondents willing to complete the diary 

is sorting through all the instructions to understand how and where to 

report expenditures. The diary has 44 numbered pages plus front and back 

covers, both of which have attached foldout flaps. Fifteen separate pages 

(including covers and foldout flaps) provide instructions for the diarykeeper on what and how to report, with instructional material scattered 

among these 15 pages. On the front cover, the field representative identifies 

the days the diary is supposed to be kept and the first names of the people 

in the household. The foldout cover flap lists numerous examples for each 

category of expenditures. Page 1 tells “Why the CE Diary Is Important.” 

Page 2 describes “How to Fill Out Your Diary” and the four parts. Pages 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

94 MEASURING WHAT WE SPEND

4 through 7 provide examples of how to fill out each of the four sections. 

Finally, the back cover provides a pocket and instructions for storing receipts and other expenditure records. It also includes a Daily Reminder list 

of 18 items with an instruction to ask other members of the household for 

their expenditures each day. Another foldout flap provides answers to 15 

frequently asked questions.

The diary booklet is not organized so as to reveal a natural linear 

process for becoming acquainted with the recording process. The field representative must flip through the booklet to train the respondent on its use, 

referring to the 15 individual instructional pages (including foldout flaps) 

to explain how the diary is designed to be completed. Although each field 

representative is likely to handle the diary placement somewhat differently, 

the following may be a typical set of instructions to a potential diary-keeper. 

Figures 5-2 through 5-5 show four relevant pages from the diary:

•	 Turn to page 8 (instead of starting at page 1). This page is labeled

“Day 1” with a separate heading labeled “1. Food and Drinks 

Away from Home.” Circle the “day of week” that appears in a 

third heading.

•	 Moving to the substance of the page, the field representative might

explain the six columns of information that need to be answered 

for each food entry: type of meal; description of meal; where was 

meal purchased; total cost; which of three types of alcoholic beverages might have been purchased; cost of that alcohol.

•	 Turn to page 3, to a section on “How to Fill Out Your Diary.” 

The field representative explains that the food and drinks section 

previously reviewed was only one of four such tables that have to 

be filled out each day.

•	 Turn to page 4. This page displays detailed examples of how the

food and drinks might be reported.

•	 Move back and forth between blank diary pages, examples of

filled-out pages, and other sections. These sections include general 

instructions (page 2), keeping receipts in the back pocket of the diary, a “What Not to Record” section, and, on the back flap of the 

cover, answers to 15 different questions that the respondent might 

have.

Conclusion 5-12: A lot of information is conveyed to the diary respondent in a short amount of time. The organization of the diary booklet 

may result in considerable frustration among some individuals, who 

feel they cannot master the instructions. They choose instead to collect 

receipts and leave them for the field representative to enter during the 

follow-up visit.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 95

Fig5-2.eps

Mark (X) one that

best describes 

the type of meal

Please unfold the LEFT FLAP to see Additional Examples

breakfastlunchdinnersnack/other

Fast-Food

Take-out

Delivery

Concession

Full 

Service

Places

Total Cost

with tax & tip

If alcoholic

beverages

included,

mark (X) all 

that apply

Enter the

total cost of

the alcohol

Vending

Machines

or Mobile

Vendors

Employer 

or School

Cafeteria

Mark (X) one that best describes

where you made this purchase

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

122

FORM CE-801 (7-1-2005)

wine

beerother

8

117

118

119

120

121

If there are not enough lines in this part, please continue recording your expenses on pages 36–37.

1 2 3 4

1 2 3 4

1 2 3

1 2 3 4

1 2 3 4

1

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3 4

Examples:

Description

(see examples above

and on the flap)

Day 1 SUN MON TUE WED THU FRI SAT

1. Food and Drinks Away from Home breakfast buffet

carry-out lunch

dinner & cocktails at restaurant

beer at happy hour

pretzels at ballgame

wine at tavern

pizza delivery

Chinese takeout

child’s school lunch

croissant from café

ice cream from truck

wedding reception caterer

soda from vending machine

hot dog from convenience store

popcorn and soda at movies

4

2 3 4

3

FIGURE 5-2 Diary booklet, page 8.

SOURCE: Bureau of Labor Statistics.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

96 MEASURING WHAT WE SPEND

Fig5-3.eps

How to Fill Out Your Diary

Look on the next 4 pages for examples and tips

on how to record your purchases.

The diary is divided into 7 days and each day is divided into 4 parts.

Enter each item in the appropriate part for each day.

These are the 4 parts within each day of the diary:

1. Food and Drinks Away from Home

Enter the total cost with tax and tip.

If alcohol was part of the purchase, check whether it was wine, beer, and/or other 

alcohol and enter the total cost of the alcohol.

Mark one of the four choices that best describes where you made the purchase.

2. Food and Drinks for Home Consumption

Mark whether the item was fresh, frozen, bottled/canned, or other.

Enter the cost without tax and deduct any discounts or coupons.

Describe the item.

Mark the last column if the item was purchased for someone not on your list (e.g. gifts).

3. Clothing, Shoes, Jewelry, and Accessories

Mark the appropriate sex and age range of the person for whom the item was bought.

Describe the item and enter the cost without tax.

Mark the last column if the item was purchased for someone not on your list (e.g. gifts).

4. All Other Products, Services, and Expenses

Mark the last column if the item was purchased for someone not on your list (e.g. gifts).

Describe the item and enter the total cost without tax.

There is an "Additional Pages" section on pages 36–44 in case you

run out of lines on any particular day.

*Please Note: If you are unsure about whether to include an item or

where to record an item, write it down wherever it seems best or 

make a note and ask your field representative.

Mark one of the four choices that best describes the type of meal and describe briefly.

FIGURE 5-3 Diary booklet, page 3.

SOURCE: Bureau of Labor Statistics.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 97

Fig5-4.eps

3

1 2 3

X X

Day 1

Mark (X) one that

best describes 

the type of meal

SUN MON TUE WED THU FRI SAT

Please unfold the LEFT FLAP to see Additional Examples

1. Food and Drinks Away from Home

breakfastlunchdinnersnack/other

Fast Food

Take-out

Delivery

Concession

Full 

Service

Places

Total Cost

with tax & tip

If alcoholic

beverages included,

mark (X) all 

that apply

Enter the

total cost of

the alcohol

Vending

Machines

or Mobile

Vendors

Employer 

or School

Cafeteria

Mark (X) one that best describes

where you made this purchase

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

FR USE: None TR VC FORM CE-801 (7-1-2005) wine beer other4

Description

bagel, juice

X

EXAMPLE

pizza

coffee

sandwich, soda

chips

elem.school lunch - month

soda

buffet

drinks from cash bar

X

X

X

X

X

X

X

X

X

X

X

X

X

79

XX

X

45

62

15

57

35

15

70

00

65

23

00

2

5

1

5

12 00

15 00

Level of detail needed: 

briefly describe the meal.

Include tax & tip

for part 1 only.

X

X

X

X

117

118

119

120

121

122

X caterer - Family Reunion 350 00 X X 95 00

1234

1234

1 2 3 4

1234

1234

1234

1234

1234

1234

1234

1234

1234

1234

1234

1234

1234

1234

1234

1234

1234

1234

1234

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

If alcohol was included

in the purchase, mark

whether it was wine, beer,

and/or other and enter the

total cost of the alcohol.

 Use the pocket on the inside of the back

cover to store your receipts until you’re ready 

to record your purchases.

If there are not enough lines in this part, please continue recording your expenses on pages 36–37.

2

1 2 3 4

4

4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

1 2 3 4

(See examples above

and on the flap)

Examples:

breakfast buffet

carry-out lunch

dinner & cocktails at restaurant

beer at happy hour

pretzels at ballgame

wine at tavern

pizza delivery

Chinese takeout

child’s school lunch

croissant from café

ice cream from truck

wedding reception caterer

soda from vending machine

hot dog from convenience store

popcorn and soda at movies

EXAMPLE

1 2

1234

FIGURE 5-4 Diary booklet, page 4.

SOURCE: Bureau of Labor Statistics.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

98 MEASURING WHAT WE SPEND

Fig5-5.eps

General Instructions

Refer to the flap

attached to the

front cover for

Examples of Expenses.

Fill out this diary for an entire week, writing down EVERYTHING you and the

people on your list spend money on each day – the products you buy, the

services you use, the household expenses you have during the week – no matter

how large or small they are.

Do NOT record:

Refer to the flap

attached to the

back cover for answers to

Frequently Asked Questions.

♦ Expenses of people on your list while they were away from home overnight.

We recommend that you record your expenses each day.

Think about where you went and what you’ve done.

Talk to the people on your list every day to find out how they spent their money.

Include payments by:

Cash

Check

Food Stamps

Credit/Debit Card

Money Order

WIC Voucher

Automatic Withdrawal/Payroll Deduction

Store Charge Card

Grocery Certificate

Keep receipts and other records so that you will remember to record what you

bought or paid for. Use the pocket at the back of the diary to store them.

Receipts

Utility Bills

Pay Stubs

Some record types include:

Include items that you bought for people who are not on your list, such as gifts.

♦ Business or farm operating expenses

♦ Sales tax for:

Part 2. Food and Drinks for Home Consumption

Part 3. Clothing, Shoes, Jewelry, and Accessories

Part 4. All Other Products, Services, and Expenses

Bank Statements

Telephone Bills

Catalog/Internet Order Invoices

Credit Card Statements

2 FORM CE-801 (7-1-2005)

FIGURE 5-5 Diary booklet, page 2.

SOURCE: Bureau of Labor Statistics.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 99

Recording Expenditures May Be Problematic

The diary instructions focus on recording expenditures each day during 

the diary week, separately for different categories. A total of 28 pages of 

the booklet are laid out by “day” and consist of labeled tables for recording 

household expenditures made in each of four categories:

1. Food and Drinks Away from Home

2. Food and Drinks for Home Consumption

3. Clothing, Shoes, Jewelry, and Accessories

4. All Other Products, Services, and Expenses

Nine additional pages are included for reporting any information that will 

not fit on the individual day pages.

The diary-keeper is to record each expenditure on the correct page by 

day and expenditure category. For each item recorded, the form asks for a 

description of the item, the cost, plus additional information that differs for 

each of the four expenditure categories. For example, the tables for Clothing, Shoes, Jewelry, and Accessories ask for additional information on the 

individual for whom the item was purchased: gender, age, and whether the 

person was a member of the household. The tables for Food and Drinks 

Away from Home also ask where the item was purchased, whether the 

item included alcoholic beverages, and a breakout of the cost of any such 

alcohol.

Research has shown that respondents are influenced by much more 

than words on how to complete questionnaires; a mostly linear path with 

guidance from numbers, graphics, and symbols also helps to instruct respondents on how a questionnaire (or diary) is designed to be completed 

(Dillman, Smyth, and Christian, 2009). The current in-person delivery and 

retrieval process is designed to compensate for some of these problems. 

The field representative may look at the receipts collected by the household 

respondent and ask other questions to find out whether all expenditures 

have been recorded. Realization at the initial visit that the interviewer will 

call mid-week and return to pick up the diary at the end of the week would 

seem to encourage respondents to think about their daily expenditures and 

be able to recall and report them at the end of the diary week contact. 

However, this mitigation process is not always followed.

Other general problems can occur with the diary. Some shopping trips 

require complex reporting of many and varied items on the diary forms. 

For example, a major grocery-shopping trip may take considerable time and 

effort to record. Each item purchased must be itemized separately with a 

description and cost. (The respondent has to figure out whether to record 

before or after the food is put away.) Receipts are often limited to abbrevia-
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

100 MEASURING WHAT WE SPEND

tions and codes that may not be understandable to the person who made 

the purchase and/or is completing the diary.

Part of the diary placement visit is for the field representative to “size 

up” the respondent as to whether he or she understands how to complete 

the diary and seems committed to do so. If the respondent does not appear 

to understand the instructions and the use of the daily recording forms, 

some field representatives will revert to an alternative approach and ask 

such a respondent to merely keep all of the household receipts for the 

week’s expenditures in a pocket of the inside back cover. On the next visit 

a week (or two weeks) later, the field representative and the respondent 

will go through the receipts and fill in the diary forms together. The panel 

learned that this approach is likely used for a significant number of households in which the respondent finds keeping the diary too difficult to do.

Conclusion 5-13: It is likely that the current organization of recording 

expense items by “day of the week” makes it more difficult for some 

respondents to review their diary entries and assess whether an expenditure has been missed.

Reporting Period for the Diary Survey

The Diary survey has a one-week reporting period, followed immediately by a second wave also consisting of a one-week reporting period. 

The Diary survey was conceived as a vehicle for collecting smaller and frequently purchased items that were unlikely to be reported accurately over 

a three-month recall period. However, in practice, the Diary collects a wide 

variety of expenditure items. Since many types of expenditures are made 

infrequently, and others are not purchased in the same amount each week, 

Diary expenditure estimates for these variables are likely to be more variable than those from the Interview survey with its three-month reporting 

period. For example, Bee, Meyer, and Sullivan (2012) found that for 2010 

the weighted average coefficient of variation of spending reports on 35 categories of expenditures common to both the Interview and Diary was nearly 

60 percent higher for a typical Diary response than for a typical Interview 

response.9 One reason is that, in 2010, close to 10 percent of weekly diaries 

that were considered as valid observations reported no in-scope spending at 

all. (About 75 percent of these reports were out-of-scope because the family was on a trip for the week.) Consequently, a larger number of weekly 

diaries is required to equal the precision of the quarterly interviews.

9Their comparisons adjusted for the different sample sizes of the Diary and Interview surveys. The coefficient of variation is the standard error of a mean or other statistic expressed 

as a percentage of the statistic. 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 101

A related conceptual issue is that the short reference period in the current Diary survey may be too short to accurately measure an individual’s 

normal spending pattern. While these errors may average out in the calculation of means, several important uses of the CE require the measurement 

of the distribution of spending.

Proxy Reporting in the Diary Survey

Respondents are asked to consult with other members of the household 

during the week and to report expenditures for all members. The field representative lists the names of the members on the inside cover of the diary. 

These instructions are aimed at encouraging communication between the 

person who agrees to complete the diary and others in order to facilitate 

accurate reporting. As stated earlier, the diary mode does provide more 

opportunity to confer with other household members over the week than 

there is within a rushed recall interview. However, there are still issues with 

proxy reporting in today’s households.

The changing structure of U.S. households, in which the adults in that 

household are more likely to have separate incomes and expenditure patterns, means that unless deliberate communication occurs expenditures may 

be underreported. In addition, household members are not always open 

with each other about what they have purchased or how much it cost. If 

a member of the household does not want the person most responsible for 

completing the diary to know of the expenditure or its cost (e.g., a teenager 

downloading a new video game, the cost of an anniversary gift, or payment 

of a parking ticket), the diary will probably miss the expense.

Conclusion 5-14: Although the diary protocol encourages respondents 

to obtain information and record expenditures by other household 

members during the two weeks, it is unclear how much of this happens.

NONRESPONSE

Comparison of Response Rates

In calculating response rates on the CE Interview survey, BLS uses outcome information from each household for each wave (waves two through 

five) as independent observations in the survey. For the Diary survey, BLS 

counts each week of the two weeks of diary reporting by a household as 

an independent observation. The “CE program defines the response rate 

as the percent of eligible households that actually are interviewed for each 

survey” (Johnson-Herring and Krieger, 2008, p. 21). These calculations 

exclude cases where the household is ineligible.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

102 MEASURING WHAT WE SPEND

BLS sometimes refers to the rates described by Johnson-Herring and 

Krieger as the “collection rates” since they are computed by the Census 

Bureau immediately following data collection. In post-collection processing, 

BLS removes some data records because they are found to have limited data 

entries and expenditure dollar amounts. BLS then recalculates the response 

rates, and sometimes refers to these adjusted rates as “estimation rates.” 

Johnson-Herring and Krieger do not discuss these adjustments in their 

description of methodology. In comparing the “collection rates” with the 

“estimation rates” one sees that the adjustments affect the Diary rates more 

than the Interview rates. BLS generally provides the “estimation rates” as 

the response rates to their microdata users. After some consultation with 

BLS, the panel has concluded that the adjusted “estimation rates” more 

closely describe the usable response, and has decided to use those as the 

response rates for the purpose of this report.

Thus, as reported in Chapter 3, the CE Interview survey had a response 

rate (estimation rate) in 2010 of 73 percent, slightly ahead of the Diary 

survey, which had a response rate of 72 percent.

Both surveys have experienced declines in response rates over time, 

a problem that has plagued most government household surveys. The response rates (estimation rates) for the Diary survey have been slightly lower 

than those for the Interview survey (see Figure 5-6). The CE is a burdensome survey, and the overall response rate is lower than several well-known 

but less burdensome surveys such as the Current Population Survey (92%) 

and the CPS Annual Demographic Survey (80% to 82%).

Fig5-6.eps

66

68

70

72

74

76

78

2005 2006 2007 2008 2009 2010

Percent

Interview

Diary

Year

FIGURE 5-6 Response rates (estimation rates) for Consumer Expenditure Interview 

and Diary surveys.

SOURCE: Bureau of Labor Statistics, data table provided to panel.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 103

However, the CE’s response rate is comparable to consumption surveys 

in other countries, which have experienced similar declining response rates 

during the period between 1990 and 2010. Figure 5-7 depicts the response 

rate to the CE (United States) compared to response rates for comparable consumption surveys in Australia, Canada, and the United Kingdom 

(Barrett, Levell, and Milligan, 2011). The CE response rate is somewhat 

higher than the others.

Panel Attrition

Given that the CE Interview survey uses a rotating panel design with 

five waves of data collection per panel, an additional response concern 

relates to attrition over the life of a panel (Lepkowski and Couper, 2002). 

King et al. (2009) studied the pattern of participation in the CE. In this 

study, they looked at a single cohort first interviewed in April–June 2005. 

Among the households that completed the first wave interview, 78.6 percent were classified as complete responders (data for all five waves were 

captured), 14.1 percent were classified as attritors (completed one or more 

Fig5-7.eps

bitmap

FIGURE 5-7 Response rates for consumption surveys across four western countries.

SOURCE: Barrett, Levell, and Milligan (2012).
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

104 MEASURING WHAT WE SPEND

interviews before dropping out), and 7.3 percent were classified as intermittent responders (completed at least one but not all waves of data collection). It is not clear whether the response rates reported above are for 

all cohorts in a particular quarter (i.e., averaging across different panels), 

but the drop-off after the first wave of data collection raises both concerns 

and opportunities.

A key concern is that the decision to attrite may be influenced by the 

experience of the first wave, and that experience may be different depending 

on the number and types of expenditures reported in that wave. If this is 

the case, the attrition can potentially affect the estimation of expenditures 

during later waves. In other words, to what extent is later wave participation affected by reported expenditures (or expenditure patterns) in the first 

interview, holding constant the usual demographic variables that are used 

in weighting adjustments? The panel is not aware of research exploring this 

potential source of bias.

A key opportunity for the future: BLS can use households that provide 

partial data (i.e., attritors or intermittent responders), along with their level 

and pattern of expenditures, in the adjustment for missing waves. It is the 

panel’s understanding that the nonresponse adjustments employed by BLS 

use post-stratification adjustment to population controls in a cross-sectional 

adjustment and do not make use of the household’s expenditure data from 

other interviews. While this may be hard to do given the need to produce 

quarterly estimates, the panel nature of CE interview data provides a rich 

source of information to better understand patterns of nonresponse and 

potential nonresponse bias. Such information can also be used to target efforts to minimize nonresponse error in responsive design strategies (Olson, 

2011).

The Diary survey also incorporates a panel design that interacts with 

the issue of attrition. Each selected household is asked to complete two 

waves of data collection, each wave being a one-week diary. Even though 

the waves are adjacent weeks from the same households, the estimation 

process considers each wave as an independent collection. A general issue with diary surveys is that compliance tends to deteriorate as the diary 

period progresses, that is, there is high compliance at the beginning of the 

period and less toward the end. The panel has not seen specific research 

on this issue for the CE Diary, but it is likely that there is less compliance 

during the second wave than in the first wave. This may be particularly true 

in households in which both diaries are placed at the same time without an 

intervening visit from the field representative. Without adjustment during 

the estimation process, it is possible that the lower reported expenditures 

in wave 2 will bring down the overall level of expenditures reported from 

the Diary survey.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 105

Disproportionate Nonresponse

Having a high proportion of the initially sampled individuals respond 

to the survey may lead to higher quality data; however, it is neither a sufficient nor necessary condition. King et al. (2009) reported on four studies 

to examine potential nonresponse bias in the CE. One of these studies was 

discussed above. Even though the studies showed that the nonresponse was 

not missing completely at random (African Americans are underrepresented 

among the respondents, and those over 65 years old are overrepresented), 

they did not find measurable bias in estimating total expenditures due to 

the nonresponse.

A more recent study suggests a potential bias related to underrepresentation of the highest income households (Sabelhaus et al., 2011). The 

authors began by comparing CE estimates of income and the distribution 

of income with other relevant data sources such as the Current Population 

Survey, the Survey of Consumer Finances, and tax return–based datasets 

from the Statistics of Income. These comparisons show that the CE has 

relatively fewer completed surveys from households with income $100,000 

or greater. The authors also showed that the average income estimated per 

household for this highest income group is substantially below the estimated average from these other sources.10

The authors demonstrated by comparing the CE sample to geocoded 

tax data that higher income units are less likely to respond on the CE and 

are underrepresented even after weighting, while units at lower levels of 

income are adequately represented. While there is not a large difference in 

the total population counts, the underrepresentation of the upper income 

groups could lead to an undercount of income in the higher income levels 

and consequently also to understating the aggregate level of spending. They 

have concern because these high-income households may have a different 

mix of expenses when compared to other households. This differential 

could affect the relative budget shares calculated for the CPI. The authors 

speculate that a significant portion of the difference between CE aggregate 

spending and PCE spending might be accounted for by the nonresponse of 

higher income consumer units. They concluded that:

Only the very highest income households seem to be under-represented in 

the Consumer Expenditure Survey (CE), and the mystery of overall underreported spending in the CE is not fully explained by that shortcoming. 

At least some of the shortfall in aggregate CE spending seems attributable 

10Greenlees, Reece, and Zieschang (1982) carefully analyzed nonignorable income nonresponse (nonresponse related to the variable being imputed) using matched microdata from the 

CPS and IRS. They demonstrated clearly the problem that nonignorable nonresponse imposes.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

106 MEASURING WHAT WE SPEND

by under-reported spending by at least some CE respondents. (Sabelhaus 

et al., 2012, p. 21)

Conclusion 5-15: Nonresponse is a continuing issue for the CE as it 

is for most household surveys. The panel nature of the CE is not sufficiently exploited for evaluating and correcting either for nonresponse 

bias in patterns of expenditure or for lower compliance in the second 

wave of the Diary survey. Nonresponse in the highest income group 

may be a major contributing factor to underestimates of expenditures.

ISSUES REGARDING NONEXPENDITURE DATA

The use of the CE data for economic research provides the impetus for 

collecting data on demographics, income, investment, and savings at the 

household level in the CE. The panel identified several issues in the current 

CE with these types of data that make the research process more difficult.

Reporting Periods for Income, Employment, and Expenditures

Ideally, researchers would like to have expenditures, income, and employment for responding households collected over the same reporting 

periods. The current Interview survey collects expenditure information for 

each of four quarters during a year. Income and employment information 

is collected for the previous 12 months, but only during the second and 

fifth interview. The current Diary survey collects expenditure data for two 

weeks, but income and employment data for the previous 12 months. The 

inconsistency of the collection periods for these different types of data can 

make it difficult to reconcile large differences in expenditure and income at 

the household level when these differences occur. While researchers have 

expressed the importance of having all data (including expenditures and 

income) collected over the same reference period, some panel members 

have expressed the opinion that it is also important to allow respondents 

to report for a period for which they can do so most accurately.

Demographics and Life Events

Examining the impact on household spending due to a variety of 

stimuli is important in the economic research done using the CE data. When 

changes occur, it is difficult to reconcile changes in expenditure and income 

without information about whether an individual household has undergone 

a major life event (e.g., marriage, divorce, or change in employment status) 

sometime during the year. The current CE collects relatively limited infor-
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

WHY REDESIGN THE CE? 107

mation on these major life events. For example, the CE Interview survey 

does not collect changes in job status (and the reason for those changes) 

between survey waves.

Linking with Administrative Data Sources

The ability to link CE data to relevant administrative data sources (such 

as IRS data or data on program participation) could provide additional 

richness for economic research as well as providing potential avenues to investigate the impact of nonresponse on the survey results. Data confidentiality procedures have presented barriers to such linkage. Some success in this 

area has been achieved by some other federal surveys that ask respondents’ 

permission to match their survey responses with administrative data. Some 

surveys have experimented with an “opt out” version, where respondents 

can say that they do not want the matching to occur (Pascale, 2011). These 

strategies would be useful to try for the CE.

Conclusion 5-16: For economic analyses, data on income, saving, and 

employment status are important to be collected on the CE along with 

expenditure data. Aligning these data over time periods, and collecting 

information on major life events of the household, will help researchers 

understand changes in income and expenditures of a household over 

time. Linkage of the CE data to relevant administrative data (such as 

the IRS and program participation) would provide additional richness, 

and possibly provide avenues to investigate the effect of nonresponse.

SUMMARY OF REASONS TO REDESIGN THE CE

This chapter specifically addresses the issues upon which the panel 

bases its recommendations in Chapter 6 to redesign the CE. The CE surveys 

appear to suffer from underreporting of expenditures. This conclusion is 

based on comparison of the CE estimates to several sources, but primarily to the PCE. The panel does not consider the PCE as “truth,” but does 

consider the results informative. The comparisons were made considering 

categories of expenditures with comparable definitions between the CE and 

PCE. The overall pattern indicates that the estimates for larger items from 

the CE are closer to their comparable estimates from the PCE. The current 

Interview survey estimates these larger items more closely to the PCE than 

does the current Diary survey. For 36 smaller categories, neither the Interview survey nor the Diary survey consistently produces estimates that have 

a high ratio compared to the PCE. Thus, the panel concluded that there are 

underreporting issues with both the CE Diary and CE Interview surveys and 
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

108 MEASURING WHAT WE SPEND

proceeded to review response and nonresponse issues that could contribute 

to this underreporting.

Before examining sources of potential response errors in the Interview 

survey and Diary survey separately, the panel observed that the mode, 

questions, and context used in the Interview survey and Diary survey are 

quite different. Therefore, one ought to expect differences, both in issues 

that need to be addressed and in the estimates obtained. It is therefore not 

surprising that different amounts are reported in the Interview and Diary 

in this situation, and that these differences are not always in the same 

direction.

The panel examined potential sources of response error in both surveys. 

They concluded that both the Interview and Diary surveys have issues with:

•	 motivation of respondents to report accurately,

•	 structure of data collection instruments that leads to reporting

problems,

•	 recall or reporting period, and

•	 proxy reporting.

Additionally, they expressed concern about the infrequent use of records in 

the Interview survey that is less relevant to a concurrent mode of collection.

The Interview and Diary surveys have similar response rates of 73 to 72 

percent. These rates are lower than for some important federal surveys, but 

appear to be better than consumer expenditure surveys in some other western countries. There is concern about attrition within the panel designs for 

both surveys, as well as concern about the effect of disproportionate nonresponse from the segment of the population in the highest income groups.

In sum, there are response and nonresponse issues with both the concurrent (Diary) and recall (Interview) collection of data in the CE as currently 

implemented. The panel does not conclude that one method is intrinsically 

better or worse than the other. However, it does believe that different approaches to these methods have the potential to mitigate these problems.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

6

Pathway to an Improved Survey

This final chapter is based on the information and analysis in previous chapters of the report. It describes three potential prototypes to consider in redesigning the Consumer Expenditure Surveys (CE) and 

offers recommendations to the Bureau of Labor Statistics (BLS) from the 

Panel on Redesigning the BLS Consumer Expenditure Surveys on research 

and other inputs needed in redesigning the CE.

OVERVIEW

The CE has many purposes and a diverse set of data users. This is 

both the strength of the program and the foundation of its problems. The 

CE program tries to be “all things to all users.” The current design creates 

an undesirable level of burden on households and quality issues with its 

data. The Interview survey asks respondents for a very high level of detail 

collected over an entire year, with potentially counterproductive effects on 

their motivation and/or ability to report accurately. Because the Interview 

survey had been deemed not to satisfy all user needs, the program also 

includes the Diary survey. The Diary survey supplies much of the same 

information but at an even higher level of detail over a shorter period of 

time by using a different collection mode and a different set of respondents. 

However, Diary respondents appear to lack motivation to report consistently throughout the two-week collection period. Unfortunately, these two 

surveys are designed independently so the resulting data are not statistically 

consolidated to achieve their potential precision and usefulness.

The Consumer Price Index (CPI) drives the level of detail asked in the 

109
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

110 MEASURING WHAT WE SPEND

current CE surveys. The CPI is a Principal Economic Indicator of the United 

States and a crucial user of the CE. The CPI currently uses CE data for 

over 800 different expenditure items to create the budget shares required 

for those indexes. Most, but not all, budget shares come from the CE. In 

theory, a number of survey designs can provide the information required by 

the CPI, collecting a significant level of expenditure data without inflicting 

the level of burden on households that the current CE does. These designs, 

including a number of “matrix type” sample designs, involve asking each 

household only a portion of the total detail required while using weighting and more sophisticated modeling to produce the needed estimates. 

The data from these types of designs can provide the needed level of detail 

with appropriate precision needed by the CPI but with less burden on each 

household (Eltinge and Gonzalez, 2007; Gonzales and Eltinge, 2008, 2009). 

This family of designs would also meet most of the needs of government 

agencies in program administration and would allow BLS to continue to 

publish standard expenditure data tables. However, these types of designs 

are not optimal for other uses of the CE.

Researchers and policy analysts use the CE microdata to examine the 

impact of policy changes on different groups of households and to study 

consumers’ spending habits and trends. Many such uses are described in 

Chapter 2. These data users generally do not need the same level of item 

level detail required by the CPI. To them, the value of the CE lies in the 

“complete picture” of demographics, expenditures, income, and assets all 

collected for the same household. A comprehensive set of data at the household level allows microdata users to look at the multivariate relationships 

between spending and income in different types of situations for different 

groups of households. These data users also use the “panel” component 

of the CE, which provides the same information for a given household 

over multiple quarters. Parker, Souleles, and Carroll (2011) and Chapter 4 

(“Feedback from Data Users”) further describe the usefulness of panel data 

in this type of analysis.

The multiple and divergent CE data uses are difficult to satisfy efficiently within a single design. Survey designs always involve compromise, 

and the current CE design tries to provide the breadth and detail of data to 

meet the needs of all users and then compromises by accepting the heavy 

burden and unsatisfactory data quality that emerges. The panel recommends 

that BLS redesign the CE only after rethinking what those compromises 

should be so that the trade-offs associated with redesign possibilities can 

be articulated and assessed within a well-developed priority structure. Determining these types of priorities for the CE is ultimately the responsibility 

of BLS, and is beyond what would be appropriate or realistic for the panel 

to undertake. Therefore, the panel makes the following recommendation:
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PATHWAY TO AN IMPROVED SURVEY 111

Recommendation 6-1: It is critical that BLS prioritize the many uses of 

the CE data so that it can make appropriate trade-offs as it considers 

redesign options. Improved data quality for data users and a reduction 

in burden for data providers should be very high on its priority list.

The panel recommends a major redesign of the CE once the priorities 

for a redesign are established. In its work, the panel concluded that many 

response and nonresponse issues in both the Diary and Interview surveys 

create burden and lead to quality problems with the expenditure data. The 

panel has concluded that less invasive cognitive and motivational corrections that might be made to improve recall and the reporting of specific 

expenditures would most likely increase overall burden. Since burden is 

inextricably connected with much of the survey’s problems, increasing it 

would be counterproductive.

Recommendation 6-2: The panel recommends that BLS implement a 

major redesign of the CE. The cognitive and motivational issues associated with the current Diary and Interview surveys cannot be fixed 

through a series of minor changes.

The charge to this panel was to provide a “menu of comprehensive 

design options with the highest potential, not one specific all-or-nothing 

design” (see Appendix B). Before BLS sets prioritized objectives for the CE, 

the panel’s most effective course of action is to suggest alternative design 

prototypes, each of which has a higher potential for success when enlisted 

to achieve a different prioritized set of objectives.

With that said, these prototypes share much common ground. The 

statistical independence of the current interview and diary samples is eliminated. The prototypes orient data collection methods toward an increasingly computer-literate society in which new tools can make the reporting 

tasks easier for respondents while providing more accurate data. The new 

prototypes are geared to increase the use of records and decrease the effects 

of proxy reporting. There is an increased emphasis on self-administration 

of survey components, while creating tools and an infrastructure that will 

monitor and support the respondent in these endeavors. The field representatives’ role will still be important in directly collecting data, but their role 

will grow to also provide support in additional ways. The panel proposes 

incentives that will increase a respondent’s motivation to comply and report 

accurately.

Finally and most importantly, all three prototypes propose new procedures and techniques that have not been researched, designed, and tested. 

The prototypes that the panel offers are contingent upon new research un-
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

112 MEASURING WHAT WE SPEND

dertakings and rigorous assessment. There is a lot of relevant background 

theory and research available, and the BLS research program and Gemini 

Project deserve praise for much of that work. However, the panel wishes to 

state clearly that the empirical evidence on how well each of the proposed 

prototypes would work is missing. As with the current CE surveys, the 

new prototypes include some diary-type data collection and some recalltype data collection. They include some self-administered data collection 

and some interviewer-assisted data collection. Notwithstanding, the new 

prototypes are sufficiently different from the current CE surveys that BLS 

cannot and should not use the current CE to extrapolate how well these 

prototypes will work in regard to response, accuracy, and underreporting. Considerable investment must be made in researching elements of the 

proposed designs, to find specific procedures that not only are workable 

but also are most effective. Some ideas will ultimately be successful, while 

others will be shown to have serious flaws. The critical point is that these 

prototypes are not operationally ready, and the process of selecting a prototype or components of a prototype for implementation should be based 

not only on BLS’ prioritization of goals of the CE, but also on empirical 

evidence that the proposed procedures can meet those goals.

Recommendation 6-3: After a preliminary prioritization of goals of the 

new CE, the panel recommends that BLS fund two or three major feasibility studies to thoroughly investigate the performance of key aspects 

of the proposed designs. These studies will help provide the empirical 

basis for final decision making.

Issues related to nonexpenditure items on the CE were discussed in 

detail in Chapter 5. These issues include such things as synchronization of 

expenditure and nonexpenditure items over similar reference periods, and 

collecting changes in employment status and other life events. These types 

of issues are important to the research uses of the CE. The panel offers the 

following recommendation that should be viewed within the context of BLS 

prioritization of the goals of the CE.

Recommendation 6-4: A broader set of nonexpenditure items on the 

CE that are synchronized with expenditures will greatly improve the 

quality of data for research purposes, as well as the range of important 

issues that can be investigated with the data. The BLS should pay close 

attention to these issues in the redesign of the survey.

With a new design, some existing uses of data may fall by the wayside. 

New and important uses will emerge. BLS has a talented and knowledgeable staff of statisticians and researchers who have worked with the CE 
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

PATHWAY TO AN IMPROVED SURVEY 113

for many years. They understand the survey well, and the cognitive issues 

described by the panel are not a surprise to that staff. Using the framework 

that the panel has put forward, BLS statisticians will be able to pull together 

and test the specific details of a redesign that is appropriate for BLS’ collective priorities, budget, and time frame.

The rest of this chapter describes the three different prototypes, with 

many commonalities but each with its own focus. A more detailed discussion of those commonalities comes first, and then the report describes and 

compares the three prototypes. The final sections of the chapter begin a 

roadmap for moving toward a new design, including a discussion of important research issues.

PANEL’S APPROACH TO DESIGN AND THE 

COMMONALITIES THAT EMERGED

The panel considered many approaches to a redesign of the CE, and 

sorted through those numerous options by focusing on the following 

fundamentals:

•	 Improve data quality.

•	 Be mindful that the resources (both out-of-pocket and staff) available to support this survey are constrained.

•	 Be mindful that the survey processes have to be workable across the

entire population of U.S. households—the more distinct processes 

that need to be designed for different population groups, the more 

resources will be required.

•	 Keep it simple—to the extent possible.

•	 Provide respondents with relief from the current burden level of the

CE.

•	 Provide respondents with sufficient motivation to participate.

•	 Support the use of records and receipts.

•	 Support the current uses of the CE to the extent possible, and

provide options in support of the prioritization of those uses in the 

future.

•	 Utilize newer data collection methodology and external data

sources when supportive of the above fundamentals.

It is not reasonable for the panel to discuss all of the options that they 

considered and laid aside, but this section of the report is intended to illuminate the concepts and strategies that emerged with broad consensus during 

discussion of some of the major decision points in the panel’s deliberations. 

These commonalities can be seen in the design of the three prototypes.
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114 MEASURING WHAT WE SPEND

Implement a Major Integrated Redesign

The panel came to an early conclusion that the cognitive issues with the 

existing surveys cannot be fixed with minor corrections, and it would be a 

mistake to focus independently on the various cognitive issues addressed 

in this report. The best approach is an overall redesign of the CE, with 

component pieces being shaped to minimize these cognitive problems at 

each phase of data collection.

The sample design for the new CE should be developed with a view 

toward integrating sample panels and data collection periods on a panel via 

statistical modeling in the estimation process, rather than generating independent estimates for each panel and data collection period. This method 

ensures that all data collected within the design can be fully utilized to 

minimize variance of estimates by capitalizing on the temporal components 

of the design or by integrating sample panels that collect different, but 

related variables from respondents. It may be possible that sophisticated 

sample designs along with appropriate modeling can provide needed data 

products with reduced burden on respondents. In investigating this possibility, it will be important to avoid creating household-level data with such a 

complicated structure of measurement error or statistical dependencies that 

it makes research use very difficult. At least, any reductions in possible use 

of the data need to be consistent with newly clarified BLS priorities.

Reduce Burden

The extreme detail associated with the current CE, and the amount of 

time and effort it takes to report those details, are major causes of underreporting of expenditures. These need to be significantly reduced for most 

respondents. The panel identified a number of ways to reduce burden, and 

more than one burden-reducing concept is included in each redesign prototype. Burden-reducing opportunities include (1) reducing the overall detail 

that is collected on expenditures, income, and/or assets; (2) asking details 

(or certain sets of details) to only a subsample of respondents, providing 

burden relief for the remaining sample; (3) reducing the number of times a 

household is interviewed or the number of tasks they are asked to do; (4) 

reducing the overall sample size and using more sophisticated estimation 

and modeling to maintain levels of precision; and (5) making response cognitively and physically easier. The panel spent considerable time identifying 

ways to reduce burden. It realizes that several of these options may be at 

odds with collecting a complete picture of income and expenses from each 

individual household over longer reporting periods. This is why it is essential for BLS to further clarify its priorities for data uses, recognizing that 

one survey cannot satisfy all of the possible data users.
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PATHWAY TO AN IMPROVED SURVEY 115

Use Incentives to Increase and Focus Motivation

The CE surveys are very complex and burdensome, and even with 

the burden-reducing changes, the CE will remain a difficult challenge for 

households. Respondents currently have little motivation to respond, or 

more precisely to respond accurately, on the CE. The panel anticipates that 

respondents will have additional responsibility under a redesign to keep and 

record expenditures. The panel collectively agreed that respondents needed 

greater motivation to carry out these tasks and proposed that an incentive 

structure composed of monetary and nonmonetary incentives should be 

developed and implemented. The structure should be based on the amount 

of effort asked of a respondent and used to effectively encourage recordkeeping and reporting from those records. The panel speculated that the 

incentive payments would need to be fairly large to effect the needed motivation to report accurately. Components of an effective incentive program 

are discussed in more detail later in this chapter.

Support Accurate Use of Records

The panel envisions a redesign that will increase the respondents’ use 

of records in reporting expenses. This can be accomplished in a variety of 

ways. In the three prototypes, incentives are offered. There is an increased 

emphasis in each prototype to incorporate supported self-administration in 

a way that provides a structure to promote accurate reporting and increased 

use of records. This means incorporating flexibility to allow respondents to 

provide data at a time and in a way that is most convenient for them, and 

to answer questions in the order that they prefer. It means redesign of data 

collection instruments (whether self-reports and interviewer-driven, paper 

or electronic), technology tools, training, reinforcement, and incentives to 

facilitate recordkeeping. Minimizing proxy reporting in the reporting of 

detailed information is another improvement that can lead to more accurate 

reporting and use of records and receipts.

Redesign Survey Instruments

The new CE will need to redesign data collection instruments so that 

they simplify the respondent’s task. The panel sees a movement toward 

self-administered data collection with the field representative acting in a 

support role. However, the prototypes also incorporate interviewing by 

field representatives. Even though the panel envisions a wide acceptance of 

tablet-based interfaces, paper instruments will be needed for the foreseeable 

future. The current instruments may not suffice for this purpose.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

116 MEASURING WHAT WE SPEND

Increase Use of Self-Administration

The panel discussed the advantages and disadvantages of various collection modes, and considered changes from the current CE surveys. The 

panel expressed concern about the shift in the current CE toward telephone 

data collection (primarily due to constrained resources), and felt this was 

not the best shift for data quality. The panel’s final recommendations move 

toward self-administration of these complex surveys. There are several 

reasons for this shift. The first is to encourage the use of records as discussed in the paragraphs above. This mode allows respondents to provide 

data in a way and at a time that is most convenient for them. When paired 

with an appropriate incentive structure, it can encourage respondents to 

take the time needed to use those records and receipts. A second reason is 

to take advantage of newer technology that can allow consistent, remote 

monitoring of self-administered data collection without the cost of having 

an interviewer present.

Reduce Proxy Reporting

The current CE surveys use proxy reporting because of the additional 

cost associated with working separately with multiple survey respondents 

within a household. The panel looked for solutions that will allow (and 

encourage) individual members of a household to report their expenditures 

without the accompanying increase in cost. The solution is a shared household tablet that each member of the household can use to enter expenses, 

but there is still a “primary household respondent” who oversees the entire 

process. This solution does not provide confidential reporting, and thus 

does not solve the problem when household members are reluctant to share 

details of certain expenditures with other household members. However, 

it does have the potential to eliminate much of the current proxy report 

process with minimal added cost per household.

Utilize Newer Data Collection Technology

The time is right to emphasis new technological tools in data collection. This is an essential component of the panel’s concept of supported 

self-administration. The panel discussed many technological alternatives 

and found one tool that was particularly appealing to the panel across a 

variety of designs—the tablet computer. The panel proposes the use of tablets in each of its redesign prototypes as an effective data collection tool. 

Lightweight and easy-to-use tablets represent stable (robust) technology, 

are commonplace, feature more than sufficient computing power, and are 

economical in price. The panel envisions that the tablet would sit on the 
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PATHWAY TO AN IMPROVED SURVEY 117

kitchen counter and be used by multiple household members in a “shared” 

approach to recording expenditures.

The panel also considered such alternatives as Web-based data collection, smart phone apps, and portable scanners for receipts. All are 

interesting tools and potentially could be used together in a redesigned 

CE. However, the panel stuck with its fundamentals—keep it simple and 

be mindful that the survey processes have to be workable across the entire 

population of U.S. households and that each additional approach (tool) will 

require additional resources to build and support. The panel looked for the 

one tool with the most potential.

Web data collection is not that tool. The Bureau of the Census (2010) 

estimated that only 44 percent of all U.S. households had Internet access either within or outside the home. This percentage varied greatly by 

household demographics and income. So requiring Internet access to use 

the electronic instrument would relegate the majority of households to the 

“paper” option. Additionally, building high quality Web-based instruments 

that work on multiple platforms (different computers, different browsers, 

high-speed versus dial-up Internet access, smart phone browers) can be very 

resource intensive. By providing the tablet to the household, BLS would be 

developing for a single platform, and the panel hypothesizes that a substantially greater percentage of households will be able to use the tool than if 

BLS relied on Web collection.

The panel saw similar issues with using smart phone apps—lack of 

coverage of the population of households, and considerable variability in 

hardware and software platforms. These devices are growing in popularity, 

but BLS would have to develop and maintain multiple versions even for use 

within the same household.

Portable scanners would allow respondents to scan receipts and upload 

them to a waiting file. These devices could be used along with the tablet PC 

for use in recording receipts. However, the array of formats and abbreviations that are used on printed receipts would likely require considerable 

intervention after the scanning to properly record each expenditure. Adding these scanners to the household would also require additional training.

The use of technology tools, and the tablet PC in particular, is discussed 

in more detail later in this chapter. The panel will recommend that BLS 

begin using this one simple tool, knowing that its implementation will be 

challenge enough for the short run.

Use Administrative Data Appropriately but with Caution

The potential use of external records or alternative data sources as a 

replacement or adjunct to current survey data for the CE is often raised in 

discussions of a CE redesign. Whether at the aggregate or the micro level, 
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118 MEASURING WHAT WE SPEND

the appeal of “readily available” information appears, at first glance, to be 

low-hanging fruit. Although such information might hold great promise, 

upon closer inspection the panel also realized that use of these data is accompanied by increased risk and significant resource outlays. There is a 

cost/quality/risk trade-off that needs to be fully investigated and understood.

The panel discussed the potential use of these external data at the micro 

level and identified several concerns: Permission from household members 

to access such things as personal financial data, utility bills, and shopping 

data (loyalty card) would be difficult to obtain and thus replace only a 

small percentage of survey data; BLS would have to develop an in-house 

infrastructure to access and process data from each external source (this 

would be a significant drain on available resources); and BLS would have 

to continue to field a complete survey for the majority of households. That 

said, there are scenarios under which these data could be quite useful, particularly at a more macro level. However, caution is warranted. This subject 

is discussed in greater detail later in this chapter.

Create a Panel Component and Measure Life Event Changes

Economic analysts utilize the panel component of the current CE in 

much of their research. The report incorporates a panel component (with 

data collection from the same households at a minimum of two points 

in time) within each of the three prototypes. Each design also includes a 

re-measurement of income and “life events” (such as employment status, 

marital status, and disability) at each wave. However, the panel components 

differ considerably from design to design in the length of the response period, and this will significantly affect their relative usefulness in economic 

research. Of the three prototypes described, Design B has the most comprehensive panel component, with three waves and a response period of 

six months for each wave. Design C has two waves with a response period 

of three months for each wave. Design A has two waves, but with more 

variable response periods for each wave.

REDESIGN PROTOTYPES

In this section, the panel presents three specific redesign prototypes. 

All three designs meet the basic requirements presented in Consumer 

Expenditure Survey (CE) Data Requirements (Henderson et al., 2011). 

All three prototypes strive for increased use of records, incorporate selfadministration (supported by the field representative, a tablet computer, 

and a centralized support facility) as a mode of data collection, and use 

incentives to motivate respondents. All three prototypes continue to use 

field representatives for interviewing and other support, and they all feature 
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PATHWAY TO AN IMPROVED SURVEY 119

either a single sample or integrated samples. However, each prototype is 

different—a better fit for a specific use of the data. BLS needs to prioritize 

the various data requirements of the CE and move toward a redesign that 

is best for its carefully considered prioritization. In overview,

•	 Design A focuses on obtaining expenditure data at a detailed level. 

To do this, the panel proposes a design with concurrent collection 

of expenditures through a “supported journal”—diary-type selfadministered data collection with tools that reduce the effort of 

recordkeeping while encouraging the entry of expenditures when 

memory is fresh and receipts available. It also features a selfadministered recall survey to collect larger and recurring expenses 

that need a longer reporting period. This design collects a complete 

picture of household expenses but with reports over different reporting periods.

•	 Design B provides expenditure data for 96 expenditure categories, rather than the more detailed expenses provided by Design 

A, but provides a complete picture of household expenditures 

over an 18-month period. It builds a dataset that would be excellent for economic and policy analysis. This design makes use of 

a recall interview coupled with a short supported journal. Two 

subsequent contacts with the same households are made over 13 

months, repeating the original data collection using supported selfadministration to the extent possible. This design also recommends 

that a small subsample be subsequently interviewed intensively over 

the following two calendar years, with collation of records, the use 

of financial software, and emphasis on a budget balance. This is 

discussed separately at the end of the description of Design B.

•	 Design C incorporates elements of both Designs A and B. It collects the detail of expense items as in Design A, while providing a 

household profile for six months. To do both, it uses a more complex sample design, collects different information from different 

samples, and requires more extensive use of modeling to provide 

expenditure estimates and the household profile.

Design A—Detailed Expenditures Through Self-Administration

This prototype features a sample of households with two data collection waves, each of which features the concurrent reporting of expenditures 

over a two-week period using a supported journal. The design also incorporates a self-administered recall survey for larger, less frequent expenses. The 

design maximizes the use of supported self-administration and concurrent 

reporting of expenses. Figure 6-1 provides a flow outline of Design A.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

120

Fig6-1.eps

landscape

Design A—Detailed Expenditures Through Self-Administration 

Initial contact in person 

• Assess household and train • Assist respondent in completing 

demographics and life event module 

Tablet left with household 

Repeat in 3 months for wave 2. 

During following 2 weeks, respondent completes supported journal: 

• Income module • Large and routine expense module• Ongoing expenditure module (for 2 

weeks) 

Real-time upload of data. 

Responsive Monitoring 

Household returns tablet or  paper journal. Mostly by mail.

FIGURE 6-1 Process flow for Design A—Detailed Expenditures Through Self-Administration.
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Objectives

The objective in Design A is to maximize the benefits that can be derived from self-administration in a new era of effective tablet computing 

and modular interface design. The idea is to simplify the respondent’s task, 

to allow respondents to provide data at a time and in a way that is most 

convenient for them, and to answer questions in the order that they prefer. 

In doing so, the panel believes that the survey can collect detailed expenditures accurately with reduced burden on respondents. The goals are to

•	 promote accurate reporting of detailed expenditure data by allowing sufficient time and space for careful enumeration of expenditures while using records and receipts;

•	 reduce the effort it takes to report those expenditures by providing

support and technology tools; and

•	 reduce respondents’ tendencies (often implicitly encouraged in current methods) to estimate, guess, satisfice, or underreport.

Key Assumptions

Design A makes several key assumptions about the collection of consumer expenditure data:

•	 Detailed data for many items can best be obtained by supported

concurrent self-administration, and a tablet-type device can assist 

in keeping the supported journal for most households.

•	 Interfaces for tablet-based applications (apps) will follow the best

and newest principles of app design and testing, rather than simply 

importing or modifying current computer-assisted self-interview 

(CASI) technology and software.

•	 There will be a low refusal rate for use of the tablet given effective

software and interface implementation.

•	 A two-week tablet-based reporting period for recording ongoing

purchases is a plausible period. Households will be willing to participate in a second wave.

•	 For expenditures that must be recalled, different recall periods are

appropriate for different categories of expenses.

•	 It is desirable to build alternative recall prompts or cues for different respondents who may have different ways of mentally organizing expenditures and/or different strategies for recalling them.

•	 The current set of income, asset, and demographic questions are

reduced to only the essential items.

•	 Monetary incentives are available for respondents.
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122 MEASURING WHAT WE SPEND

Sample Design

A single sample of households would be selected each quarter, with 

data collection initiated for a portion of the sample every two weeks within 

the quarter. A second wave of data collection for this same sample would 

take place in the subsequent quarter, with all responding households asked 

to participate for a second two-week collection period. Thus, for any given 

quarter, one independent sample would be initiated into wave 1 of the 

design, and a second sample would be brought forward from the previous 

quarter for wave 2 data collection.

Data Collection: Modes and Procedures

The predominant mode used in Design A is self-administered using a 

tablet PC. The data collection interface on the tablet would be modular, 

with flexibility on entering information in any desired order, with four 

modules:

•	 Demographics and Life Events Module: demographics and other 

information about the household. For wave 2, the questions would 

be modified to ask about key “life events” that might have transpired over the previous quarter.

•	 Ongoing Expenditures Module: for recording ongoing expenditures by household members during the two-week period.

•	 Large and Routine Expense Module: for reporting larger and routine expenses that may not be effectively measured during a twoweek collection period.

•	 Income Module: household income, assets, and “labor force status” questions.

Navigation of the interface across and within the different modules 

would be streamlined and transparent for users of a wide range of backgrounds. The model for the interface would be “TurboTax” (commercially 

available tax preparation software) rather than the linear flow methodologies of today’s self-administered questionnaires. This means that the app 

would be built in modules and the user could choose to fill in the information in any order that is convenient. The user could also come back to any 

item and make a change at any time. Alternatively, the user (respondent) 

could choose to use a structured interview approach for moving step-bystep through the app.

During the initial in-person contact with the household, the field representative would identify the main “household respondent” and assist him 

or her with completing the Demographics and Life Events Module on the 
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tablet. The content of this first instrument would include standard demographics plus other items to assist in tailoring data collection instruments 

and estimation in the event that the household drops out of the panel, such 

as the number and age of household members, income bracket, purchasing 

habits, and use of online payments.

The first meeting also allows the field representative to assess whether 

the respondent (1) can be fully self-sufficient in using the tablet for later 

data collection, (2) will need additional support and monitoring during 

the next two weeks, or (3) would be likely to have severe difficulty with 

or refuse to use the tablet. The goal is to encourage the use of the tablet as 

much as possible while maintaining data quality.

Proxy reporting would be reduced by encouraging household members 

to record their own day-to-day expenditures in the Ongoing Expenditures 

Module during the two-week reporting period. The household respondent 

would guide the other household members in using this simple module. 

There would be no separate identification numbers to compartmentalize 

each member’s entries.

The household respondent would be asked to complete the Large and 

Routine Expense Module and the Income Module at his/her convenience 

during the two-week period. This allows the household respondent the time 

to review the questions and gather records. The Large and Routine Expense 

Module would ask about major purchases or periodic expenses such as 

automobiles, appliances, and college tuition. This module would also ask 

about routine expenses such as utility bills, mortgage payments, and health 

insurance payments. Respondents would be given alternative ways of entering the data that reflect reporting periods that correspond to their records. 

The Income Module would ask basic questions about household income 

and assets with a recall period that is most convenient for the respondent 

to report accurately. It would include information about changes in assets 

over the year.

At the end of the two-week period, respondents mail the tablet back. In 

some cases, a field representative visit may be needed to ensure the return 

of the tablet and capture key missing data. The Demographics and Life 

Events Module, the Large and Routine Expense Module, and the Income 

Module would be appropriately modified for a household’s second wave 

of data collection.

Frequency and Length of Measurement

Design A features two waves of data collection, each two weeks long, 

one quarter apart. All households are included in both waves of the panel. 

At a convenient time during the two-week reporting period, respondents 
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124 MEASURING WHAT WE SPEND

report larger and routine expenditures and income and assets via selfadministered modules.

Recall Period

For the Ongoing Expenditures Module, household members enter purchases during the two-week period. Ideally respondents will enter data 

every day or almost every day. Different members of the household would 

be able to record their own expenditures. The centralized facility would be 

able to monitor and intervene if households do not enter data regularly or 

if there is evidence of poor data quality.

For the Large and Routine Expense Module, the recall period would 

vary between annual, quarterly, and monthly for different domains of expenditure, depending on which period has been shown to lead to the easiest and most accurate reporting. Within a single domain of expenditure, 

respondents may be given alternative ways of entering the data that reflect 

reporting periods that are easiest to provide based on the records to which 

they have access. In other words, the burden of recalculating amounts or 

recall periods for the needs of the survey is placed in the tablet software or 

centralized processing systems, and not the respondent.

The recall period for income and assets questions would be set to 

minimize measurement error and support estimation needs. This period is 

described as that which is most convenient for the respondent to report accurately while being close to the reporting period for expenditures.

Incentives

A guideline for incentive use is presented further in this chapter. In Design A, the panel estimates that $200 in incentives would be required per 

household ($100 for each two-week data collection period).

Role of Field Representative

The field representative’s role changes radically in Design A, from being the prime interviewer and data recorder to being the facilitator who 

encourages, trains, and monitors in support of the respondent’s thoughtful 

and accurate data entry. In this shift, the design attempts to change the 

burden and motivational structure of the current methods of collecting 

expenditure data. This entire process is described in more detail in “Using 

the Tablet PC for Self-Administered Data Collection” on p. 157. The role 

of the field representative will vary for households that use the papersupported journal, and also across different tablet households depending 
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on their comfort with the technology, willingness to use records, and 

household composition.

Role or Expectations of the Respondent

From the respondent’s perspective, Design A makes it possible for the 

survey instrument to be tailored to his/her particular needs: expenditure 

context, comfort with technology, access to and format of records, preferences in reporting format, and preferred recall cues.

The design proposes a modern modular interface that has the simplicity, 

guidance, and intuitiveness of the TurboTax interface, rather than adhering to constrained traditional survey interfaces most often used today. This 

means that the app would be built in modules, and the user could choose 

to fill in the information in any order that is convenient. The user can also 

come back to any item and make a change at any time. Alternatively, the 

user (respondent) could choose to use a structured interview approach for 

moving step-by-step through the app.

The tailoring includes a paper alternative, with new forms of support 

for the respondent, if necessary. The design also gives respondents the opportunity to get 24/7 real-time support, exactly when they need it, as they 

record their expenditures and answer recall questions.

In this design, the respondent takes on the primary role of providing 

the most accurate data possible, supported by records to as great extent as 

possible. What differs from the respondent’s current role in the interview 

is that the respondent (after the initial meeting with the field representative) controls the time, pace, and order of data recording. In this sense, the 

design implicitly supports the idea that providing accurate data will take 

time and thoughtfulness. What differs from the respondent’s current role 

in the diary is that the respondent is provided an easy-to-use entry device 

augmented by ongoing interactive encouragement and support from both 

the interface and from remote support staff.

While in one sense, the respondent in the proposed design has greater 

responsibility (and support) than required in current expenditure surveys, 

in another sense the locus of responsibility is more distributed than before: 

among the respondent, field representative, and remote monitors (and, in 

a way, the interface designers and researchers). The respondent’s role thus 

includes being aware of and taking advantage of as much remote or inperson support as is needed to allow accurate data reporting.

Post–Data Collection Analysis

Data collected through the tablet (demographics, expenditures, and 

income/assets) would be complete and in an appropriate format for pro-
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126 MEASURING WHAT WE SPEND

cessing by the end of the data collection period. Monitoring of the reported 

data allows for ongoing edit-checking during the two-week reporting period. The interface within the tablet converts data entered in the Large and 

Routine Expense Module and the Income Module to appropriate standardized reporting periods.

For paper households, data entry by the field representative or central 

staff would be required. Depending on the state of the paper materials, 

this could be very simple data entry or could include more complex 

decision-making from an envelope of saved receipts. Future efforts could 

create a smart data repository of the sort envisioned in the Westat proposal to reduce human effort of this sort, but the panel does not propose 

that here.

Infrastructure

This design would require

•	 purchase and inventory control/maintenance of tablet PCs for use

in the field;

•	 new resources for app development and database management,

not only for initial design efforts but also for ongoing continuing 

development and management. At least initially, BLS may want to 

consider outsourcing this function to organizations with experience 

in app development and management;

•	 new training to support field representatives in their new roles (and

possibly new hiring practices to attract field representatives with 

different backgrounds or skills);

•	 new centralized survey management infrastructure for monitoring

and support: case-flow management, tracking progress, managing interventions, providing positive reinforcements and managing 

incentives. This includes appropriate staff for technical support as 

well as staff who can support respondents remotely and staffing a 

24/7 help desk that respondents could access by pushing a button 

on the tablet;

•	 fewer field visits requiring fewer field representatives in the field;

and

•	 ongoing research to implement this prototype and to keep abreast

of changes and future directions in technologies and technology 

adoption and of how these affect respondents’ recordkeeping and 

reporting proclivities.
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Sample Size and Cost

The sample sizes and costs (data collection only) for Design A presented in this section are broad estimates for use only to compare across 

alternatives. More careful calculations were beyond the information and 

resources available to this panel. These calculations are based in part on a 

spreadsheet of 2010 CE costs provided to the panel. The panel used those 

costs to estimate for similar activities, and then calculated an estimated 

cost per sample case for the new prototype. Thus, these costs are for data 

collection only, and for data collection within a mature process. Estimates 

of sample size (net of 25% nonresponse) were then made that would keep 

to a neutral budget.

Assumptions:

•	 Cost per supported journal placement—$165.

•	 85 percent of households would use tablet. Costs would go down

with greater use of tablet.

•	 Cost of tablet—$200. It could be used 6 times, with an expected

loss of 10 percent.

•	 Remote monitoring of responses—$100 per two-week supported

journal.

•	 In-person monitoring—$150. Necessary for 10 percent of tablet

households, and twice per each paper household.

•	 Incentives—$100 per two-week supported journal.

•	 Paper processing for paper households—$100.

Based on these assumptions, and remaining budget neutral ($16,000,000), 

the panel calculated the following projections for this prototype:

•	 Total cost = $16,000,000.

•	 Annual effective sample size (assuming 75% response) = 18,700.

•	 Average cost per sample = $853.

Meeting CE Requirements and Redesign Goals

This prototype meets the basic CE requirements laid out in Consumer 

Expenditure Survey (CE) Data Requirements (Henderson et al., 2011). Additionally, it is designed to reduce burden, reduce underreporting of expenditures, and utilize a proactive data collection mode with newer technology. 

Table 6-1 provides greater detail.
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128 MEASURING WHAT WE SPEND

TABLE 6-1 Meeting the CE Requirements and Redesign Goals with 

Design A

Goal Design A—Detailed Expenditures Through Self-Administration

Produce quarterly 

and annual estimates 

of 96 categories of 

expense items

The design collects data at a more detailed level of expenditures 

than the 96 categories. Collectively, the 26 two-week data 

collections over the year will provide annual and quarterly 

estimates of expenditures at a fairly detailed level. 

Income estimated 

over the same time 

period

Income is reported for a period most convenient for the respondent 

to report accurately while being close to the reporting period for 

expenditures. Income, like expenditure data, may be modeled 

for the entire year. Income, assets, and “labor force status” are 

requested during both waves. 

Complete picture for 

household spending 

A complete picture of each household is collected for two twoweek periods, as well as information on larger items and routine 

expenditures over a longer recall period. By developing a process 

of seasonal adjustment for the four weeks of expense reporting, 

it would be possible to make quarterly or annual estimates 

of expenditures at the household level. The accuracy of those 

estimates will need to be researched. 

Proactive data 

collection rather than 

change at the margins

The focus of this prototype is proactive self-reporting. Some 

larger expenditures are recalled, but in a setting to encourage the 

respondent to think about the expenditures and look up records.

Panel component with 

at least two contacts

There are two contacts for each household, in adjacent quarters.

Reduced burden The proposed design redistributes burden in current Interview 

and Diary methods to a supported journal with a modern tablet 

interface. Burden is reduced by making the response tasks easier 

and more intuitive. This prototype reduces the number of contacts 

per household. Incentives are used to reduce perceived burden.

Reduced 

underreporting

Focus on detail, the increased use of records, allowing the 

respondent to record expenses at a time best suited and in a way 

best suited to him/her, reduced proxy responding, and incentives 

to perform the task are expected to lead to a reduction in 

underreporting of expenditures. 

Budget neutral Sample sizes are calculated to maintain approximately the current 

budget level.

Targeted Research Required

Many of the research requirements for Design A are common to 

the other two prototypes, and are discussed in more detail in “Targeted 

Research Needed for Successful Implementation of Design Elements” on 

p. 178. Research specific to this prototype includes studies that would de-
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velop models that would estimate quarterly and annual expenditures and 

income at the household level from the four weeks of reported detailed 

data from the Ongoing Expenditures Module plus the data reported on the 

Large and Routine Expense Module.

Design B—A Comprehensive Picture of Expenditures and Income

This prototype attempts to collect income and expenses at the individual household level over 18 months. It features household respondents 

“recalling” expenditure data aggregated for the 96 categories of expenditures (discussed in Henderson et al., 2011) for the previous six months. 

It is anticipated that a more focused questionnaire with less categorical 

and chronological detail may take less time to complete than the current 

Interview survey. Coupled with three contacts instead of five, there is an expected overall burden reduction compared to the current CE Interview survey. If an effective supported journal can be designed, the same households 

in the sample would also be asked to participate in a one-week supported 

journal to collect detail on smaller expenses used primarily to disaggregate 

some expenses reported in the recall survey.

The initial contact for Design B is an in-person visit by the field representative to the household. The field representative would assist the 

respondent in completing a recall survey of expenditures on a tablet computer. The tablet would be left with the household for use in a one-week 

supported-journal concurrent collection of expenditures and then mailed 

back, similar to that described in Design A. The tablet would be returned 

to the household by mail in six months and again in one year to repeat 

the recall and supported journal in a self-administered mode. Figure 6-2 

provides a flow outline of Design B.

Objectives

Design B has the following primary objectives:

•	 Rely on a basic recall mode of reporting, which has provided aggregate expenditure estimates in the past that were more in line 

with the Personal Consumption Expenditures (PCE).

•	 Redesign the recall questionnaire to collect expenditures directly

from the respondent at a broader level of aggregation, rather than 

collecting the current level of detail and then calculating aggregates.

•	 Provide specific instructions to help the respondent estimate expenditures that cannot be recalled.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

130

Fig6-2.eps

landscape

Design B—A Comprehensive Picture of Expenditures and Income

In 6 MonthsTablet returned for selfadministration 

In 6 MonthsTablet returned for selfadministration 

Initial contact in person Demographics and life events module Recall module 

• 96 expense categories • 6 month recall for 

major items 

• shorter recall for other 

items 

Tablet left with household 

Ongoing expenditure module (for 1 week) Real-time upload of data 

Wave 2 – Self-administered Demographics and life events module Recall module 

• 96 expense categories • 6 month recall for 

major items 

• shorter recall for other 

items 

Tablet left with household 

Ongoing expenditure module (for 1 week) Real-time upload of data 

Wave 3 – Self-administered Demographics and life events module Recall module 

• 96 expense categories • 6 month recall for 

major items 

• shorter recall for other 

items 

Tablet left with household 

Ongoing expenditure module (for 1 week) Real-time upload of data 

Household returns tablet or paper journal, mostly by mail. 

Household returns tablet or paper journal, mostly by mail. 

Household returns tablet or paper journal, mostly by mail. 

FIGURE 6-2 Process flow for Design B—A Comprehensive Picture of Expenditures and Income.
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•	 Utilize technology to assist and support the respondent in filling in

this redesigned questionnaire through a self-administered process 

in waves 2 and 3.

•	 Build data files well designed for economic research and policy

analysis by providing a comprehensive picture of expenditure, income, and assets for each household for 18 months.

•	 Use a component subsample linked to the main sample that could

be used to explore the accuracy of the overall data collection and 

provide an opportunity to collect data for more demanding research needs. It would employ techniques such as the prior collation of records, the use of financial software, and budget balancing. 

This component is discussed separately at the end of the description 

of Design B.

Key Assumptions

Design B makes several key assumptions about the collection of consumer expenditure data:

•	 The collection of “bounding” data is unnecessary and inefficient

for the collection of accurate expenditure data in a recall survey.

•	 The value of the micro dataset flows primarily from the construction of expenditure data for relatively broad aggregates—for 

instance, the 96 expenditure categories for which CE tables are 

currently published—rather than an extremely detailed breakdown 

of those expenditures.

•	 A household can accurately recall aggregated expenditures for

periods up to six months for some categories of expenditures. 

For other expenditure categories, respondents can approximate 

averages (e.g., average monthly spending for gasoline) that can be 

used to construct a full set of microdata for the entire six-month 

period.

•	 Household respondents will agree to remain in the panel for 13

months, with three data collection events during that period.

•	 The use of supported self-administration with the tablet, a central

support facility, and the field representative allows most respondents to complete the redesigned recall questionnaire without the 

need for an in-person interview during waves 2 and 3.

•	 Households selected for the intensive subsample would be willing

to participate in this more intensive data collection and are able, 

with assistance, to budget balance their annual finances.
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132 MEASURING WHAT WE SPEND

To the extent these assumptions are valid, detailed microdata suitable for 

socioeconomic analysis can be obtained at the same time that the aggregate 

data objectives of the survey are met.

Sample Design

In Design B, a large sample of households is surveyed three times, at 

six-month intervals. To smooth the operation of the survey, one-twelfth of 

the households would be initiated each month. Once fully implemented, 

the workload in each month would be the initiation of a new survey panel, 

administration of the second wave of the survey to the households that had 

been initiated six months earlier, and administration of the final wave of 

the survey to the households initiated one year earlier. The field representatives are used intensively in the initial wave. If self-administered collection 

methods are successful, the field representative is used in the two additional 

waves only for households who need in-person assistance in completing the 

questionnaire.

In addition to a recall of expenses, each household would be asked to 

keep a one-week supported journal for the upcoming week. Thus, both recall and supported journal surveys are conducted on the same households, 

and repeated at six-month intervals for three repetitions.

Data Collection: Modes and Procedures

Design B collects recalled expenditure data, as well as demographic 

information, income, and assets. The first wave of collection is interviewer assisted, with the subsequent two waves relying on supported 

self-administration to the extent reasonable. As with Design A, survey 

instruments are presented through an interface on a tablet computer. The 

tablet interface follows the guidelines described under Design A and in 

“Using the Tablet Computer for Self-Administered Data Collection” on 

p. 157. Thus, the details are not repeated here.

In this prototype, the tablet is set up with three modules all designed 

for self-administration:

•	 Demographics and Life Events Module: demographics and other 

information about the household;

•	 Recall Module: for reporting expenditure, income, and asset data 

recalled or estimated for the past six months; and

•	 Ongoing Expenditures Module: for recording detailed, ongoing 

expenditures by household members during the one-week period 

of supported journal collection.
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During the initial in-person contact with the household, the field representative identifies the main “household respondent.” As with Design A, the 

field representative assists him or her with completing the Demographics 

and Life Events Module on the tablet. The first meeting also allows the field 

representative to assess whether the respondent can be fully self-sufficient 

in using the tablet for data collection. The goal is to encourage the use of 

the tablet as much as possible in subsequent waves while maintaining data 

quality.

The field representative would then assist the respondent in completing 

the Recall Module reporting expenditures and income for the previous six 

months. This process not only obtains the needed data for this wave, but 

also trains the respondent on using the tablet and the specific modules in 

preparation for waves 2 and 3.

Following the completion of these modules, the field representative 

would ask the respondent to keep a concurrent supported journal for the 

next week (Ongoing Expenditures Module). Following the supported journal week, the respondent returns the tablet by mail.

Wave 2 takes place in six months and wave 3 in one year following 

wave 1. Respondents would be contacted a month ahead of the recall data 

collection and reminded to gather records and receipts. The tablet with the 

same data collection modules is used. Household respondents who were 

successful in using the tablet during wave 1 would be mailed a tablet for 

waves 2 and 3 to be completed without interviewer assistance. The “interviewer assistance” during wave 1 prepares them to complete this task. 

They are asked to complete all three modules and return the tablet following the supported journal week. Households that were not successful using 

the tablet in wave 1 would be contacted in person or over the telephone to 

complete waves 2 and 3.

Demographics and Life Events Module: This module includes standard

demographics plus other items to assist in tailoring estimation in the event 

that the household drops out of the panel. Examples include the number 

and age of household members, income bracket, purchasing habits, and use 

of online payments. In waves 2 and 3, the questions would be modified to 

ask about key “life events” that might have transpired over the previous 

six months.

Recall Module: This module collects data on expenditures at a relatively

broad level of aggregation based on variable recall periods. The objective 

is to obtain six-month estimates for each expenditure category. The assumption in this prototype is that reporting certain expenses (such as major 

durable goods, rent, and utilities) for six months would be relatively easy 

and accurate. For other recurring expenses such as groceries and gasoline, 
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134 MEASURING WHAT WE SPEND

for which shorter recall periods are appropriate, the respondent could 

make estimates of monthly averages of sufficient accuracy to be expanded 

to estimate spending for six months. Ultimately, all reported data would be 

expanded to a six-month estimate by the tablet app. The instrument would 

also include special prompts for expenditure categories that have been historically underreported, such as clothing, food away from home, alcohol, 

and tobacco. These prompts would include the types of expenditures and 

the possible locations of potential purchases.

Compared to the current CE Interview survey, Design B significantly 

curtails the number of questions both in terms of the breadth of categories 

(as discussed above) and the detail required in reporting those expenditures. 

For instance, the instrument would not ask in which month purchases were 

made, or sales tax, or information about the individuals for whom the purchase was made. These details add significantly to the burden in the current 

CE Interview survey.

Income, assets, and “labor force status” would be collected for each 

household for the same six-month period. Again, some estimation may be 

necessary based on current pay stubs and prior tax records.

Ongoing Expenditures Module: After completing Design B’s recall survey, 

households would be asked to keep a one-week self-administered supported 

journal. The supported journal would collect information on expenditure 

categories for which recall collection is more problematic and would provide additional detail that can be used to disaggregate totals. Thus, the 

supported journal would focus on specific categories of expenses. (However, 

research might indicate that it is more efficient to collect a complete record.) 

A paper-supported journal would be available for use when necessary, but 

the tablet would be the preferred mode.

Frequency and Length of Measurement

There are three waves of data collection at six-month intervals in 

Design B. Each wave uses a tablet computer with three modules. Wave 1 

requires an in-person visit by the field representative with an “assisted” 

interview using the tablet for the Demographics and Life Events Module

and the Recall Module. The tablet is left with the household for a one-week 

supported journal. In subsequent waves, the tablet is mailed to the household for self-administration of two modules plus the one-week supported 

journal. A household is in the sample for 13 months and recalled expenditure data are collected for 18 months. All recall and supported journal 

instruments are the same for different waves. The demographics module 

would be modified for use in waves 2 and 3 to ask about key “life events” 

that might have transpired over the previous six months.
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Completing the Demographics and Life Events Module and the Recall Module is expected to take 30–45 minutes regardless of mode. The 

Ongoing Expenditures Module (supported journal) is expected to take 20 

minutes per day.

Recall Period

The recall period for Design B’s Recall Module is six months. If appropriate, the recall period for some items can be less than six months, and 

the expenditures reported for the shorter period used to estimate spending 

for the full six-month period. For the Ongoing Expenditures Module (supported journal), the collection period is one week. The supported journal 

collects data on a daily basis, with little or no recall required.

Incentives

The panel estimates that an incentive payment of $100 would be made 

to households for completing each of three waves of data collection in 

Design B. Households that were unable to use the tablet and require inperson enumeration for each wave would receive an incentive of $50 per 

wave instead of $100.

Role of the Field Representative

In Design B, the field representative establishes contact with each 

household and secures cooperation. The field representative conducts the 

first interview by assisting the respondent with wave 1 data including 

household composition, demographics, and the six-month recall categories. 

Simultaneously, the field representative trains the respondent on the use 

of the tablet and its modules in preparation for waves 2 and 3. The field 

representative recruits the household into the supported journal collection, 

emphasizing the tablet-supported journal collection in the vast majority of 

cases. The field representative trains the respondent on the use of the tablet 

for supported journal collection. The field representative explains the incentive for filling in the supported journal, leaves the tablet and a mailer at the 

household, and departs.

After the initial in-person visit, ideally the field representative never 

visits the household again. In principle, the household faithfully fills in the 

Ongoing Expenditures Module (supported journal) and mails the tablet 

back in a timely manner, and the household respondent successfully masters 

using the modules on the tablet and agrees to complete waves 2 and 3 in 

a self-administered mode. The field representative may be called upon by 

the central office to intervene with a household, for example, to encourage 
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136 MEASURING WHAT WE SPEND

reporting on the supported journal for the entire week, to answer questions about the instrument, to substitute a paper-supported journal for the 

tablet-supported journal, or to pick up the supported journal. The field 

representative does not monitor the cases in the first instance, but intervenes 

only at prompting from the central office.

The role for the central office includes monitoring the cases on a daily 

basis, phoning the household to intervene if the supported journal is not 

filled in, and prompting field representatives if their assistance is needed. 

The central office also fills the role of first-line support for respondent 

questions, forgotten passwords, and the like. The central office will also 

re-initiate contact with the household in six months, mailing the tablet and 

instructions.

Role or Expectations of the Respondent

The respondent provides data three times in Design B. The first time, 

the respondent is assisted by the field representative for the recall categories, 

but then records concurrent expenditures with the supported journal items 

for a week. The respondent may need to use a paper-supported journal 

rather than the tablet. Whether the supported journal is a tablet or paper, 

the respondent is expected to mail it back to the home office. The assumption of Design B is that most respondents are willing to use the tablet 

throughout all three waves. The tablet is expected to make the respondent’s 

job easier.

Post–Data Collection Analysis

The spending for some goods over the previous six months would have 

to be estimated based on the spending during a shorter recall period. This 

could be as simple as doubling the expenditures reported for a three-month 

recall period, as Statistics Canada does for their interview survey. It is expected that the tablet app will make these adjustments. This design makes 

it easier for analysis because any modeling required for a complete record 

is done within the household, not across households.

Infrastructure

Infrastructure needs for Design B are similar to those in Design A and 

not repeated here.
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Sample Size and Cost for Basic Component

The sample sizes and costs (data collection only) presented in this 

section for Design B are broad estimates for use only to compare across 

alternatives. More careful calculations were beyond the information and 

resources available to this panel. These calculations are based in part on a 

spreadsheet of 2010 CE costs provided to the panel. The panel used those 

costs to estimate for similar activities, and then calculated an estimated 

cost per sample for the new prototype. Thus these costs are for data collection only, and for data collection within a mature process. Estimates of 

sample size (net of 25% nonresponse) were then made that would keep to 

a neutral budget. Sample size and costs for the subsampled component are 

provided separately.

Assumptions:

•	 Cost per in-person recall module or interview—$325.

•	 85 percent of households would use tablet. Costs go down with

greater use of tablet.

•	 Paper households are contacted in person on each wave.

•	 Cost of tablet—$200. It can be used six times, with an expected

loss of 10 percent.

•	 Remote monitoring of responses—$100 per wave per tablet

household.

•	 In-person monitoring—$150, or $325 for full interview. Necessary

for 10 percent of tablet households, and once or twice per paper 

household per wave.

•	 Incentives—$100 per wave per tablet household and $50 per wave

when interview is required. Households participating in the intensive study would receive $150 per wave.

•	 Paper processing for paper households—$100 per wave.

Based on these assumptions, and remaining budget neutral 

($16,000,000), the panel calculated the following projections for this prototype: (Sample size and costs for the subsampled component are provided 

separately.)

•	 Total cost = $13,900,000.

•	 Annual effective sample size (assuming 75% response) = 12,200.

•	 Average cost per sample = $1,138.
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138 MEASURING WHAT WE SPEND

Meeting CE Requirements and Redesign Goals

Design B meets the basic CE requirements laid out in Consumer Expenditure Survey (CE) Data Requirements (Henderson et al., 2011). Additionally it is designed to reduce burden and reducing underreporting of 

expenditures. Table 6-2 provides more detail.

TABLE 6-2 Meeting the CE Requirements and Redesign Goals with 

Design B

Goal Design B—A Comprehensive Picture of Expenditures and Income

Produce quarterly and 

annual estimates of 96 

categories of expense 

items

All 96 categories of expense data are collected with three data 

points for each.

Income estimated over 

the same time period

Questions on income, assets, and “labor force status” are asked on 

each wave and for the same reporting period. 

Complete picture for 

household spending 

This prototype focuses on providing an improved picture at the 

household level over the current CE. Some items are collected in 

the recall module and some in the supported journal, but both are 

collected from the same households. Data adjustment (expansion) 

to the entire six-month period will be needed for items not 

collected or estimated for the entire six-month period. However, 

each household will have complete (or estimated) records for all 96 

items.

Proactive data 

collection rather than 

change at the margins

The supported journal collection is proactive. The recall module is 

recall.

Panel component with 

at least two contacts

There are three contacts for each panel member. 

Reduced burden There are three administrations per household, instead of five for 

the current interview. The interview is less burdensome than the 

current CE in terms of length and in difficulty of task. However, 

the household is now expected to execute both the interview and 

the supported journal. Incentives are used to reduce perceived 

burden.

Reduced 

underreporting

This prototype makes the assumption that aggregating expenditures 

for recall over a six-month period will have less underreporting 

than an attempt to recall more detailed expenses over three 

months. Research is needed to evaluate this assumption.

Budget neutral Sample sizes are calculated to maintain approximately the current 

budget level.
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Targeted Research Needs

Many of the research requirements for Design B are common to 

the other two prototypes, and are discussed in more detail in “Targeted 

Research Needed for Successful Implementation of Design Elements” on 

p. 178. Research specific to this prototype includes the following:

•	 investigate the assumption that a “bounding” interview is unnecessary to avoid telescoping and other issues;

•	 investigate the accuracy and completeness of aggregated expenditures for periods up to six months and for estimates of averages 

(e.g., average monthly spending for gasoline) used in this prototype 

to construct a full set of microdata for the entire six-month period;

•	 develop appropriate models to “disaggregate” aggregated expenses

using data from the one-week supported journal; and

•	 develop successful methodology for a component that will use an

intensive interview and process based on prior collation of records 

and financial software to achieve a budget balance for the year at 

the household level, as described below.

Intensive Subsample in Design B

Design Objectives: A relatively small subsample of households who have 

completed wave 3 of the basic component of Design B would be asked to 

participate in a more intensive process to provide a full picture of income 

and expenditures over two consecutive calendar years. The process uses 

paper and online records more intensively, encourages the use of financial 

planning software, and employs budget balancing to reduce discrepancies 

between expenditures and income net of savings.

As discussed in Chapter 5, the PCE is the primary but problematic 

benchmark for comparing the CE aggregate expenditures. This subsample 

would attempt to establish accurate measurements of expenditures, income,

and assets at the household level for a year through a more intensive 

record– and budget balance–driven process. Besides establishing an improved benchmark for measuring the success of the data collection methodologies in the basic component, the subsample would inform how better 

to collect expenditures in the ongoing survey and measure the extent and 

organization of household recordkeeping.

Key Assumptions: Assumptions for Design B’s intensive subsample include 

the following:
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140 MEASURING WHAT WE SPEND

•	 Households that have completed wave 3 of the basic component

of this prototype are willing to participate in this more intensive 

process if selected for the subsample.

•	 Respondents, with the help of the field representative, can reach

reasonable balance between expenditures and income less savings. 

Fricker, Kopp, and To (2011) found the actual balancing between 

income and expenses difficult in practice. However, Statistics Canada used this approach for a number of years before redesigning 

their survey in 2009, so there is likelihood that a workable prototype can be developed.

Sample Design: A relatively small subsample of households that have completed wave 3 of the basic component of this prototype would be selected 

for this component. Calculations in this report are based on a subsample 

of approximately 5 percent of the original sample.

Data Collection: Modes and Procedures: The initial wave of data collection would begin approximately two months following the wave 3 interview. A second wave of data collection would be one year later. Data 

collection is expected to be face-to-face. It may take multiple visits to 

achieve the required balance.

Expenditure and income data reported during waves 2 and 3 of the basic component would be available to the respondent and field representative 

to work together to bring things in balance. The goal of having a financial 

budget that balances would be explained up front to the household. The 

respondent would be encouraged to use financial software and supply 

records, and/or draw information from online financial sources, including 

credit card and bank accounts as is done by Mint.com (2011). Additionally, the respondent will be asked about loyalty card programs in which 

they participate, and will be asked to provide permission for BLS to obtain 

the household spending data captured within those programs. Categories 

of spending for which there are no records become the leftover or residual 

part of expenditures. The main survey instrument is then used to fill in the 

missing parts of expenditures over the year, keeping in mind the need for 

the budget to balance.

Frequency and Length of Measurement: This design features two waves

of data collection, one year apart. All households in the subsample will be 

included in both waves. Income, savings, and expenditure data for one year 

are required for each wave.
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Recall Period: This intensive process focuses on obtaining and using records of income and expenses. However, during the balancing process, 

respondents may be asked about expenses and income for the previous year.

Incentives: The panel understands that the effort required of a respondent 

to actively participate in the financial balancing activities is greater than 

for a recall interview. Therefore, it estimates that an incentive payment of 

$150 would be made to households for completing each of two waves of 

data collection, for a total of $300.

Role of the Field Representative: The field representative’s role in this 

component changes radically. He or she assists the respondent in sorting 

through available records of income and expenses over the year. The field 

representative would also work with the respondent to balance the household financial budget for the year, probing for additional income and/or 

expenses to bring the budget into balance.

Role or Expectations of the Respondent: The respondent is expected to 

be an active participant in this process to balance the components of the 

household’s financial budget for the year. This would include providing 

paper and electronic records, and giving permission to access credit card, 

banking, and tax records directly.

Post–Data Collection Analysis: N/A

Infrastructure: None specific for this component of Design B.

Sample Size and Cost: The sample size and costs (data collection only) 

presented here are broad estimates for use only to compare across alternatives. More careful calculations were beyond the information and resources 

available to this panel. These costs are in addition to the costs for the basic 

component of Design B.

Assumptions:

•	 Budget balancing process may take several interviews with the

household and may require more experienced field representatives. 

Expected cost per household—$800 per wave, with $350 per refusal contact.

•	 Response rate—50 percent

•	 Incentives—$150 per household per wave.

Based on these assumptions, the panel calculated the following projections 

for this prototype.
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142 MEASURING WHAT WE SPEND

•	 Total completed sample size per wave = 800.

•	 Average cost per household per wave = $1,300.

•	 Approximate total cost = $2,100,000.

Design C—Dividing Tasks Among Multiple Integrated Samples

Design C utilizes a multiphase sampling design that empowers estimation and modeling to provide the needed data products with reduced 

burden on respondents. In doing so, it provides detailed expenditures 

similar to Design A. It provides a complete picture of household expenses 

and income as in Design B, but for six months (instead of 18) and only for 

a portion of households. It features supported self-administration using a 

tablet computer and data collection interfaces as described in the other two 

designs. Figure 6-3 provides a flow outline of Design C.

Design Objectives

The guiding principle behind Design C is to avoid asking every household in the sample to perform exactly the same tasks. By dividing up the 

tasks, the overall burden on an individual household is reduced. The totality of information is brought together through estimation and modeling. 

The power of this design relies on (1) achieving good correlation between 

the estimates from the base survey and the estimates from the later phases 

of data collection; (2) developing effective models involving covariates such 

as demographic characteristics to connect estimates from the different subsampled surveys; and (3) achieving improvements in the data quality and 

reporting rates in the supported self-administered procedures used with the 

subsamples. It also provides panel data and a complete picture of a household on a subset of the overall sample.

Key Assumptions

Design C makes several key assumptions about the collection of consumer expenditure data:

•	 All the key assumptions listed under Design A are present.

•	 Strong correlations exist for covariates measured in the base survey

and later phases of data collection.

•	 Effective models involving covariates such as demographic characteristics can construct estimates using the different subsampled 

surveys.

•	 Collecting a complete picture of household expenses and income

on a substantial component of the overall sample with modeling of 
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

143

Fig6-3.eps

landscape

Design C—Dividing Tasks Among Multiple Integrated Samples

Base Survey - In-person interview  - Demographics and other data for stratification

Independent sample selected from base for each month 

Procedures similar to Design A Initial contact in person 

• Assess household and 

train 

Tablet left with household 

Ongoing expenditure module (for 1 month) 

2 samples selected from base —for quarters 1 and 2 —for quarters 3 and 4

Initial contact in person – Wave 1 

Assess household and train and set up for tablet use Tablet left with household 

3 Months Later

Wave 1 Ends, Wave 2 Begins 

In-person visit Fill information gapsEncourage continued reporting Tablet left with household 

Household returns tablet or 

paper journal, mostly by mail 

Detailed Expenditure Component 

Household Profile Component

 Household records expenditures 

throughout the quarter. 

• Expenditures recorded for 

modified 96-item level aggregation (some smaller categories not collected) 

• More detailed demographics, 

income and labor force status

 Household records expenditures 

throughout the quarter. 

• Expenditures recorded for 

modified 96-item level aggregation (some smaller categories not collected) 

• More detailed demographics, 

income and labor force status

3 Months Later - Wave 2 ends 

In-person visit Fill information gapsTablet retrieved 

Responsive 

Monitoring 

Responsive 

Monitoring 

FIGURE 6-3 Process flow for Design C—Dividing Tasks Among Multiple Integrated Samples.
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144 MEASURING WHAT WE SPEND

smaller expenditure items from a different sample will be sufficient 

for economic and policy analysis.

•	 A one-month tablet-based reporting period for documenting ongoing purchases is plausible. This is an open research question.

Sample Design

Design C includes a base survey followed by surveys of more intensive 

and frequent measurements. The base survey would have a relatively large 

sample size, collecting information to use for stratification and modeling. 

From that base, two sets of independent samples would be drawn. Sampled 

units in the first component are asked to keep a supported journal for one 

month to proactively record detailed expenditures. Sampled units in the 

second component are contacted for quarterly recording of aggregate expenses for two quarters.

The Base Survey: The base sample is a large, address-based sample similar 

to the current CE Interview sample. This initial survey forms a stratification base for sampling later phases of more intensive data collection. Base 

survey data are also used in models, combining them with data from later 

phases to produce estimates. In order to keep the base sample “fresh,” 

it would be supplemented each quarter with new samples that would be 

interviewed. This allows base survey data collection to go on throughout 

the year, and the samples for more intensive data collection to be selected 

using an updated base.

Detailed Expenditure Component: Design C calls for selecting 12 independent samples (one for each month) from the base survey and asking 

households in those samples to keep a supported journal of expenditures for 

one month. The purpose of these surveys is to proactively collect detailed 

expenditure data in the same manner as described in Design A. These data 

would be used in national and regional estimates, with precision enhanced 

by modeling back to the base survey and combining with data collected 

from the household profile component.

Household Profile Component: Design C calls for a separate component of

the overall sample to focus on providing a complete profile of household expenses and income over two consecutive three-month periods. Independent 

quarterly samples would be selected from the base survey for collection of 

data through a combined proactive/recall collection process.
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Data Collection: Mode and Procedures

The Base Survey: The base survey would be conducted in person using a 

computer-assisted personal interviewing (CAPI) instrument, administered 

on a “rolling basis” to provide the samples of the component surveys for 

the upcoming quarter. The survey would collect household demographics 

and basic income and asset data as needed for stratification, modeling, and 

imputation. (Perhaps this is as simple as a “range” value for household 

income, along with presence or absence of various assets.) It would collect global expenditures, at the 96-item level, aggregated even more if the 

correlations allow, with a variable recall period based on expense item. 

There would also be a series of questions regarding the household’s basic 

expenditure habits and comfort level with various reporting technologies.

Detailed Expenditure Component: The detailed expenditure component

of Design C is set up in the same way as the supported self-administered 

journal described in Design A. One difference is that, in this prototype, 

households are asked to maintain the supported journal for four consecutive weeks. In Design A, households were asked to maintain the supported 

journal for two weeks, and then asked again to complete the two-week 

supported journal the following quarter.

Another difference between Design C and Design A is that the household would be asked to complete only the Ongoing Expenditures Module. 

Demographics were collected in the base survey. Income/assets, and larger 

and routine expenses, for the most part, are estimated from the household 

profile component of the overall sample. This component focuses on the 

smaller expenditures of a household.

Household Profile Component: Households in this component would be

asked to keep records of aggregated expenditures at a modified 96-item 

level over two periods of three months. Most of this recording of expenditures would be proactive, using supported self-administration. At the 

initial interview, the field representative trains the respondent on the use 

of the tablet and its interfaces. The field representative asks the household 

to proactively keep receipts and use a supplied tablet computer to record 

expenditures during the upcoming quarter.

Household respondents would enter expenditure amounts in the tablet, 

indicating the expense category for the item. For example, a respondent 

might click on the category men’s apparel and footware and then enter 

the amount spent for a pair of shorts or a pair of shoes. No further detail 

would be required. The level of entries is also reduced because expenses in 

some of the smaller and/or more frequently purchased categories (such as 
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146 MEASURING WHAT WE SPEND

food away from home, gasoline, nonprescription drugs, tobacco products, 

and personal care items) would not be collected in this component. Instead 

the household’s expenditures for these items would be modeled from “like 

households” in the detailed expenditure component. Additionally a trip 

to the grocery store would require only saving the receipt or entering the 

total spent in the tablet. The allocation of food items purchased to details 

(such as meat, fruits/vegetables, nonfood items) would also be modeled 

from the detailed expenditure component for similar households. Thus the 

requested level of expense detail would be much less than in the supported 

journal component, requiring considerably less effort per week. Ongoing 

monitoring and feedback would encourage recordkeeping throughout the 

quarter. The field representative returns at the end of the quarter and conducts an interview (using the tablet) to fill information gaps. The goal is to 

end with a complete profile of expense data for the quarter at the 96-item 

expenditure data level, which includes some modeled components. The 

profile would include expenditures for smaller items, as well as breakouts 

of some aggregated amounts modeled from data from the detailed expenditure component.

The field representative would leave the tablet with the household for 

one additional quarter, reemphasizing the need to keep receipts and record 

expenditures on the tablet. The field representative returns again at the 

end of the second quarter and conducts an interview using the tablet to fill 

information gaps. At this point, he or she removes the tablet, ending the 

contact with this household.

The household respondent would also be asked to complete the Income 

Module on the tablet (described under Design A) at some point during the 

second wave to provide information on income and assets.

This component is similar to Design B and is modeled, in part, after the 

Westat proposal described in Chapter 4. It is similar to Design B in that it 

collects many of the data items in the Recall Module of Design B. It differs 

by placing the tablet with the respondent at the beginning of the reporting 

period and encouraging the respondent to report throughout the quarter. In 

Design B, the tablet is provided at the end of the period to the respondent, 

who is asked to use records and receipts to recall or estimate for aggregated 

expense items. Design C also differs from Design B in that reporting is for 

two three-month periods, as opposed to three six-month periods. Income, 

asset, and “labor force status” questions are included in the recall module. 

In wave 2, there is a series of questions about major life changes during the 

previous six-month period.

In both Design B and in the household profile component of Design C, 

a separate supported journal for detailed information is part of the design. 

In Design B, both pieces are collected from the same sample of households. 

In Design C, the details come from a different sample of households.
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Frequency and Length of Measurement

All households would be interviewed in person on the base survey. 

Households selected for the detailed expenditure component would receive 

an additional in-person visit to place the tablet and initiate the supported 

journal keeping. These households would be asked to maintain a detailed 

supported journal for one month and to return the tablet by mail at the 

end of that month. Households in the household profile component would 

be interviewed in person two or three additional times. The first would 

be to set up the first quarterly recordkeeping period and place the tablet. 

Field representatives would make subsequent in-person visits at the end 

of the first quarter and again at the end of the second quarter. These last 

contacts might be made by telephone if the respondent is regularly entering 

expenditures throughout the quarter into the supplied tablet. Households 

in this component would be asked to report aggregated expenses over two 

consecutive one-quarter reporting periods.

Recall Period

In the base survey, respondents are asked to recall aggregated expenses 

for a variable recall period depending on the category of expense. In the two 

component samples, respondents are asked to record ongoing expenditures. 

Some recall questions regarding the previous quarter might be required to 

fill data gaps at the end of that quarter.

Incentives

Incentives would be used in both components of follow-on samples but 

not for the base survey. The panel envisions using the following incentives:

•	 $150 per household for completing the detailed expenditure component, and

•	 $180 per household for completing the six-month household profile component.

Role of the Field Representative

The field representative’s role changes radically, from being the prime 

interviewer and data recorder to being the facilitator who encourages, 

trains, and monitors in support of the respondent’s data entry. Ideally this 

will be true for both components. On the household profile component, 

the field representative may have to do more traditional interviewing if the 

household has not successfully kept up with recording expenditures over 
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148 MEASURING WHAT WE SPEND

the quarter. The role of the field representative would vary for households 

that use the paper-supported journal, and also across different tablet households depending on their comfort with the technology, willingness to use 

records, and household composition.

Role or Expectation of the Respondent

In Design C, the respondent takes on the primary role of providing the 

most accurate data possible, supported by records to the extent possible. 

What differs from the respondent’s current role in the interview is that 

the respondent (after the initial meeting with the field representative) controls the time, pace, and order of data recording. In this sense, the design 

implicitly supports the idea that providing accurate data takes time and 

thoughtfulness. What differs from the respondent’s current role is that the 

respondent, in the supported journal, is provided with augmented ongoing 

interactive encouragement and support from both the interface and from 

remote support staff.

Post–Data Collection Analysis

Estimates made using Design C would combine the strength of the 

larger sample size of the base survey and the more accurate detailed data 

from the follow-on components. They would be based on models that 

depend on the correlations between the estimates from the various data 

collections within each household and the correlations across aggregates 

of households based on household attributes. It is not expected that any 

one sample would stand completely on its own. The information collected 

would be strengthened through more detail or more breadth collected in 

other samples.

The panel envisions that the estimates of expenditures for the 96-item 

level aggregates and the more detailed estimates needed by the CPI would 

be model-based using data from both components and the base survey. A 

complete profile of individual households for microlevel research would be 

based on data collected for six months on the household profile component, which would be supplemented with estimates of smaller categories of 

expenses and/or the breakdown of collected aggregates using data from the 

detailed expenditure component.

Infrastructure

Infrastructure needs are similar to those in Design A and not repeated 

here.
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Sample Size and Cost

The Design C sample sizes and costs (data collection only) presented in 

this section are broad estimates for use only to compare across alternatives. 

More careful calculations were beyond the information and resources available to the panel. These calculations are based in part on a spreadsheet of 

2010 CE costs provided to the panel. The panel used those costs to estimate 

for similar activities, and then calculated an estimated cost per sample for 

the new prototype. Thus, these costs are for data collection only, and for 

data collection within a mature process. Estimates of sample size (net of 

25% nonresponse) were then made that would keep to a neutral budget.

Assumptions:

•	 Cost per household in the base survey—$324.

•	 Cost per tablet placement—$165.

•	 85% of households would use tablet. Costs go down with greater

use of tablet.

•	 Cost of tablet—$200. It can be used six times, with an expected

loss of 10 percent.

•	 Remote monitoring of responses—$100 per tablet household, for

both components.

•	 In-person monitoring—

 $150 for the detailed expenditure component. Necessary for 10 

percent of tablet households and twice per paper household.

 $200 for the household profile component.

•	 Incentives—$150 per detailed expenditure component; $180 per 

household profile component.

•	 Paper processing for paper households—$100.

Based on these assumptions, the panel calculated the following projections 

for Design C:

•	 Total cost = $20,600,000—above the budget neutral point.

•	 Annual effective sample size (assuming 75% response) for base

survey = 25,000.

•	 Annual effective sample size (assuming 75% response) for detailed 

expenditure component = 11,000.

•	 Annual effective sample size (assuming 75% response) for household profile component = 7,000.

This prototype is shown with a cost projection that is greater than 

budget neutral cost of $16,000,000. The base survey required considerable resources and the panel wanted to ensure that the quarterly panel 
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150 MEASURING WHAT WE SPEND

component had a sufficient sample size to be effectively used for economic 

research. The panel did not make projections on how high the correlations 

between the three components will be and estimated sample size without 

those assumptions. With relatively high correlations and modeling back to 

base, the precision of the estimates will increase. BLS should then be able 

to lower the sample sizes while maintaining the required precision, and thus 

bring costs back down. The extent of the increase in precision needs to be 

evaluated. The preliminary budget projections are

•	 Average cost per sample for base survey = $324.

•	 Average cost per sample for detailed expenditure component = 

$529.

•	 Average cost per sample for household profile component = $962.

Meeting CE Requirements and Redesign Goals

This prototype meets the basic CE requirements laid out in Consumer 

Expenditure Survey (CE) Data Requirements (Henderson et al., 2011). 

Additionally, the redesign seeks to reduce burden, reduce underreporting 

of expenditures, and utilize a proactive data collection mode with newer 

technology. Table 6-3 provides more detail.

Targeted Research Needs

Most of the research requirements for this prototype are discussed 

in “Targeted Research Needed for Successful Implementation of Design 

Elements” on p. 178. Additional research is needed specifically for this 

prototype to:

•	 research and develop models for estimation using the base survey

and two waves of data collection; and

•	 research and develop models for imputing at the household level

“smaller expense items” collected on the detailed expenditure 

component and not on the household profile component into the 

household-level dataset to complete the overall household expense 

profile.

Comparison of Designs A, B, and C

As described above, the panel developed three prototypes of a redesigned

CE. Each prototype is different—a good fit for a specific use of the data and 

perhaps less adaptable for other uses. Each prototype is similar in several 

ways. They all meet the basic CE requirements, take steps to reduce burden 
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TABLE 6-3 Meeting the CE Requirements and Redesign Goals with 

Design C

Goal Design C—Dividing Tasks Among Multiple Integrated Samples

Produce quarterly and 

annual estimates of 96 

categories of expense 

items

The design collects data at a more detailed level of expenditures 

than the 96 categories. Details are collected in the supported 

journal component. Larger and aggregated expenses are collected 

in the household profile component. Modeling data collected in 

both modules using correlations with base survey variables is 

expected to create estimates of detailed expenses with appropriate 

precision. 

Income estimated over 

the same time period

Income is reported in the household profile component for each 

reporting period.

Complete picture for 

household spending 

A complete picture of each household is collected for households 

sampled in the household profile component at the 96-category 

level. These estimates can be used independently or modeled 

along with data from the base survey and detailed expenditure 

component to enhance detail and precision.

Proactive data 

collection rather than 

change at the margins

The focus of this prototype is proactive self-reporting in both 

follow-on components. Expenditures are recalled in the base 

survey, but these data are not used for direct estimation.

Panel component with 

at least two contacts

There are two contacts in adjacent quarters for each household in 

the household profile component.

Reduced burden This prototype reduces burden by dividing the overall tasks among 

multiple integrated samples, and not asking each household to 

perform each task. Some households are asked to provide detail 

over a relatively short period. Other households are asked to 

report over a longer period, but are asked for less detail. Incentives 

are available to reduced perceived burden. Burden is reduced by 

making the response tasks easier and more intuitive with the tablet 

interface and support. Incentives are used to reduce perceived 

burden. 

Reduced 

underreporting

The detailed expenditure component focuses on detail, the 

increased use of records, allowing the respondent to record 

expenses at a time best suited and in a way best suited to him/

her, reduced proxy responding, and incentives to perform the task. 

All are expected to lead to a reduction in underreporting detailed 

expenditures. The household profile component also focuses on use 

of records, asks for less detail, and allows the respondent to record 

expenses at a time best suited for him/her. The ability to model 

using data from all components will allow for better adjustment of 

underreporting when it is discovered.

Budget neutral The sample sizes that are calculated exceed the budget neutral 

level. If the correlations between the base variables and the two 

components are sufficiently strong, these sample sizes could be 

reduced.
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152 MEASURING WHAT WE SPEND

and to incorporate technology, and use as part of their design an implementation of self-administration with support from the field representative, a tablet 

computer, and a centralized support facility.

To recap the main features of the three designs:

•	 Design A—Detailed Expenditures Through Self-Administration

is designed to provide all of the detail that is needed currently 

for the CPI. It maximizes the use of self-administration through a 

supported journal for concurrent data reporting. It also features a 

self-administered recall component to collect larger and recurring 

expenses. It stresses that the recall period should be the one best 

suited for accurate reporting, which might vary by expense category. Cautions: Diary fatigue is an issue with the current Diary 

survey. The supported journal is designed to address this issue, but 

research is needed to develop and investigate this hypothesis. Additionally, Design A is not as adaptable for economic research as 

are the other two designs. It provides panel data with two waves 

of collection from the same household three months apart. The 

use of varying reference periods for different expense categories is 

likely to make the formation of a consistent household dataset for 

research more difficult.

•	 Design B—A Comprehensive Picture of Expenditures and Income

focuses on providing a rich dataset that will meet the needs of 

economic research. It uses a recall survey to collect expenditure 

information over the previous six months. Incorporating three 

waves of data collection with the same household, it results in a 

panel dataset covering 18 months for each household. Waves 2 

and 3 would be self-administered. The questionnaire would ask 

about aggregated (96-item level) expenditures, rather than at the 

more detailed level of the current Interview survey. It combines 

two collection methods: (1) asking respondents to recall specific 

expenditures for larger and recurring expenses and (2) asking respondents to estimate the “average or typical” amount spent on 

other types of expense items. This design also incorporates an intensive subsample in which households will be asked to work with 

the field representative to balance household income and expenses 

over two one-year periods. Cautions: A three-month recall period 

caused issues with the current Interview survey, and this design uses 

a recall period that is twice as long. Research is needed to see if 

the new approach (aggregated expense items, longer recall period, 

and increased use of respondent estimation of “typical or average” 

expenditures) will provide an acceptable level of accuracy. Design 
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B does not provide expenditure estimates at the level of detail currently used by the CPI.

•	 Design C—Dividing Tasks Among Multiple Integrated Samples

provides both the detailed expenditures required by the CPI plus 

a consistent and complete picture of household expenditures for 

economic research. It uses a base survey for stratification and 

sampling, followed by subsamples for a detailed expenditure component and a household profile component. Estimates of detailed 

expenditures would be made using data from all three components 

through modeling. The household profile component provides a 

consistent panel dataset for six months and is designed for use 

for economic research. A richer dataset for research could be developed through modeling with the other components. Cautions: 

Because of the base component, Design C may be more costly 

than the other two designs. If the correlation structure between 

the components is strong, sample sizes could be reduced and this 

might not be a problem. This design is complex and will take more 

resources to develop and test the required models. The panel data 

are provided for only six months rather than a full year.

The prototypes discussed above use a variety of methods for collecting 

expenditure data. Variations in the exact form of the collection methods 

and the relative emphasis across methods are what distinguish the prototypes from each other. The major collection modes are1

•	 a module to collect demographic and socioeconomic data, as well 

as information on life events. These modules reflect, inter alia, the 

need to classify households for all of the major purposes of the CE.

•	 a recall module. Design A includes a recall component to collect information on large and routine expenses. Designs B and C 

include recall components to collect spending for 96 expenditure 

categories. The recall periods are unspecified and variable for Design A and are used as needed to fill gaps in concurrent reporting 

in Design C. Design B has a six-month recall period, but it allows 

for a shorter period for some spending categories where spending 

is likely to be relatively stable over time. Design B explicitly accepts 

as (almost) inevitable that respondents will estimate spending patterns over the recall period.

•	 a supported journal. Designs A and B include supported journals 

1The intensive panel discussed under Design B is not discussed in this section, because none 

of the options requires that this approach be successful. Moreover, all of the options would 

benefit if it is found to be effective.
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154 MEASURING WHAT WE SPEND

to collect all expenditures over two- and one-week periods, respectively. The comparable supported journal for Design C would cover 

one month. Design C also includes a six-month supported journal 

to collect spending on the 96 expenditure categories covered by the 

recall modules in Designs A and B.

As emphasized above, the panel has no empirical evidence on how 

well these collection modes—and the variations within them across prototypes—will work. In the current CE, both the Diary and Interview surveys 

have serious shortcomings. Comprehensive and sophisticated—and, unfortunately, expensive—testing will be necessary to determine which, if any, 

of the collection modes in the prototypes can be successful. Among the key 

questions to be answered with respect to recall and the supported journal 

in the collection of expenditure data are the following.

Recall components:

•	 Can a recall survey be designed that could collect sufficiently accurate data on spending patterns for individual households at the 

level of 96 expenditure categories?

•	 How does the length of the recall period affect the efficacy of a

recall survey?

•	 Is it necessary to accurately reconstruct actual spending or would

it suffice for a household to estimate its spending patterns?

•	 How can new technology, including self-reporting on a tablet, be

best used to improve a recall survey?

Supported journal:

•	 Can a supported journal overcome the diary fatigue and underreporting that has plagued the current diary instrument?

•	 For how long can households be asked to complete a supported

journal?

•	 How would a supported journal that asks for spending aggregates,

rather than individual purchases, work in practice?

•	 Can a structured journal be designed that will reduce respondent

burden and increase and sustain the level of reporting?

•	 How critical a role would tablet reporting play in the design?

The answers to these (and other) questions will be critical to the CE 

reform effort and how the data from a new CE survey can meet the requirements specified by BLS. The implementation risks are significant:

•	 If it proves unworkable to collect expenditure data by recall, the
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PATHWAY TO AN IMPROVED SURVEY 155

spending data collected from each household—the number of expenditure weeks—will be seriously curtailed, increasing the variance of CPI weights and publication aggregates and making it 

impossible to construct annual spending patterns at the individual 

household level.

•	 If a supported journal cannot sufficiently mitigate the problems

with the current diary, it will be impossible to get spending estimates at a fine level of category detail.

•	 The six-month supported journal in Design C is the most innovative of the collection methods in the three prototypes. It could be an 

alternative to a recall survey, albeit with compromises on the length 

of time covered. However, it requires modeling daily spending to 

96 categories of expenses for six months; there is no experience on 

which to gauge how well an operational version can be designed 

and implemented.

The panel made an effort to compare data collection costs across prototypes. This proved very difficult to do, and the panel had to make many 

assumptions and guesses. Thus these cost estimates must be considered 

as very preliminary, and used only as a general comparison across prototypes. More precise costs would require considerably more information 

and resources than the panel had available for its deliberations. However, 

they are useful in comparing the three prototypes and in calculating the 

very approximate sample sizes that might be possible in the current budget 

environment.

BLS provided the panel with basic costs on data collection from the 

2010 CE. It was difficult to extract the costs for initial screening for outBOX 6-1

Example: Calculation of Average Cost per Sample for Design A

Cost per household using a tablet:

 Tablet placement (twice) + Prorated cost of tablet + Remote monitoring + Inperson monitoring + Incentive

 $330 + (($200 + $20) / 6) + $200 + ($150 * 0.1) + $200 = $782

Cost per household not using a tablet:

 Paper diary placement and pickup (twice) + In-person monitoring + Paper

processing + Incentive

$660 + $300 + $100 + $200 = $1,260

Average cost per household, assuming 85% use tablet:

($782 * .85) + ($1260 * .15) = $854
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156 MEASURING WHAT WE SPEND

of-scope households and for contact with households that refused. Thus 

the panel focused on costs for completed interviews/diaries, making the 

assumption that the cost for screening and refusals would not vary greatly 

between prototypes. Following several conference calls with BLS and Census staff, the panel approximated the “budget neutral” amount for data 

collection for completed interviews/diaries as $16 million. This figure may 

not be very accurate, but it gives a base from which to make projections.

The panel used component costs provided by BLS for completed interviews and diary placements as a guide to provide very basic cost parameters 

(assumptions) for each prototype. The panel speculated on other costs. 

These cost parameters are provided in the report with the description of 

each prototype under Sample Size and Cost. The cost parameters were combined to create an estimated “average cost per sample” for each prototype. 

Box 6-1 provides the example of calculating this cost for Design A. This 

average cost was divided into the total cost to calculate an annual effective 

(completed) sample size. This number was rounded to avoid suggesting 

greater accuracy than this process could produce.

Table 6-4 provides a comparison of cost and possible sample size 

between the current CE and the three prototype designs. It is extremely 

important to note that these costs are for data collection only and for a 

mature data collection process. Any major redesign has many additional 

TABLE 6-4 Comparison of Key Elements of Prototypes with Current CE

Design A

Design B by Components 

Base

Intensive 

Subsample Total 

Sample size—Households 

(respondents)

18,700 12,200 800 12,400 

Total collections across waves 

(respondents)

37,400 36,600 1,600 38,200 

Weeks covered by direct 

reporting of expenditures

448,800 878,400 0 878,400 

Incentives per household $200 $300 $300 $319 

Cost—Total (respondents 

only—75% response rate)

$16,000,000 $13,900,000 $2,100,000 $16,000,000 

Cost—Per responding 

household 

$853 $1,138 $2,625 $1,311 

SOURCE: Developed by panel.
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costs that are not included here, including costs for development, research, 

testing, and retooling.

The sample sizes presented here are very general estimates of the effective sample sizes (net of a 25% nonresponse) that might be possible while 

remaining budget neutral.

To summarize, it is important to emphasize that extensive testing is 

necessary to determine which of the collection methods and their variants 

contained in the prototypes can be made operational. The prototypes embody the panel’s informed opinion about the best avenues to explore, not 

options from which to choose a survey design.

Using the Tablet PC for Self-Administered Data Collection

The panel proposes the use of tablet computers with wireless phone 

cards for supported self-administered data collection in all three prototypes as a way to solve some key problems with the CE. Lightweight and 

easy-to-use tablets represent stable (robust) technology, are commonplace, 

feature more than sufficient computing power, and are economical in price. 

In fact, their price continues to fall over time. This section provides more 

detail on the use and management of these tablets and the support system 

for their use.

For this data collection effort, a low-end tablet is likely to suffice. Their 

Design C by Components Current CE by Components

Base

Supported 

Journal

Household 

Profile Total Diary Interview Total

25,000 11,000 7,000 25,000 7,100 7,100 14,200

25,000 11,000 21,000 57,000 14,200 35,500 49,700

0 44,000 168,000 212,000 14,200 340,800 355,000

0 $150 $180 $108 0 0 0

$8,100,000 $5,800,000 $6,700,000 $20,600,000 $2,833,822 $13,086,524 $15,920,345

$324 $529 $962 $824 $399 $1,843 $1,121
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158 MEASURING WHAT WE SPEND

use by respondents could reduce the number of field representative visits 

and associated field costs. The resultant savings could be used to fund 

worthwhile incentives to facilitate respondent participation. Through selfadministration, interviewer effects would be minimized and data would be 

recorded on an ongoing basis, substantially reducing recall bias. Reliance 

on proxy reports could be reduced, as well. Since many people successfully 

use advanced self-administered applications on the Internet, adoption of 

a self-administered tablet data collection mode would not require large 

respondent training costs, especially if the data collection software were 

designed to be user-friendly.

These prototype designs would require an initial in-person visit from 

the field representative. The field representative would explain the survey, 

secure cooperation, deliver the tablet and demonstrate its use (i.e., train the 

respondent), explain the incentive structures, and answer questions. For 

some prototype designs, the field representative assists the respondent in 

self-administration of the initial survey module as a way of both collecting 

information and training on the tablet. The field representative would leave 

the tablet computer with the respondent, as well as a package in which to 

mail back the computer after data collection is completed. Self-administered 

data collection subsequent to the initial visit for the household would utilize 

the tablet to the greatest extent possible.

Technology Assumptions

This approach adopts established, relatively current technology. The 

only assumptions made about future technology are that (1) the wireless 

phone infrastructure will continue to expand and become faster, and (2) 

tablet computers are a viable platform for the foreseeable future (i.e., the 

next 10 years). Development software must be adaptable to future platform 

changes, but that is not expected to pose a problem.

The tablet can be situated in the respondent’s kitchen or on the dining 

room table, accessible to any of the household members charged with entering data. To be user-friendly, it will need to have a fast boot-up protocol, 

and all CE applications will have to execute very quickly with self-evident 

interfaces. Respondent training is expected to be short and to focus on the 

task completion (i.e., content and entry of data), rather than navigating 

the technology.

The tablet would house only necessary applications including logon, 

encryption, connection to the server, and the electronic instrument itself. 

As data are entered, they are sent to the server in real time. Such a system 

requires that the tablet be “locked down.” That is, it cannot be used for 

any other applications and non-CES applications cannot be loaded onto 

it. The sole exception would be if a limited number of popular free game 
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PATHWAY TO AN IMPROVED SURVEY 159

applications were installed as “incentives” to respondents to familiarize 

themselves with and use the tablet regularly.

The data collection application must have a simple, high-speed interface. For this reason, the application software is held on the tablet. Data 

are transferred immediately to the server. Data do not remain in storage 

on the tablet between activities with the respondent. Only secure data are 

communicated to the server, and not interface pages, routing information, 

or other application rules. A respondent can review the history of household entries at any time, and those data would be transmitted back to the 

tablet for review.

Respondents must be certain that their data are secure. Hardware, 

software, and procedures are built around secure protocols. Both the field 

representative and the technical support desk must be able to clearly explain 

how these data are held securely, in one place, on the data collection server. 

Respondents must also be aware that the use of these tablets represents 

better, more secure data collection than alternatives while reducing data 

collection costs.

Because relatively little consumer data are sent to the server at any 

point in time, wireless phone infrastructure is being proposed for communication. The coverage in the United States is extensive and ever increasing. 

Coverage for the CE target population is likely to be virtually 100 percent 

within several years. The use of this communication infrastructure means 

that a household’s Internet connectivity is irrelevant. Moreover, the link-up 

to the server would be immediate and transparent to the respondent.

Monitoring and Technical Support

Since data are received upon entry for tablet users, the respondent’s 

cooperation and compliance can be tracked by a centralized facility. For 

those who respond daily, it is possible to send positive reinforcement (e.g., 

a thank-you message) every time they log in. For those who lapse in their 

task, it is possible to intervene in a timely and effective manner with supporting reminders via phone, e-mail or text, or by mail. Ideally, a 24/7 

in-house technical support team would be maintained throughout the data 

collection period to address respondent messages and phone calls very 

quickly.

The field representative remains involved with the household as needed. 

The representative may revisit some households to assist with or to perform 

the data collection. The representative may need to retrieve the tablet from 

some households after administration concludes, although this would be 

minimized by the distribution of the return-mail packages. However, these 

actions would take place only if requested by the central facility.

The tablet would be lightweight, have a large and bright enough screen 
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160 MEASURING WHAT WE SPEND

to be readable by even those with vision problems, and would be sturdy. 

It would withstand many mailings between the respondent and the home 

office. At every trip to the home office, the tablet would be inspected, 

cleaned, and recertified for continued data collection. Tablet software could 

be updated when it is in the home office.

Implementation Program

A rich implementation program will inform the many details associated 

with this kind of data collection. Any research taken as part of this program 

needs to be focused on optimal approaches, not on technical feasibility. Research will be needed on human interactions, including interface, incentives, 

training, protocols, and support. Development of the necessary in-house 

production infrastructure would include server development, communications, and sample management/tracking systems.

The implementation program would be iterative. Goals for key rates 

(e.g., rate of acceptance, rate of cooperation, and tablet longevity) would 

be set and monitored. Shortfalls would be quickly addressed via tailoring, 

using modified or new approaches. More details are provided in “Targeted 

Research Needed for Successful Implementation of Design Elements” on 

p. 178.

The Respondent

Under a successful implementation, most respondents would be able to 

execute the tasks via tablet within a few minutes. A well-designed interface 

would make long training sessions unnecessary. Field representatives would 

be able to assess respondents quickly to determine the most appropriate 

training or data collection approach.

Respondents are busy and do not have time to deal with slow interfaces and software awkwardness. The model for the interface would be 

similar to that of TurboTax rather than the linear flow methodologies of 

today’s self-administered questionnaires. This means that the app would 

be built in modules, and the user could choose to fill in the information 

in any order that is convenient. The user can also come back to any item 

and make a change at any time. Alternatively, the user (respondent) could 

choose to use a structured interview approach for moving step-by-step 

through the app.

The use of the tablet would be as simple as the following:

1. Touch the on button.

2. Log on.

3. Observe the welcome and messages (can get past this easily).
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4. View the data collection module, which pops up fast, is easy to use, 

and is self-evident (visually coherent).

5. Enter data, with computer response time being virtually instantaneous.

6. When entry has been completed, hit the off button.

Delivery and Mail

The first time the tablet enters a household, it is brought by a field representative. The field representative leaves behind the tablet and a mailer 

package, and explains the incentives. After the recording period, the respondent slips the tablet into the mailer and sends it back. In subsequent waves, 

the tablet is mailed to the household and back to the home office. Since no 

data are held on the tablet, there is no security issue.

Under each of the three prototype designs, the panel estimates a loss rate 

of 10 percent per year for tablets. (This loss figure is stated as part of the 

sample size and cost assumptions under each of the three prototypes.) This 

estimate is relatively low because a tablet configured to allow only authorized survey activities would be of little later use to a household. However, 

in the next subsection, “Incentives and Cooperation,” the panel presents 

an option to allow some free game applications on the tablet as a way to 

encourage familiarity with the tablet. If this is done, then the tablet would 

become more valuable to the household and the loss rate could be higher. 

BLS should consider these issues and may want to hold final incentive payments to households until the tablet is returned. As an alternative, BLS could 

consider the tablet to be part of the incentive package and plan to leave it 

with the household. It is clear that the alternative of sending a field representative to pick up each tablet would add significantly to the survey cost.

Incentives and Cooperation

Incentives and monitoring are integrated. Respondent behavior is 

monitored constantly. Daily logging on is encouraged through the use 

of participation incentives and other forms of positive feedback. Longerterm engagement could also be enhanced through use of popular free 

game applications on the tablet. If the respondent fails to log on for a 

period of time, then an immediate automated intervention would be issued. This would start with the field representative making a call and 

offering assistance. If necessary, the field representative could revisit the 

household to encourage the use of the tablet, or to switch the respondent 

to an alternative mode of collection. The field representative would have 

access to respondent tracking reports so that intervention could be timely 

and effective.
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162 MEASURING WHAT WE SPEND

Home Office Support

From the perspective of the survey organization, these prototype designs shift activities to a more centralized basis, allowing more consistent, 

frequent, and responsive monitoring of data collection from a centralized 

facility. The role of the field representative is recast to one of gaining cooperation, training, modeling use of the tablet, and providing field-based support, rather than being solely an interviewer or supported journal-purveyor 

in a traditional sense. This change provides savings on field costs. Technical 

support staff would be available to respondents 24/7 (ideally) and would 

typically answer a call within a few rings. Possibly the support person can 

see the same screen as the respondent sees.

Tracking and assessment algorithms would run on the server in order 

to detect patterns of deception, respondents not cooperating, and so forth. 

Any issues would result in an intervention. Cooperation would be also 

quickly recognized with positive reinforcement. Incentives would be handled 

quickly, perhaps on an ongoing basis.

Incorporating Cognitive Changes to the Paper-Supported Journal

The panel recommends that a paper instrument be available for use 

by respondents who cannot or will not use a tablet computer to record 

and submit expenses. The current Diary booklet should not be used and 

the panel recommends a redesign (Recommendation 6-5). Considerable 

improvement can be made in the current Diary to ease comprehension 

and use. In addition, the structure of the tablet-supported journal and new 

paper-supported journal need to be aligned to the extent practical so as to 

minimize mode effects in data collection.

Recommendation 6-5: A tablet computer should be utilized as a tool 

in supported self-administration. However, a paper option should continue to be available for respondents who cannot or will not use a tablet 

computer. Visual design principles should be applied to redesigning the 

paper instrument in a way that improves the ease of self-administration 

and is aligned with the tablet modules.

With an eye to redesigning the paper version, the panel concludes that 

the current diary lacks a clear navigational path and linear flow that allow 

respondents to proceed page by page through the diary completion process. Currently the instructions are located throughout the booklet, where 

they seem to fit the page structure but force the respondent to search for 

information. The panel recommends eliminating “daily” report pages. The 

breaking apart of each category by day of the week and overflow pages 
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creates a larger diary booklet and makes it much harder for respondents 

to review the diary and see whether they have forgotten to add anything. 

With current content, it may be more effective to color code different sections of the booklet for each category of expenditure, and allow household 

members to keep a continuous listing of each expenditure category for the 

week. This structure would also work better for individuals who collect 

receipts and do not record expenditures each and every day, an occurrence 

that seems increasingly likely as alternative ways of purchasing and paying 

for items continues to grow.

The panel recognizes that the Diary has been revised in recent years, and 

the current format is considered a substantial improvement over previous 

versions. However, visual layout and design principles have continued to 

improve, and they need to be applied to producing a new paper-supported 

journal. This will require research aimed at testing to produce as much 

consistency as possible between how people respond to the tablet and paper 

forms of data collection.

ROADMAP TO GET THERE

The road to completing a redesign of the CE is difficult but has a very 

important destination. BLS began this journey in 2009 with the initiation 

of the Gemini Project. This report from the National Research Council 

provides some additional mapping for the future. The panel sees a number 

of steps ahead:

•	 Prioritize the uses of the CE.

•	 Conduct a feasibility study of relevant redesign protocols.

•	 Make redesign decisions based on the prioritization and assessment.

•	 Incorporate the use of newer technology as appropriate in the new

design.

•	 Update the capabilities of BLS staff and outsource to find needed

expertise.

•	 Conduct research that is targeted to successful final implementation

of design elements.

This section provides some additional guidelines for these steps.

Timetable and Priorities

It is not the panel’s role to impose a specific timetable on BLS for investigation or implementation of the alternative designs discussed here. However, the panel believes that development of a targeted and tightly focused 

plan is necessary if BLS is to achieve a redesign within the next five years. 
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164 MEASURING WHAT WE SPEND

To that end, the panel suggests a prioritization of research and development 

activities and recommends that BLS adopt an ambitious timetable for working toward an alternative design.

A key initial step is to identify and prioritize the uses of the CE. A key 

finding of the panel is that many of the problems faced by the CE can be 

attributed to the multiple competing demands on the survey. In trying to 

be all things to all people, and to achieve maximum breadth and depth, the 

CE surveys have become unwieldy and increasingly unreliable. Without a 

prioritization of key purposes of the CE, and a corresponding acknowledgment that all purposes will not be equally well met, any redesign is unlikely 

to be a successful venture. Making the difficult decisions about what is to 

be sacrificed in order to improve the CE overall is a necessary first step on 

the redesign path. Without this, the remaining steps are unlikely to yield a 

successful outcome. The panel recommends that BLS undertake this process 

of the prioritization of key uses, with buy-in from stakeholders, as soon as 

possible, and believes that it can be done within six months.

Another key element of the panel’s recommendations is that some form 

of tablet-based instrument, used for both recordkeeping and reporting of 

expenditures, as well as for more traditional computerized question-andanswer process, is an essential ingredient in a new design. A number of key 

untested assumptions need to be addressed before proceeding with using 

this tool in alternative designs, including (1) whether the use of tablets will 

reduce burden and improve the quality of reporting over the paper-based 

diary and the interviewer-administered quarterly recall surveys; (2) what 

proportion of households will be willing to use tablets; and (3) if the introduction of tablets will reduce resistance to participation on the CE such that 

the overall field effort is reduced without negative effect on response rates. 

Answering these questions is critical in order to proceed with any of the 

alternative designs. A first priority is to design, build, and test a prototype 

tablet instrument. The panel believes this can be done within two to three 

years, but is likely to require outside help, especially from those with experience building tablet applications, and those familiar with the hardware and 

software issues related to deploying this technology.

If the tablet-based data collection approach proves feasible, other research and operational questions remain. They include questions such as 

whether varying the recall length for different expenditures would be effective to reduce burden and improve data quality; whether asking about 

broader categories of expenditures rather than the detailed items would 

similarly improve reporting; and how to structure incentives to maximize 

response. Some of these are described in more detail in the sections below. 

The panel views these as important, but contingent upon the successful 

implementation of a tablet-based approach.

Again, the panel is of the opinion that a precise timetable from them 
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PATHWAY TO AN IMPROVED SURVEY 165

(the panel) for implementation would not be helpful to BLS at this stage. 

Rather, it is recommended that BLS lay out a path to implement one of the 

three alternatives (or a different combination of the components of these 

three designs), with key decision points along the way. The feasibility studies outlined in Recommendation 6-3 would be a key component of this 

plan, and would be a key assessment on which to base further decisions.

These and other decision points need to be identified along with a clear 

understanding of the potential outcomes from research that will drive those 

critical decisions. Additionally, the alternative actions stemming from the 

decisions need to be clearly articulated. In other words, BLS should identify 

criteria for success (or continued research and development) at each critical juncture in the process. This will determine whether sufficient evidence 

exists to proceed to the next stage of development, or if alternative paths 

need to be followed. Some of the work can be done in parallel with work 

on the critical path, but it should not detract from the resources focused 

on addressing the key issues and reaching the key decision points within a 

reasonable time frame.

Recommendation 6-6: BLS should develop a preliminary roadmap 

for redesign of the CE within six months. This preliminary roadmap 

would include a prioritization of the uses of the CE, an articulation 

of the basic CE design alternative that is envisioned with the redesign, 

and a listing of decision points and highest priority research efforts that 

would inform those decisions.

Guidelines for the Use of Incentives

The purpose of incentives is to provide motivation to the respondent to 

complete a data collection activity and to take the time to provide accurate 

data. The CE in its current state and its future redesign will require considerable effort from respondents. It is the panel’s opinion that an appropriate 

incentive program will be needed as a part of this program. Monetary incentives are used in federal surveys but their use is not common. The Office 

of Management and Budget must approve each use of monetary incentives 

and look for strong justification based on criteria such as improved data 

quality, reduced burden, and/or improved coverage of specialized populations, and/or for surveys that are particularly complex (U.S. Office of 

Management and Budget, 2006). The panel believes that these criteria can 

be met by a carefully designed incentive structure for the CE.

This section provides a short background on incentive use in surveys 

and some guidelines for developing an incentive structure for the CE. The 

exact details of that structure, the exact kind and amount of incentive, and 
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166 MEASURING WHAT WE SPEND

the appropriate placement of incentives within the data collection window 

can only be determined with appropriate CE-specific research.

Overview and Basic Guidelines from Survey Research

The use of “incentives” is a standard and accepted component of many 

survey efforts in the United States. As Singer (2002, p. 3) appropriately 

described, “Incentives are an inducement offered by the survey designers 

to compensate for the absence of factors that might otherwise stimulate 

cooperation.” Interesting, however, there is less agreement within the research community regarding why incentives work, or at least no single 

theory describes when and why some incentives work and others do not. 

Some view an incentive as a “social exchange” between the researcher and 

the respondent. By providing something of value to the respondent, the 

respondent should, in turn, provide his or her cooperation. Others view it 

as an economic exchange, whereby the respondent views the offer to participate in terms of “costs” and “benefits,” and use of incentives can help 

to improve the perception of “benefits.” In reality, both factors are likely at 

work, with differential effects of each seen across different studies, populations, and contexts.

Typically, researchers use incentives to achieve one or more of the 

following goals: (1) improving overall response rates, (2) enhancing the 

characteristics of an unweighted set of survey respondents, (3) decreasing 

the likelihood of missing data or other factors that affect data quality, or (4) 

reducing the total costs of fielding a survey (Brehm, 1994; Church, 1993; 

Dillman, Smyth, and Christian, 2009; Singer et al., 1999).

In practice, incentives are sometimes used uniformly across all sampled 

units/respondents, or alternatively they may be used differentially across 

populations, contexts, modes, etc. In the first instance, all households/

respondents receive exactly the same form, level, and timing of incentive. 

This is often done either for reasons of “fairness” (trying to treat all respondents identically) or for operational efficiency (simpler to execute and 

track). The downside is that incentives may be used where they are not 

really needed and/or the amount required to obtain participation from a 

particular subgroup or context may be insufficient. The use of differential 

incentives, in contrast, is based on the premise that incentives should be 

targeted to populations or points in the survey process where burden is 

highest or the likelihood of response is lowest (i.e., where task or burden 

may result in differential nonresponse) (Link and Burks, 2012; MartinezEbers, 1997). Use of differential incentives is often justified, therefore, based 

on effectiveness, efficiency, and “need” basis, but can be criticized for no 

longer treating all sampled units identically.

In terms of form and timing, incentives come in a variety of forms and 
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PATHWAY TO AN IMPROVED SURVEY 167

are most effective when targeted at the points in the process where they will 

be most effective. Numerous studies have examined the efficacy of different 

types of incentives, such as cash, checks, cash cards, sweepstakes, points 

and gifts, virtual rewards (e-badges, access to unique online content or 

functions), donations to charity, e-coupons, and so on (Antin and Churchill, 

2011; Balakrishnan et al., 1992; Bristol et al., 2011; Trussell and Lavrakas, 

2004; Warriner et al., 1996; Zichermann and Cunningham, 2011).

While cost is always an important factor, considerable care needs to be 

taken in matching the appropriate form of incentive to the specific population of interest to achieve the desired goal or outcome (i.e., cooperation, 

long-term compliance, higher data quality, etc.). There are also temporal 

aspects to the use of incentives. They may be paid upfront at the time of the 

survey request (“non-contingent incentives”) or paid upon completion of 

the task (“contingent incentives”) (Bensky et al., 2010). Incentives may be 

used at different points in the survey process—for recruitment, at the start 

of a survey, after the survey, or partial over time in the case of a panel or 

longitudinal effort. The value or form of incentive can also be different at 

these different junctures. Again, the researcher needs to consider carefully 

the form, amount, and timing of the incentives throughout the data collection process to achieve the desired study goals.

Cost is an important consideration in the use of incentives. Some researchers view incentives as an “additional cost” to their study design and 

will exclude them or cut them at the first sign of budget issues. In reality, if 

used effectively, incentives can help to reduce costs and become an essential component of the overall survey design (Brennan, Hoek, and Astridge, 

1991). If used effectively, a modest incentive can often gain cooperation 

from a respondent far less expensively than having an interviewer try to 

convince a respondent to participate. Use of an effective incentive design 

can, therefore, reduce more costly interviewer time and/or achieve a higher 

rate of participation than when incentives are not used.

Guidance for the Consumer Expenditure Program

It is critical that some form of incentive structure be put in place in 

the redesigned CE regardless of what develops as the final data collection 

design. The reasons for this are cost-efficiency (e.g., using incentives to 

help reduce field time, labor costs, and other expenses) and as an offset 

of respondent burden. The exact form, amount, placement, and timing of 

the incentive structure for any given design will require pre-deployment 

research and testing. While lessons can be learned from a thorough review 

of prior published studies on incentives, the one truism in the use of incentives is that there is no single “magic bullet.” The effectiveness of a given 

incentive design is directly tied to the population of interest, nature of the 
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168 MEASURING WHAT WE SPEND

data collection request, modes of data collection, length of participation 

requested, and other factors. Prior studies do, however, provide a guide in 

terms of a starting point and most effective approaches:

1. Cash is always the most effective motivator—monetary incentives,

particularly when paid in terms of cash (as opposed to check, cash 

card, or e-payment), have a more positive effect than nonmonetary 

incentives even when the relative value is equal.

2. Prepaid incentives work better than promised or post-paid incentives—an incentive provided to the respondent at the outset of the 

survey request appears to have a much greater impact on participation than does the promise of an incentive upon completion of a 

task, even if the value of the up-front incentive is somewhat smaller 

than the amount of the promised incentive.

3. Incentives are most (and sometimes only) effective if utilized at the

correct points in the survey process. For instance, if an incentive is 

offered for participation, it will be most effective if mentioned at 

the outset of the recruitment conversation as opposed to after the 

respondent has effectively agreed to participate.

4. In panels or longitudinal efforts, incentives should be used throughout the process to maintain compliance, rather than provided entirely up front or at the completion of the panel. Ongoing rewards, 

both tangible and intrinsic, are important for maintaining longterm participation.

5. Use of differential incentives (e.g., providing differing incentive 

forms, amounts, or timings to different sets of individuals based 

on varying degrees of burden or likelihood of cooperation) should 

be seriously considered for any incentive structure to optimize the 

efficient use of these funds.

6. Larger incentives ($100+) should be considered in any instance

where the data collection request is particularly intrusive or 

sustained.

7. Intrinsic incentives (i.e., nonmonetary motivational approaches)

should be a part of any panel or long-term data collection effort to 

help sustain respondent interest and motivation. These are a range 

of incentives of this type, including use of “e-badges” (electronic 

notices in the form of a badge) for completion of successful tasks 

or meeting milestones; status levels (i.e., silver, gold, platinum) 

for reaching critical milestones or longevity; and random notices 

congratulating or thanking the respondent for their participation 

(Antin and Churchill, 2011; Zichermann and Cunningham, 2011). 

These types of incentives are easily developed within a tablet envi-
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PATHWAY TO AN IMPROVED SURVEY 169

ronment; however, there is little research currently on the effectiveness of these types of strategies on data collection activities.

Incentives for the Three Prototype Designs

Each of the three prototype designs discussed in this chapter recommends the use of incentives. The type, amount, and placement of those 

incentives need to be researched and tested. The details proposed under 

each prototype give an overall sense of the likely size of the incentive and 

the need to incorporate incentives into the overall cost structures.

In developing the prototypes, three additional ideas surfaced and are 

included here to generate further discussion about potential motivation of 

respondents in the CE.

•	 Provide households with a financial profile, comparing their expenditures with other households in the same income bracket and 

demographics;

•	 Install a limited number of popular applications (for functional use

or to play games) on the tablet as an “incentive” to respondents to 

familiarize themselves with and use the tablet more regularly; and

•	 Give the tablet to the household as the post-paid incentive at the

end of the more intensive data collection panels.

Recommendation 6-7: A critical element of any CE redesign should be 

the use of incentives. The incentive structure should be developed, and 

tested, based on careful consideration of the form, value, and frequency 

of incentives. Serious consideration should be given to the use of differential incentives based on different levels of burden and/or differential 

response propensities.

Guidelines for Adopting Newer Technology 

and Incorporating External Data

The panel has proposed three prototype designs for the CE that make 

use of a tablet computer. Those prototypes do not include recommendations 

for use of any specific external datasets. However, the panel encourages BLS 

to explore other technology and administrative data sources as they move 

into the future. This section provides general guidelines on this topic.
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170 MEASURING WHAT WE SPEND

Adopting Newer Technology

It is important for the CE to pursue a research agenda that explores 

and adopts new technology and considers the utility of public and private 

administrative records. However, such an agenda requires discipline since 

neither technology nor administrative records ought to be pursued for their 

own sakes. It is important for the agenda to promote a strategic direction

for continuous improvement, creating reductions in:

•	 Data collections and processing costs—respondents entering supported journal data via computer could reduce data collection and 

processing costs; similarly, the use of administrative data could 

reduce the amount of information that is needed from the respondent, further reducing data collection costs;

•	 Measurement error—reductions can be achieved by tailoring the 

technology to the user, whether the user is the respondent (completing a supported journal) or the interviewer (administering a 

questionnaire); coupling this with the collection of aggregated data 

(i.e., collecting less detail about purchases) will ease burden for 

both the interviewer and the respondent; and

•	 Statistical variance and complexity of the CPI estimate—the incorporation of administrative data in the CPI estimation process could 

in principle result in increased statistical precision and reduce data 

collection costs by requiring that fewer items be collected.

Two additional factors are important to be incorporated into an agenda 

that considers technology and administrative records for the CE. The first 

is robustness of technology. Releases of new technology (both hardware/

firmware and software) have accelerated over the last decade, and this 

trend is expected to continue. Relatively old technology such as palm-pilot 

computers have been eclipsed by smart phones, and the speed and capabilities of smart phones are growing rapidly from year to year. And while 

laptops have found a place in society for over two decades, tablet-style 

computers (which are also relatively old technology but only about half as 

old as laptops) have begun enjoying a recent upsurge in development and 

use. These are but two examples of how quickly the landscape of technology is changing. The choices of equipment for CE data collection must be 

sensitive to such change. Because the pace of technological development is 

expected to continue to accelerate for the foreseeable future, the CE would 

not be served well by selecting a technology that would be unavailable or 

no longer supported by the time testing and piloting have been conducted. 

Instead, the CE needs to identify and test technology that is robust with 

respect to technological advancement.
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The second factor lies in risks associated with the indeterminate availability of administrative data. While administrative data hold promise of 

creating great efficiency, their perpetual availability over time cannot be 

guaranteed. The biggest risk would be to identify a solution to the CPI that 

relies heavily on administrative (auxiliary) data, only to have that source 

of data become unavailable. There are real risks of this in the current 

volatile economic environment. Governmental budget cuts and/or private 

sector changes, such as business closings and release restrictions of sizeable 

magnitudes, are to be expected in the coming years. And societal change, 

including heightened concerns over privacy, could limit the availability of 

data that are currently accessible from other sources. There is also concern about potential liability risks for BLS to access and store individual 

financial data.

It is important for BLS to pursue the exploitation of administrative 

records. However, the panel believes that it would be problematic for BLS 

to convert irreversibly to full reliance on such solutions unless there is full 

confidence in the perpetual availability of those data. In the absence of 

such confidence, the prudent approach would be to maintain some level of 

primary data collection as a hedge against the risk of the loss of administrative records, as well as a checking mechanism to validate the quality of 

the administrative data.

The integration of technology and/or administrative records into the 

CE (and the CPI) is best accomplished as a natural part of continuous 

process improvement. A transition window of five to seven years could 

be utilized for new technology absorption into CE design and operations. 

Potentially advantageous technologies could be identified and prioritized 

on an annual basis, followed by a process of feasibility testing, assessment, 

planning, piloting, and adopting into CE operations. Such a process requires that the CE design maintain experimental panels integrated into the 

sample design specifically for the purpose of field-testing and evaluation.

Incorporating External Data

The panel developed recommendations regarding the use of extant 

administrative data for the CE. The potential use of external records or 

alternative data sources as a replacement or adjunct to current survey data 

for the CE is often raised in discussions of a CE redesign. Whether at the 

aggregate or the micro (respondent/household) level, the appeal of “readily available” information is that it appears, at first glance, simple to use. 

Although such information might hold great promise, we also realize that 

such use is accompanied by corresponding great risk, particularly from 

a cost/quality trade-off perspective. That said, there are scenarios under 

which these data could be quite useful, in particular as category-specific 
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172 MEASURING WHAT WE SPEND

quality assessment tools at the aggregate level and “memory joggers” at 

the household level.

Use of aggregate data. Aggregate retail data from scanner receipts can 

provide greater chronological and item detail, with potentially greater accuracy, than traditional data collection methods—offering opportunities 

for significant quality improvements for CPI budget shares and aggregate 

spending tables. The potential benefits include more data with less variance, 

as well as better data, leading to less bias. That said, use of aggregate data 

is not likely to yield sufficient coverage of all goods required by BLS; therefore, aggregate data cannot replace the current interview process in whole. 

Several areas need further exploration, including use of aggregate data in 

the CE process to (1) replace some of the detail (and hence burden) of the 

current CE interview process, (2) inform weighting controls, or (3) provide 

data quality checks for specific retail goods or sets of items (i.e., channels). 

Within specific channels or particular types of products, these data may be 

quite good and sufficient for weighting or assessment purposes. Retail data 

on item, price, and quantity could be obtained via two avenues: (1) directly 

from the retailers, with BLS serving as the data aggregator, or (2) via thirdparty companies that specialize in the aggregation of retail information.

Collection of these data by BLS directly from retailers has appeal in 

that the methods can be clear and well defined and the agency can exert 

direct control over the operation, ensuring suitable levels of quality and 

standardization. There are several downsides, however, to such an approach. First, it would require development of a considerable infrastructure, 

including retailer sampling, recruitment, regular data capture, considerable data cleaning/processing, and verification. The data requested from

retailers would not be “plug-and-play” because retailers have their own 

(often unique) methods, units, formats, time frames, coding schemes, and 

standards of quality for the information they retain for business purposes. 

It is often the role of the data aggregator (in this case, BLS) to assume the 

responsibilities of translating collected data into a standardized useful form. 

The associated logistics and costs would likely be substantial. Undertaking 

such an endeavor not only would be expensive and time-consuming, but 

also would introduce an incremental data collection system with its own set 

of issues and problems, while not eliminating or even meaningfully reducing some of the current issues experienced with the CE survey approach.

Alternatively, several third-party vendors exist who specialize in the 

collection, cleaning, and distribution of retail information. These organizations could likely provide data on type, quantity, price, distribution 

channel, location, and other information at a far lower cost relative to that 

associated with BLS collecting the same data on its own. Unfortunately, 

these vendors vary considerably in the retail products and channels they 
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cover, as well as their geographic reach, methods for collecting information, and data completeness. Additionally, a number of potential problems 

can limit the utility of the data regardless of the vendor, including but not 

limited to:

•	 missing or inaccurate (often due to imputation) information;

•	 use of nonprobability samples, leaving in question the statistical

properties of the data;

•	 questionable or undocumented collection and aggregation methodologies; and

•	 discrepancies between aggregated data and those collected by BLS,

which can be attributed to a variety of sampling, collection, and 

aggregation differences.

An unexpected sudden change in methodology or wholesale cessation 

of data collection by the vendor could leave a critical gap in the CE estimation process.

Aggregate retail data are likely of best use for the CE, therefore, if information about specific products or channels is purchased from third-party 

vendors, not collected and aggregated directly by BLS. A thorough vetting 

process for such data before use is important so that the limitations of the 

data are well understood.

Use of alternative microdata. The previous section addressed administrative data sources from retailers. But microlevel data at the respondent 

level could play a role in reducing cost and/or increasing accuracy in the 

CES. New types of electronic data—financial records, budgeting software, 

store loyalty card information—may also be captured and utilized at the 

household or respondent level. Such data likely have the greatest utility 

in enhancing recall during the CE survey, but may also in some instances 

serve to replace survey elements, thereby reducing respondent burden, recall 

(measurement) error, and data collection costs.

These data may be used in one of two ways by the CE: (1) as memory 

cues, i.e., tools to aid respondents in their reporting of purchases that they 

may have otherwise forgotten and/or misreported; or (2) as data to be extracted and used in place of self-reported information.

As memory-jogging devices, microdata records could be printed or 

reviewed on a computer screen at the time the interview is conducted. 

Respondents would be encouraged to review their records to remind themselves of specifics of a purchase (date, place, item, and price). Utilizing records in this fashion would increase the time burden faced by respondents, 

but it could have a positive effect on data quality by reducing reporting 

error.
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Extracting data directly from Internet banking, financial software, or 

loyalty card systems, on the other hand, generates a number of difficulties 

related to:

•	 permission from individuals to access their private records;

•	 accessibility if access is required through a third-party entity (such 

as a bank, credit card company, or loyalty card data repository);

•	 differential coverage because use of and access to such information 

is not universal and likely spread disproportionately within the 

population;

•	 process complexity by having to deal with multiple interfaces and 

backend data systems;

•	 data incompatibility when data elements from the source do not 

coincide with the categories and units required for the CE;

•	 incongruent reference periods that differ from CE requirements;

•	 data discrepancies, when internal illogical and/or missing microdata are encountered; and

•	 operational challenges with data extraction, cleaning, and verification. The extracted data would need to be processed along a 

separate path from the CE survey data, then integrated, leading 

to both time delays in reporting and additional infrastructure and 

resources.

Microdata from households or respondents may be of greatest utility to 

understanding the CE if these data are utilized as reminders and memoryjogging tools to enhance the survey process and reduce recall error. Some 

data elements may also be able to be gleaned from electronic sources and 

used to replace current survey items; however, this would introduce a significant new set of processes for the extraction, cleaning, verification, and 

integration of these data.

In sum, use of external data sources may be of some value in a redesigned CE process. The incremental benefits would need to be closely contrasted with the real costs of infrastructure, time, and resources required. 

If used in a targeted and judicious manner, both aggregate and microdata 

from such sources could be an effective means to improve overall data quality for the CE. With this section as context, the panel proffers the following 

suggestions and an overall recommendation (Recommendation 6-8):

•	 Identify from vendors and aggregate retail data sources appropriate for use in a five-year exploratory process that has key annual 

decision points based on experimentation and testing to establish 

the cost and measurement properties of adopting and incorporating 
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PATHWAY TO AN IMPROVED SURVEY 175

the capture of such data in place of currently collected microdata 

items.

•	 Identify specific microdata items that could be obtained by consent from administrative records (e.g., mortgage records, bank 

statements, grocery store club cards) that could be incorporated 

as memory cues in the collection of retail purchase data, with a 

similar five-year adoption window (including associated annual 

decision milestones).

Recommendation 6-8: BLS should pursue a long-term research agenda 

that integrates new technology and administrative data sources as part 

of continuous process improvement. The introduction of these elements should create reductions in data collection and processing costs, 

measurement error, and/or the statistical variance and complexity of 

the CPI estimate. The agenda should address the robustness of new 

technology and a cost/quality/risk trade-off of using external data.

Updating Capabilities

The contextual landscape for conducting national surveys is changing 

at an increasingly rapid pace. Because of this, it is no longer possible for 

a survey to be conducted in the same way for decades or even for a single 

decade at a time. Successful survey vendors respond to this environment 

by building an adaptable staff with complex methodological and statistical 

skill sets, and by continuously investigating new sample designs, survey 

methods, and estimation strategies that anticipate future changes.

Updating Internal Staff Capabilities

In light of this reality, agencies that sponsor and conduct surveys, such 

as BLS, need to build and maintain flexible and capable organizations and 

staff. BLS has a very capable group of statisticians and researchers on staff. 

However, a substantial focus on staff skills and organizational function is 

required in order to effectively respond to these changes and maintain (or 

improve) the quality of survey data and estimates. Of particular importance 

is to facilitate ongoing development of novel survey and statistical methods, 

to build the capacity for more complex estimation strategies required for 

today’s best survey designs, and to build better bridges between researchers, operations staff, and experts in other organizations that face similar 

problems.

The panel offers the following suggestions, followed by Recommendation 6-9.
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176 MEASURING WHAT WE SPEND

•	 Develop a proactive capacity to identify changes in the CE survey context and implement research into novel survey methods 

that address emerging conditions and behaviors in respondent 

populations.

The BLS organization and its staff must devote a greater share of 

resources to an active and responsive research program that focuses on 

emerging technologies and behavioral patterns, rather than today’s dominant survey modes. It is important to develop the capacity to study the 

effects of alternative methods within the context of the actual production 

survey, not only to evaluate which method is most effective, but also to be 

able to quantify the impact of a methodological change on key estimates 

from the survey.

For any project, the focus will be to contribute to the next generation 

of survey methods as they apply to BLS survey settings, rather than to 

pursue incremental changes from past methodologies. It is of paramount 

importance to conceptualize and evaluate methodologies in the context of 

total survey error and to quantify the impact of multiple sources of error 

(e.g., coverage, nonresponse, measurement, and processing errors).

To accomplish the above, BLS will have to hire new staff or train existing staff in a variety of areas. Several staff members will need to focus on 

identifying and acquiring administrative or commercial data to supplement 

data from the CE surveys. In the process, an evaluation of the quality and 

accuracy of the administrative records will need to be performed. Given 

that the CE redesign will involve both pilot and large-scale field tests, staff 

trained in experimental design will be needed to conduct and evaluate the 

results of this research. Both quantitative and qualitative methods must be 

used. The required quantitative skills are relatively well known, but the 

qualitative methods will go beyond conducting focus groups and cognitive 

testing. They include the ability to understand the effects of changes in 

methodology on survey operations and data collection personnel, such as 

how implementation of new procedures might differ across regional offices.

•	 Develop the ability to evaluate and implement more complex statistical methods for sampling, imputation, and model-assisted and 

model-based estimation to balance the demands of clients with 

minimizing survey burden and costs.

Given the complexity of BLS surveys and the way they will need to 

be altered to accommodate the current survey landscape, standard designbased estimators will not suffice. BLS statistical staff will need to develop 

more current methodological expertise for a range of modern statistical 

methods. For example, working knowledge is needed of imputation meth-
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PATHWAY TO AN IMPROVED SURVEY 177

ods that produce multiple values for planned or unplanned missing data 

from questionnaires, along with an understanding of how estimates and 

their standard errors can be generated by users. In addition, leveraging administrative and commercial data on expenditures will necessitate expertise 

in statistical methods for data linkage and integration. Estimation methods 

will require greater reliance on models and potentially the ability to create 

synthetic (fully imputed) datasets that can provide users with information 

to measure consumer behavior over time.

BLS staff must be hired or trained to carry out these activities. Knowledge of sampling techniques and weighting will not be enough. More 

expertise is needed in model-assisted and model-based estimation methods 

for sampling, imputation, estimation, data integration, and error modeling 

to generate data products, evaluate methodological research, and quantify 

error in estimates (including the impact of methodological changes).

•	 Develop a more fluid bridge between operations, research, and 

expertise in other organizations.

More flexibility will be gained if research and operations staffs have 

closer ties. Production staff can help think through the practical issues that 

might arise with a new method (e.g., what might work well, what problems 

could arise) and gain exposure to possible future changes in the survey well 

before they are called upon to implement them. Research staff may develop 

more effective experiments and gain an understanding of aspects of data 

collection they are not familiar with. However, it will be important for 

program staff and research staff to have the technical abilities necessary to 

communicate with one another. This means that the two staffs must have a 

basic understanding of what each will bring to the table for solving both the 

statistical and operational problems that are sure to arise in implementing 

any new CE survey design.

Other agencies have extensive expertise in areas that will be of interest 

to BLS as it redesigns the CES and other surveys. For example, the Census 

Bureau, which currently has responsibility for the CE data collection, has 

expertise in using administrative data to augment survey datasets and is 

devoting considerable energy to expanding its abilities in this area. Census 

staff have also conducted research in survey designs that administer partial 

questionnaires to each respondent. Joint research endeavors can be used to 

leverage expertise in these areas.

In addition, where institutional barriers prove detrimental to conducting responsive research, it may be wise to develop partnerships with survey 

vendors who are able to provide a quicker and more effective research 

service than is possible within BLS.
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178 MEASURING WHAT WE SPEND

Recommendation 6-9: BLS should increase the size and capability of 

its research staff to be able to effectively respond to changes in the 

contextual landscape for conducting national surveys and maintain 

(or improve) the quality of survey data and estimates. Of particular 

importance is to facilitate ongoing development of novel survey and 

statistical methods, to build the capacity for newer model-assisted and 

model-based estimation strategies required for today’s more complex 

survey designs and nonsampling error problems, and to build better 

bridges between researchers, operations staff, and experts in other 

organizations that face similar problems.

Obtaining Necessary Expertise Through Others

The development of tablet-based applications requires technical expertise that is likely not available at BLS or the Census Bureau at present. 

Rather than take the time to develop that expertise in-house, the panel urges 

BLS to pursue outside expertise to speed up the development and evaluation 

of tablet-based applications. This will require detailed knowledge of the 

development environment (e.g., Android, Apple iOS) and familiarity with 

data collection tools such as those being envisioned for the CE. Access to 

design and usability expertise will also be critical for the successful development of such applications, which will likely require close collaboration 

with BLS subject-matter staff. But relying on in-house expertise to develop 

the apps would likely result in development delays and possibly suboptimal 

designs. If BLS decides to pursue the tablet path to redesign, developing 

requirements for such contract work and getting outside experts engaged 

as soon as possible will be critical to the success of the redesign.

Recommendation 6-10: BLS should seek to engage outside experts and 

organizations with experience in combining the development of tablet 

computer applications along with appropriate survey methods in developing such applications.

Targeted Research Needed for Successful 

Implementation of Design Elements

The panel views the CE redesign not as one major effort, but as an 

ongoing process to continually address changes in the population and in 

survey methods. However, it is important to set priorities for aspects of the 

design that need the most immediate attention to achieve basic change. The 

CE survey methods group at BLS has undertaken many important projects 

to better understand survey errors and identify design features that can 

help reduce these errors. The panel’s objective is to provide guidance on 
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PATHWAY TO AN IMPROVED SURVEY 179

important areas for further research and assist in their prioritization. Below, 

the pathways for further research are divided into those needed to inform 

improvements to the surveys and those needed to inform the general design 

that has been suggested.

Research Needed to Support the CE Redesign

The Bureau of Labor Statistics will need to conduct research to support 

and inform the redesign and its implementation. The panel recommends 

the use of tablet technology as an important new technology for collection 

of expenditure data, and there are numerous aspects of its implementation that require evaluation. The panel also recommends the collection of 

fewer, less detailed, expenditure categories in two of the prototypes, which 

requires evaluation of how this structure can be used to compute the CPI 

and how to best collect these data. The panel also recommends research 

on several other promising areas that may lead to further improvements of 

the survey to reduce burden and help obtain better quality data, presented 

in a separate subsection

This is by no means a comprehensive list of research areas, but an 

identification of several areas that need additional research, related to 

implementation of the proposed designs.

Use of a tablet device. All three of the proposed designs recommend the use

of a tablet device. There are numerous potential benefits in using a tablet, 

yet they depend on how a device is selected and implemented. Even the 

overall advantage of a tablet over a paper instrument is an assertion that 

needs to be evaluated rather than taken for granted.

The highest priority research is an evaluation of the tablet technology. 

Criteria may include the utility, interface, robustness, data storage, transmission, and cost. Related to this is an evaluation of the optimum type 

of interface. The panel recommends one resembling the TurboTax model, 

which features separate modules that can be selected in any order and 

provides the respondent with an option to enter information directly into 

a form or to do so through a structured conversational guide. Other types 

of interfaces are possible, such as one that more closely aligns with a typical survey questionnaire or an interface that is more like an event history 

calendar. Conditional on a selected interface design, experimentation with 

different visual design elements that provide visually appealing and easy-tounderstand features will also be beneficial. Whatever the interface design, it 

needs to have a self-evident navigation, as in mobile apps.

Experimentation with the structure of the instrument will also be 

needed. For example, the instrument can be modularized by type of expenditure (e.g., food, clothing), it can have a linear structure (e.g., reporting all 
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180 MEASURING WHAT WE SPEND

expenditures for the day), or offer both options. Each approach has unique 

advantages and disadvantages, yet an understanding of any measurement 

differences is needed first.

Experimentation will be needed in determining the best way for the 

technology to provide help in key entry of items. Possibilities include 

drop-down menus, automated “completion” of a word being entered, and 

other options. Experimentation is needed to develop prompts to encourage 

forgotten expenditures.

In addition to designing an intuitive interface, a critical aspect of the 

design of the application is to maintain respondent engagement and to 

effectively motivate respondents to report all expenditures. For example, 

since the respondents are provided with the tablet device, it is possible to 

include games and utilities that improve user engagement. The interface 

itself can use features of “gamification”—applying psychological and attitudinal factors underlying successful games to motivational strategies to 

improve user engagement, such as virtual badges, points, and status levels. 

Experiments will be needed in order to achieve a design that attains a high 

level of respondent engagement, which can in turn help to collect more accurate and complete data.

The choice of a tablet device, the design of the interface, and the addition of any motivation features are all prerequisites for the successful 

implementation of a tablet device to collect expenditure data. Yet there are 

fundamental questions about the cost feasibility and ubiquitous use of the 

tablet technology that need to be addressed. First among these questions 

is what proportion of the households (consumer units, or CUs) will have 

the motivation and ability to use a tablet, once an intuitive interface has 

been constructed. The answer to this question does not necessarily affect 

the use of a tablet device, but it can inform the overall design and resource 

allocation.

Several direct comparisons to the use of a paper-and-pencil instrument 

will be needed to determine the desirability of using a tablet device. Such 

a comparison will also allow for a better understanding of measurement 

differences between the two modes, as a likely final design will involve the 

use of both modes by different sample members. Comparisons between the 

two modes will be needed for both cost and quality outcomes, as a trade-off 

is likely. Finally, much of the objective in the CE redesign lies in reduction 

of respondent burden; the tablet and the paper-and-pencil administration 

need to be compared in terms of respondent burden.

How people keep financial records. A fruitful line of research may be to 

gain a better understanding of how different people and households keep 

financial and expenditure data. This could inform the methods used to collect the expenditure data and the design of the tablet interface, as well as 
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PATHWAY TO AN IMPROVED SURVEY 181

identify different subgroups for which the methods need to be different. For 

example, some households may have electronic records of nearly all expenditures, such as on credit card and bank account statements; others may 

keep paper receipts for expenditures; a third group may use a combination 

of methods; and yet a fourth group may not maintain sufficient records in 

any form. Among those who keep electronic records, some may even use 

specialized software that serves as a single repository of expenditure data, 

such as tax-related software packages.

Within a household, some may rely on a single person to be responsible 

for all expenditure records, while other households divide this responsibility by the type of expenditure or by the person who made the expenditure. 

These examples are certainly an oversimplification of what is invariably 

a complex and multifaceted recordkeeping phenomenon, but studies are 

needed to improve understanding of how households and individuals within 

those households keep expenditure records today.

Collecting data on a reduced set of 96 expenditure categories. Much of

the burden in the CE surveys stems from the data requirements imposed on 

the surveys. It is imperative to conduct a study to investigate designs that 

minimize the number of questions and that reduce burden on respondents, 

in order to acquire accurate data. Both Design B and Design C require this 

research. The instrument can be reduced in a number of ways, but at a 

minimum, an evaluation is needed of the impact of collecting 96 categories 

of expenditures instead of the more detailed 211 expenditure categories 

now collected. A preliminary evaluation of the impact on the CPI, for example, can be conducted using extant data.

Use of incentives. The U.S. population has become more reluctant to 

participate in surveys (e.g., Groves and Couper, 1998; Stussman, 

Dahlhamer, and Simile, 2005), and incentives can help mitigate the effect 

on nonresponse. Key, however, is how incentives are incorporated into the 

survey design, if they are included. The panel did not venture to recommend 

a particular design, as this choice can only be informed through experimentation. Aspects that may warrant experimental manipulation include 

the structure (e.g., prepaid versus promised, household versus individual), 

timing (e.g., prior, during, or after completion of the supported journal), 

form (e.g., cash, and if cash, whether it is electronic transfer), criteria for 

payment (e.g., a certain level of supported journal completeness), amounts, 

and potential use of differential incentives (e.g., lower compliance groups, 

based on burden such as from the number of people in the household). 

More detail on this topic is covered earlier in this chapter under “Guidelines 

for the Use of Incentives.”
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182 MEASURING WHAT WE SPEND

Instrument development. A substantial amount of research will be needed

on the instrument development. For example, experiments are needed to 

(1) investigate the optimum period to ask households to keep a supported 

journal, (2) evaluate measurement error, nonresponse rates, and error, 

and (3) evaluate the stability of the estimates. Other important areas for 

study, especially pertinent to the proposed designs, are the optimum recall 

period for different types of expenditures and the optimum time between 

interviews.

All the proposed designs include a shift to greater reliance on selfreports, yet still involve interviewer administration to some degree. Thus, it 

would be beneficial to experiment with interviewer- and self-administration 

of different types of questions.

Privacy versus open access. Each household member can input his or 

her own expenses, but there is a design choice in whether to allow each 

respondent to see the expenditures from others in the household. The 

panel is recommending allowing all household members to view recorded 

expenditures of the household. Certainly, allowing such transparency in 

expenditures within the household can limit duplication of expenses, but 

raises a number of potential issues, ranging from potential problems related 

to unwanted disclosure of expenditures to other members of the household 

to intentional underreporting of expenditures due to the lack of privacy. Research is needed to compare providing household members with complete 

privacy (e.g., individual login for each member and no information sharing 

between accounts) versus being able to see and assess the completeness of 

total household expenditures.

Potential impact from reducing proxy reporting of expenditures. The 

use of proxy reporting invariably involves error trade-offs, which need to 

be evaluated. Understanding whether the additional measurement error 

overwhelms the reduction in nonresponse error compared to not using 

proxy reporting can inform the use or avoidance of proxy reporting in 

the redesigned survey. Schaeffer (2010) provided useful guidance to BLS 

for evaluating the use of proxy reporting, including separate comparisons 

by topic, reference period, and relationship to the sample member and the 

proxy respondent. As Mathiowetz (2010) pointed out, validation studies of 

the accuracy in reporting based on self versus proxy reports for objective 

measures are virtually nonexistent; further research on the CE is needed. A 

further complication in the direct comparison is cost; proxy reporting will 

likely reduce the data collection costs and will also need to be evaluated 

against the likely higher measurement error in the proxy reports. However, 

the designs proposed by the panel encourage multiple responders within the 

household with a minimum of additional cost.
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Experiments with imputation methods and other statistical approaches. An 

important recommendation that is also reflected in all three alternative designs, and especially Design C, is a greater integration of statistical methods 

into the survey design. The designs vary along this dimension with increasing reliance on statistical methods, with two designs using subsamples with 

more intensive methods to calibrate the rest of the collected data to reduce 

measurement error and provide accurate estimates for detailed types of expenditures. At least two lines of research are needed to inform the proposed 

designs. All designs involve the collection of data for a small number of the 

weeks in a year. Weighting or imputation methods will be needed to garner 

annual expenditure estimates at the household level. Finally, whichever data 

need is addressed, different statistical methods will need to be evaluated.

Evaluation of the effectiveness of using more intensive methods. The 

proposed designs suggest the use of more intensive methods to improve the 

accuracy of the data collected on all sample members, or the use of more 

intensive methods on a subsample in statistical adjustments for measurement error. Whether such approaches are warranted and how they are 

implemented depend on the effectiveness of the more intensive methods 

to obtain more accurate data. The effectiveness of these methods, in turn, 

depends on what they entail. Therefore, experimentation is needed with 

different designs.

Additional Research

Although not necessitated by any of the proposed designs, several 

avenues for additional research can prove beneficial to the CE redesign, 

particularly in the long run.

Experiment with other technologies to record and extract data. Many 

technologies can be used to help record or extract available data on expenditures, such as scanners (including bar code scanners and receipt scanners), 

handheld devices and smart phones with cameras, and software that can 

facilitate importing of statements. These technologies are rapidly evolving 

and, therefore, involve the risk of being outdated in terms of hardware and 

software. Furthermore, the way expenditure data are stored is also changing, and a challenge for any of these technologies is to be relevant for the 

foreseeable future. Cautious investigation of technologies is recommended, 

but no single technology is likely to replace the collection of survey data.

Split questionnaire design. An area in which BLS has devoted considerable attention is the potential use of split questionnaire design—a form of 

matrix sampling of survey questions in which several distinct forms of the 
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184 MEASURING WHAT WE SPEND

survey are constructed (thus modules are sampled, rather than questions) 

and respondents randomly (although not necessarily with equal probability) 

assigned to one survey form.

Evaluate the utility and the ability to obtain data from additional sources.

Attempts can be made to retrieve expenditure data either from other sources 

or directly from records that the respondents have retained. These may include credit card/bank account statements, utility statements, pay stubs, 

and tax records. Some guidance may be obtained from other surveys such 

as the Residential Energy Consumption Survey (RECS) in how to obtain 

permission to access these records. Most of this evaluation, however, may 

need to be tailored to the CE.

Augment sample with wealthy households. The wealthiest households tend

to be nonrespondents at a higher rate, causing substantial problems for 

some uses of the CE data. A potential remedy is to augment the CE with 

additional samples of wealthy households, such as based on IRS records or 

income data linked to small geographic areas. BLS has possibilities to link 

the CE sample of households to existing administrative data sources, such 

as IRS records, that can provide some better information about nonrespondents. Design C has a base survey that would easily facilitate the selection 

of additional higher income households in its follow-on components.

Identify and evaluate sources of auxiliary data (e.g., retailer data). Replacement of some CE data with data from other sources, such as retailer 

data or data from other surveys such as the RECS, is a risky expectation, 

but certain survey or diary data elements may be replaced or augmented using other sources of data. More likely uses of auxiliary data, due to the different error properties and reasons for their collection, are as benchmarks 

that can help evaluate the CE estimates and changes in the CE estimates, 

and to aid in sampling, post-survey adjustments, and estimation. One example would be to leverage auxiliary data (such as income) obtainable on 

sampled households from the Census Bureau to estimate nonresponse bias 

and improve nonresponse adjustments. A broad range of auxiliary data 

can be considered, such as IRS data, for a multitude of uses. Permission 

may be needed from a household to access these data, and research could 

explore “opt-out” permission (rather than “opt-in”) for the CE surveys, 

which would allow access to a household’s data unless they receive a “no 

access” notification. Research by Pascale (2011) and Singer, Bates, and 

Hoewyk (2011) on the use of administrative records in other contexts provides useful background for conducting such research. Furthermore, these 

data sources change over time, and investigation of such sources needs to 

be ongoing rather than at one point in time.
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Research Specific to a Single Prototype

These topics were listed earlier in the chapter under the descriptions of 

the panel’s three prototypes, but are repeated here so that research needs 

are together in one place in this report.

Design A—Detailed Expenditures Through Self Administration:

•	 Develop models that would estimate quarterly and annual expenditures and income at the household level from the four weeks of 

reported detailed data plus the data reported on larger and routine 

expenditures.

Design B—A Comprehensive Picture of Expenditures and Income:

•	 Investigate the assumption that a “bounding” interview is unnecessary to avoid telescoping and other issues.

•	 Investigate the accuracy and completeness of aggregated expenditures for periods up to six months and for estimates of averages 

(i.e., average monthly spending for gasoline) used in this prototype 

to construct a full set of microdata for the entire six-month period.

•	 Develop appropriate models to “disaggregate” aggregated expenses

using data from the one-week supported journal.

•	 Develop methodology for a successful component that will use an

intensive interview and process based on prior collation of records 

and financial software to achieve a budget balance for the year at 

the household level as described below. Extend existing research 

done by Fricker, Kopp, and To (2011) to fully evaluate its potential 

and limitations.

Design C—Dividing Tasks Among Multiple Integrated Samples:

•	 Research and develop models for estimation using the base survey

and two waves of data collection.

•	 Research and develop models for imputing at the household level

“smaller expense items” collected on the detailed expenditure 

component and not on the household profile component into the 

household-level dataset to complete the overall household expense 

profile.

Recommendation 6-11: BLS should engage in a program of targeted 

research on the topics listed in this report that will inform the specific 

redesign of the CE.
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186 MEASURING WHAT WE SPEND

The redesign of the CE is not a static operation, and the panel anticipates a long-term need for BLS to continue to propose, test, and evaluate 

new data collection methods and technologies. Thus the panel recommends 

that BLS maintain a methods panel to allow such testing into the future.

Recommendation 6-12: BLS should fund a “methods panel” (a sample 

of at least 500 households) as part of the CE base, which can be used 

for continued testing of methods and technologies. Thus the CE would 

never again be in the position of maintaining a static design with evidence of decreasing quality for 40 years.

SUMMARY

The current CE design has been in place since the late 1970s, and 

change is needed. The uses of the CE have grown over that time, and the 

current program tries to meet the needs of many users. The result is that 

the current surveys create an undesirable level of burden, and the data suffer from a number of quality issues. The panel believes that change should 

begin with BLS prioritizing the breadth and detail of data currently supporting the many uses of the CE so that a new design can most efficiently 

and effectively target those priorities.

The panel offers three prototype designs, each of which meets the basic 

requirements presented in Consumer Expenditure Survey (CE) Data Requirements (Henderson et al., 2011). A given prototype may be a better fit 

than others, depending on the revised objectives of the CE. The prototypes 

have considerable comparability as well. They all are designed to promote 

an increased use of records. They all incorporate self-administration (supported from the field representative, a tablet computer, and a centralized 

support facility) as a mode of data collection. They all use incentives to 

motivate respondents.

This report provides guidance to BLS in the next steps toward redesign. It recommends that BLS produce a roadmap for redesign within six 

months. The report provides guidance on how to incorporate new technology, particularly the tablet computer. The redesigned CE will still be a 

difficult survey for respondents, and the panel recommends developing an 

effective program of incentives to enhance motivation. It provides guidance 

in doing so.

The panel understands that a redesign of the CE will require significant 

targeted research to develop specific procedures that are workable and most 

effective. The report provides an outline of the research that is needed and 

the panel’s suggestions on the priority of those research endeavors. The 

panel recommends that BLS enhance the size and capability of its in-house 

research program in order to carry out the targeted research but also to 
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PATHWAY TO AN IMPROVED SURVEY 187

meet additional challenges in future years. Finally, the panel recommends 

that BLS reach out to other organizations for assistance in implementing 

the tablet-based data collection system and the apps that will make it work 

smoothly.

The panel has great confidence that BLS, with its dedicated and knowledgeable staff, will be able to move forward successfully toward a new CE. 

We trust that this report has helped in that process. It has been a challenging opportunity to consider these issues and make recommendations.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

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Measuring What We Spend: Toward a New Consumer Expenditure Survey

Appendix A

Dissent and Panel Response

This dissent is intended to clarify some of the concerns of three of the 

panel’s economist members. Enormous effort went into this panel 

report and is reflected in its many good elements, which we wholeheartedly endorse. For example, the report describes several prototypical 

surveys. Exploring these survey types to their limit is the right approach to 

determine the best form for a new survey, although we are concerned about 

the extent to which resources will be available to BLS to pursue this course.

Despite the efforts that went into the report, some important issues did 

not get the attention that we think they deserve. This result is not surprising given the short time frame and a mission for the panel that included 

convening a data producers’ workshop and commissioning and examining 

two prototype surveys from contractors, and a set of requirements that 

is challenging indeed (Casey, 2010; Henderson et al., 2011). In addition, 

some important information only became available to the panel late in the 

process. The purpose of this dissent is to highlight several issues and to 

stress information that the panel as a whole did not have the time to fully 

discuss. In particular:

•	 The report emphasizes a greater role for diary-style data collection,

which we fear will lead to lower quality data. This emphasis is 

supported by a statement in the report that the quality of existing 

interview and diary survey data cannot be compared and other 

statements that are equivocal about their relative merits. This statement is inconsistent with recently estimated measures of bias and 

precision, two standard indicators of data quality that generally 

201
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202 MEASURING WHAT WE SPEND

show the existing interview data to be of higher quality than the 

existing diary data.

 In 2010, six of the eight largest categories of expenditures available in both the Interview and Diary surveys show greater underreporting in the Diary survey (two other large categories of 

expenditures are not collected in the Diary survey). The weighted 

average of Diary totals to national income account totals for categories that line up with the national accounts is 17 percentage 

points lower than the ratio for the Interview survey, though this 

partly reflects the different coverage of the two surveys.

 For the 37 categories that can be compared in the Interview and

Diary, the weighted average of the coefficient of variation is 58 

percent higher in the Diary, with 33 of the 37 categories subject 

to greater variation even after accounting for differences in sample 

size (Bee, Meyer, and Sullivan, 2012). The higher variability of 

responses from the Diary survey mean that 2.5 diary responses are 

needed to equal the precision of one interview response, an issue 

that is not reflected in any of the cost accounting in the report.

 Response rate differences between the surveys and the frequency of

reports of no expenditures are also consistent with higher Interview 

survey data quality. The recent experience of Canada is instructive: a switch from interview to diary led to 9–14 percent more 

under-reporting on average (Dubreuil et al., 2011). This evidence 

is mentioned in the report, but is not deemed to have important 

implications for a redesign. Additional evidence of problems with 

diary surveys can be found in Crossley and Winter (2012). While 

these findings refer to existing surveys, they raise important concerns about the collection of expenditure data that relies heavily 

on diary methods.

 The suggested redesigns, of course, aim to improve upon existing

methods, although there is not a great deal of evidence to support 

that the effects will be dramatic. For example, monetary incentives 

for respondents are emphasized, but the evidence on such incentives from randomized trials suggests small effects that are even 

smaller for high-income households (e.g., Clark and Mack, 2009). 

The differential effects by income are particularly important since 

one of the most significant problems with the CE is lower response 

and under-reporting among high-income households (Sabelhaus 

et al., 2012).
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX A 203

•	 We believe that the discussion of the prototypes in the report

should highlight the difficulty of using modeled data, data with 

incongruent time periods, and short panels. The charge from the 

BLS included the following requirement: “The CE considers the 

ability to support micro-level analyses over a 12-month period to 

be a requirement, with data collected at more than one point in 

time.” The report correctly advises the BLS that setting priorities 

is an important task, but we believe that the implications of the 

report’s recommendations for this requirement are not adequately 

addressed.

 Modeling of microdata to construct data at the household level

is problematic at best, especially since one of the purposes of the 

household data is to facilitate the design and estimation of behavioral models. While both statistical and economic theory provide 

a guide for modeling, even careful and well-intentioned methods 

may yield results with dramatically misleading policy implications 

such as the gross overstatement of the economic returns to obtaining a Graduate Equivalence Degree (GED) when using imputed 

observations in the Current Population Survey (CPS) (Bollinger 

and Hirsch, 2006). Along with different reporting periods for different goods, the lack of an annual record at the household level 

will prevent obtaining a complete picture of household spending.

 A panel that lasts only a few weeks or months is too short for most

changes in expenditures to occur. Even when expenditure changes 

do occur, the relatively higher dispersion due to collecting data 

over shorter intervals (e.g., two weeks) at each point in the panel 

may result in the dispersion of the change in expenditure being 

too unwieldy to be of use for standard panel data analysis. We 

feel that the discussion of prototypes should have emphasized the 

implications of the different designs for construction of datasets at 

the household level since, in our view, some of the designs will not 

produce usable data.

•	 More emphasis could have been given to the need to develop ways

to monitor the quality of the data. Given that concerns about data 

quality are motivating the redesign, having a way to better monitor 

and hopefully improve data quality is vital. For instance, the ability 

to link to outside sources would be enhanced by a change in language in the introductory letter to respondents getting preapproval 

for such links such as is currently used in the American Community Survey (ACS), Survey of Income and Program Participation 
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204 MEASURING WHAT WE SPEND

(SIPP), and the CPS. These links could be used to compare survey 

responses to administrative or other data. A second approach—the 

development of an intensive “gold standard” survey that could be 

linked to a subset of the sample—is developed in one of the prototypes. A third approach is using internal data check, such as comparisons of spending to income that would be enhanced by having 

spending and income for the same time period and emphasizing 

budget balance. Research done with the data is also an important 

check on the extent to which the data have sensible patterns. Some 

of these issues are mentioned in the report, but we believe the goals 

and methods of monitoring data quality merit recommendations by 

the panel.

•	 A redesigned CE could also be more informed by how survey

information affects the accuracy of the CPI. Information on what 

categories of expenditures and expenditures by which household 

members appear to be under-reported could be reflected more in 

the designs. Ideally, the designs would reflect which categories of 

expenditures for which extra detail in spending would be especially 

helpful in reducing bias in the CPI and which other categories 

have price changes sufficiently correlated across different goods 

to indicate that current detail is more than is needed. If the structure of the CPI as a plutocratic price index is going to continue, 

then under-reporting by high-income households needs to be better 

addressed.

•	 Finally, the report would benefit from further exploration of economic census data and other outside sources of data to obtain 

detailed expenditures. Some of these sources employ crosschecks 

that validate the data and make it more likely to be close to the 

truth. These sources would be especially useful for the calculation 

of CPI weights and aggregate expenditure tables.

We reiterate that these comments are not meant to criticize the work 

of the panel, but to emphasize that it is unfinished. The CE survey is an 

important statistical program, and all of the panel members have their own 

views on what the priorities of the survey should be and how best to address these priorities. The diversity in views on this panel has been one of 

its greatest strengths.

Robert Gillingham

Bruce D. Meyer

Melvin Stephens
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX A 205

REFERENCES

Bee, A., B.D. Meyer, and J.X. Sullivan. 2012. The Validity of Consumption Data: Are the 

Consumer Expenditure Interview and Diary Surveys Informative? NBER Working Paper 

No. 18308. Cambridge, MA: National Bureau of Economic Research. Available: http://

www.nber.org/papers/w18308.pdf.

Bollinger, C.R., and B.T. Hirsch. 2006. Match bias from earnings imputation in the Current Population Survey: The case of imperfect matching. Journal of Labor Economics

24(3):483–519.

Casey, W. 2010. CPI Requirements of CE. Available: http://www.bls.gov/cex/ovrvwcpi

requirement.pdf.

Clark, S.M., and S.P. Mack. 2009. SIPP 2008 Incentive Analysis. Washington, DC: U.S. Census Bureau, Demographic Statistical Methods Division.

Crossley, T.F., and J.K. Winter. 2012. Asking Households about Expenditures: What Have 

We Learned? Paper prepared for the Conference on Improving the Measurement of 

Consumer Expenditures sponsored by Conference on Research in Income and Wealth 

and the National Bureau of Economic Research. Available: http://www.nber.org/chapters/

c12666.pdf?new_window=1.

Dubreuil, G., J. Tremblay, J. Lynch, and M. Lemire. 2011. Redesign of the Canadian Survey 

of Household Spending. Presentation at the Household Survey Producers Workshop, 

June 1–2, Committee on National Statistics, National Research Council, Washington, 

DC. Available: http://www.bls.gov/cex/hhsrvywrkshp_dubreuil.pdf.

Henderson, S., B. Passero, J. Rogers, J. Ryan, and A. Safir. 2011. Consumer Expenditure 

Survey (CE) Data Requirements. Bureau of Labor Statistics, U.S. Department of Labor. 

Available: http://www.bls.gov/cex/cedatarequirements.pdf.

Sabelhaus, J., D. Johnson, S. Ash, D. Swanson, T. Garner, J. Greenlees, and S. Henderson. 

2012. Is the Consumer Expenditure Survey Representative by Income. Paper prepared for 

the Conference on Improving the Measurement of Consumer Expenditures, sponsored by 

the Conference on Research in Income and Wealth and the National Bureau of Economic 

Research, Washington, DC, December. Available: http://www.federalreserve.gov/pubs/

feds/2012/201236/201236pap.pdf.

PANEL’S RESPONSE TO DISSENT

The uses of the Consumer Expenditure Surveys (CE) are complex and 

diverse. Our panel reflected that diversity and complexity. The members 

came together from different academic disciplines and collectively provided 

high levels of expertise in economic analysis, survey measurement, data 

collection, sample design, and technology. All of these skills were critical 

to the panel’s work, and each area of expertise reflected insight, ideas, and 

opinions important to designing high-quality consumer expenditure surveys 

and to preparing a consensus report.

During panel discussions, three members continually emphasized the 

importance of the CE for economic analysis based on longitudinal microdata. Their ideas are important and, indeed, are part of the whole that is 

the panel’s report. These members contributed substantially to both the 

substance of the report and to the balance and tone in which ideas have 

been laid out. The report is better because of the juxtaposition of their in-
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206 MEASURING WHAT WE SPEND

sights and ideas with those of other panel members, and we sincerely thank 

them for their efforts on this report. We regret that they have now decided 

to emphasize their personal perspective through a dissent.

A prominent theme of the dissent is the relative quality of the current 

CE Interview survey in comparison with the Diary survey. The two surveys 

were designed differently in order for each to collect certain types of expenditures. The panel demonstrates in this report that both surveys suffer 

from substantial data quality issues. BLS currently uses results from both 

surveys, publishing estimates from one or the other of them after considering the overall quality for each individual expense item.

The majority of the panel thinks that the three dissenting members, by 

implying that diary-style data collection invariably produces lower-quality 

data than recall-style data collection, have reached a premature conclusion. The majority concluded that it is neither possible nor necessary to 

assess which of these two current surveys would be “better” for collecting 

all types of expenditures. Instead, the panel kept its focus on how to use a 

combination of improved modes, along with newer collection technology, 

external data, and respondent incentives, to create a more effective CE 

survey in the future. We believe the report has done that well. It provides 

several design options, including a supported journal using a tablet computer that is distinctly different from the current Diary survey. Each option 

has a different mix of interview-like and supported journal components, all 

of which should receive serious consideration and evaluation.

Some of the other issues in the dissent—modeling, the length of reference periods for data collection, and linking to administrative data for a 

richer dataset—relate directly to the dissenters’ focus on creating the most 

useable microdata for analysis. Each of these issues is discussed in the 

report, both in a broad context and in relationship to creating microdata.

The report proposes a number of ideas to improve the understanding 

of expenditure data and their quality, including the evaluation of intensive 

methods to reconcile household income and expenditures, the use of extant 

administrative data for quality assessment, research on how households 

keep financial records, and the possibility to augment the sample through 

more intensive interviews with a subsample of wealthier households. All are 

discussed in some depth in the report.

The need for an incentive program is thoroughly developed in the 

panel’s report. Several panel members have considerable personal experience in using and evaluating incentive programs. Knowledge of the extensive scientific literature led to our recommendation that fairly substantial 

incentives be used in order to affect response behavior. The report has also 

thoroughly developed issues related to the use of outside sources of data 

to obtain detailed expenditures. The panel encourages BLS to continue to 
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX A 207

research and evaluate these options, but we concluded that none of them 

is currently a feasible alternative given the associated risks and costs. Far 

from being incomplete, we believe our report, with its broad discussions, 

will be an important tool for the administrators and policy makers who are 

responsible for determining the next steps for the CE.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

Appendix B

BLS Communication of Issues

ADDITIONAL COMMUNICATION TO PANEL VIA E-MAIL 

FROM KATHY DOWNEY ON NOVEMBER 11, 2011

This is to followup on our conference call this afternoon. As Adam 

and I stated, Mike Horrigan (OPLC associate commissioner), Jay Ryan (CE 

division chief), and John Layng (CPI division chief) were concerned about 

comments overheard at the 10/27 CNSTAT meeting regarding the difficulty 

in designing a survey that meets all of the CPI requirements. After some 

discussion, the program managers decided that the CE data requirements 

document is sufficient.

Therefore, contrary to previous direction to the panel that both the CPI 

Requirements of the CE (William Casey, June 17, 2010) and the CE Data 

Requirements (Henderson, Passero, Rogers, Ryan, Safir, May 24, 2011) collectively form the requirements for the survey, the program managers ask 

that the panel members treat the CE Data Requirements as the mandatory 

requirements for the survey. The CPI data requirements document is still 

helpful in terms of providing larger context for data usage, but these are 

not requirements that the panel’s recommendations needs to meet. We hope 

that this relaxation of constraints provides the panel with greater flexibility 

in considering their recommended design changes.

208
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX B 209

COMMUNICATION OF ISSUES PRESENTED BY

MICHAEL HORRIGAN

BLS CHARGE TO THE CNSTAT PANEL

CE PROGRAM STAFF

FEBRUARY 3, 2011

1. CE mission statement:

a. The mission of the Consumer Expenditure Survey program (CE)

is to collect, produce, and disseminate information that presents 

a statistical picture of consumer spending for the Consumer Price 

Index, government agencies, and private data users. The mission 

encompasses analyzing CE data to produce socio-economic studies 

of consumer spending and providing CE data users with assistance, 

education, and tools for working with the data. CE supports the 

mission of the Bureau of Labor Statistics, and therefore CE data 

must be of consistently high statistical quality, relevant, and timely, 

and it must protect respondent confidentiality.

2. The technical aspects of CNSTAT’s task from the Summary Statement 

of Work in the proposal are as follows:

a. The National Research Council, through its Committee on National Statistics, will convene an Expert Panel to contribute to the 

planned redesign of the Consumer Expenditure (CE) Surveys by the 

U.S. Bureau of Labor Statistics (BLS).

b. The Panel will review the output of a data users’ needs forum and 

a methods workshop, both convened by BLS.

c. The Panel will conduct a household survey data producer workshop to ascertain the experience of leading survey organizations in 

dealing with the types of challenges faced by the CE surveys.

d. The Panel will conduct a workshop on redesign options for the CE 

surveys.

e. The redesign options workshop will be based on papers on design 

options the Panel commissions from one or more organizations.

f. Based on the workshops and its deliberations, the Panel will produce a consensus report at the conclusion of a 24-month study with 

findings and recommendations for BLS to consider in determining 

the characteristics of the redesigned CE surveys.

3. What CE expects from the report:

a. The report should synthesize information gathered through the

BLS data users’ needs forum, BLS methods workshop, CNSTAT 

household survey data producer workshop, CNSTAT CE redesign 
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

210 MEASURING WHAT WE SPEND

options workshop, and independent papers into multiple comprehensive design recommendations.

 i. The design recommendations should include a menu of comprehensive design options with the highest potential, not one 

specific all-or-nothing design.

 ii. The design recommendations should be flexible to allow for

variation in program budget, staffing resources and skills, ability of the data collection contractors to implement, legal agreements to be obtained (e.g., access to other data sources), etc.

b. The report will include recommendations about future research

that needs to be done, but that is not the focus. As much as possible, the focus should be on concrete design proposals that could 

be implemented.

c. It should focus on a comprehensive design, and include an approximate timeline for development, pilot testing, and implementation. 

This timeline should not exceed 5 years for development and pilot 

testing, and a new survey in the field within 10 years.

d. In the recommendation, the Panel should focus special attention on

addressing issues with the current CE surveys:

 i. Underreporting of expenditures

 ii. Fundamental changes in the social environment for collection

of survey data

 iii. Fundamental changes in the retail environment (e.g., online

spending, automatic payments)

 iv. The potential availability of large amounts of expenditure data

from a relatively small number of intermediaries such as credit 

card companies

 v. Declining response rates at the unit, wave and item levels

e. The Panel should develop a carefully balanced evaluation of the

prospective benefits, costs, and risks of their proposed design recommendations compared to the current CE surveys. The evaluation 

should include a consideration of the following factors:

 i. The evaluation be based on extensive and carefully balanced

evaluation of literature and industry knowledge on methodology and practice that is currently available or likely to be 

available in practical form in the next five years;

 ii. Data collection technologies currently available or likely to be

available in practical form with the next five years;

 iii. Administrative record and external data sources and technologies currently available or likely to be available in practical 

form with the next five years; and

 iv. The evaluation should be reflective of the tradeoff between cost

and improvement on measurement error.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX B 211

4. “Yes, there are two paths you can go by, but in the long run there’s still 

time to change the road you’re on.” (Jimmy Page and Robert Plant, 

Stairway to Heaven)

a. CE is pursuing two roads to the redesign:

 i. a redesign from scratch, and

 ii. changes within the current design

b. The focus of the Panel should be on the redesign from scratch

(4.a.i). In doing so, BLS would like the Panel to keep the following 

considerations in mind:

 i. The Panel should be aware of the research that CE is undertaking to improve the current design.

 ii. In considering a new design options, CE is particularly interested in approaches that focus on proactive approaches to 

gathering expenditure data—whether they be from records, 

receipts, etc. or by providing respondents the ability to easily 

record purchases in real time. While retrieval of data from 

memory in a standard reactive interview is appropriate for a 

number of data elements, CE views a proactive data collection 

methodology for expenditure data as a high priority.

c. As mentioned, CE is currently researching or is planning to research

a number of ideas for improving the current design, including a 

Web diary, individual diaries, streamlining the Interview survey, 

reducing the length of the bounding interview, double placement 

of diaries, reconciliation of expenditures and income/assets, etc. 

(4.a.ii).

5. Constraints:

a. Maintain same budget.

b. Maintain value of the survey to taxpayers and data users.

6. What we know:

a. CE needs to support CPI needs.

b. CE needs to support other data users as much as possible as long

as the design to meet those needs meets the core CE mission.

c. What makes CE unique is the complete picture of spending, in all

categories, at the household level, with household income, assets, 

and demographics.

7. What we don’t know:

a. The final level of expenditure detail needed to support CPI’s needs 

after redesign.

 i. CE has a very detailed set of current technical requirements

from CPI (http://www.bls.gov/cex/duf2010casey2.pdf).
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

212 MEASURING WHAT WE SPEND

 ii. In cases where CE does not provide enough detail to meet CPI’s 

needs, CPI adopts alternative approaches.

 1. For example, there are cases where the level of detail in

the CE is not sufficient for CPI, such as for gasoline, food 

away from home, and medical care procedures.

 2. Also, there are cases where the CE sample size is not sufficient for CPI’s purposes such as in calculating Entry Level 

Index selection probabilities at the PSU level or calculating 

base period weights using annual calendar periods.

 iii. CE is currently looking anew at its own data requirements and

in that process will attempt to clearly state where it can and 

cannot meet CPI’s needs in terms of CPI’s current detailed technical requirements. A report will be completed by the end of 

April, in advance of the award of the contract for the redesign 

option RFP.

 iv. As the redesign process develops it is critical that ongoing dialog be maintained between CE and CPI in terms of how the 

redesign options would affect/change the CPI’s current detailed 

technical requirements.

 v. In particular, CPI will need to make assessments as to the 

efficacy of the inputs received from CE, along with possible 

alternative approaches, to meet its technical requirements.

 vi. BLS views this dialog as an iterative process that must accompany the evaluation of redesign options.

b. What importance should we place on possible future CPI information needs that could be provided by a redesigned CE?

 i. Rob Cage’s presentation, along with the document in 7.a.i 

above, will outline some possible future CPI information needs 

that could be provided possibly by a redesigned CE.

 ii. Please note: These possible future CPI information needs are

not requirements of the redesigned CE. CE views these future 

information needs as ones to be evaluated in terms of the following prioritized goals:

 1. Does the redesign meet the data needs of CE?

 2. Does the redesign meet the current requirements of CPI, an

assessment of which includes an evaluation by CPI of the 

efficacy of alternative approaches in the cases where the 

redesigned CE does not meet its current technical detailed 

requirements?

 3. Within the framework of the redesigned CE, is there sufficient flexibility, especially with respect to time and cognitive burden, to collect additional data from respondents 

that could meet possible future information needs of CPI?
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX B 213

c. Possible administrative data sources that could be used to replace

some of the data CE collects, or could be used to model data.

d. All of the feasible technological solutions for data collection.

e. Data users’ reaction to collecting less than the complete picture

of spending and using more imputed/modeled data to create that 

missing data.

 i. That is, would they find it acceptable to collect fewer data,

either as part of a multiple matrix design, or because there are 

some expenses we won’t collect, either because they are too 

hard to collect (like tolls on trips) or because they are such a 

small percentage of total spending (like reading materials)?

 ii. Whether an approach to impute/model for a much larger

amount of missing data is feasible depends on the reaction of 

data users and issues related to staffing and implementing a 

much larger statistical modeling system into production.

 iii. Would a split sample and data collection design be feasible—

one that is based on a smaller sample for which all expenditures are collected and a larger sample that takes advantage of 

matrix sampling and greatly reduces the burden of any given 

interview.

8. Consensus on the design so far:

a. CE needs to publish a complete picture of spending, but we do not

need to collect all of those data directly from respondents.

b. To reduce burden and improve data quality, CE is interested in 

moving away from a retrospective recall-based design to one that 

is more proactive.

 i. The current Interview design calls for collecting almost all

categories of spending from all households (the Diary is used 

to collect some small frequently purchased items, food, and 

clothing). For the most part, this collection is done through a 

three-month recall.

 ii. The proposed design should not be based on a retrospective

recall survey, but instead should focus on features that are 

proactive in collecting information from respondents or other 

sources. These design elements would be fundamentally different from those of the current CE surveys, and potentially 

include innovative features such as the use of mobile devices 

(e.g., smart phones, PDAs, tablets), financial software, electronic purchase records, receipt scanning, and auxiliary data.

 iii. Retrospective recall may be incorporated into the proposed

design as a method of “filling in gaps” or collecting information not otherwise provided.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

214 MEASURING WHAT WE SPEND

c. The constraint of maintaining the current budget needs to be considered, particularly since moving data capture from a respondent 

recall–based approach to one involving greater use of technology 

and data extraction from receipts, scanners, and administrative 

sources has the potential to increase collection costs.

d. The CE program produces two main data products: published

tables and microdata files. The current design is based on the idea 

that two surveys are needed to get a complete picture of spending—

the Interview for large or regular purchases and the Diary for small 

or difficult-to-recall items. In the CE production process, data from 

the Interview and Diary are integrated at an aggregate level for 

publication tables; they are not integrated for the microdata files. 

(It may be possible to create synthetic households from the two 

surveys at the micro-level, but the CE program has not attempted 

this due to the difficulty of the project, limited resources, and the 

fact that historically the microdata were viewed as secondary to 

the publications.) This presents a problem for microdata users 

and means that usually they will use data from one survey or the 

other, but not both. With the possibility that a redesigned CE may 

capture data from many sources (e.g., scanners, receipts, diaries, 

recall interviews, administrative sources, etc.) this problem may 

be exacerbated. It is important that the CE program continue to 

make available quality microdata files to the public. These data files 

may include synthetic data that account for missing data in order 

to give a complete picture of spending at the household level. The 

redesigned CE must allow for a straightforward integration of the 

various data sources into one complete picture of spending at the 

microdata level. (Note: this is a new requirement which is not met 

by the current design/processing system.) As with any work that 

involves imputation and synthetic data, practical implementation 

of this approach will require a complex balance of multiple factors, including (a) implicit or explicit modeling assumptions; (b) 

the extent to which those assumptions are consistent with the data 

for specific subpopulations and expenditure types; (c) bias and 

variance effects arising from (a) and (b); (d) costs and complexity 

for the statistical agency; and (e) costs and complexity for the final 

data user.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

Appendix C

Uses of the CE in Administering Federal 

Programs: Debriefing of Program Staff

The Panel on Redesigning the BLS Consumer Expenditure Surveys was 

particularly interested in understanding the use of the CE in administering federal programs to ensure that a redesign would continue 

to meet those needs. The panel spoke directly with several staff economists 

whose agencies use the CE data in administering their programs. The 

purpose of these conversations was to better understand the agency’s use 

of the CE data, including which data were most important and how they 

were used. Officials were sent a letter requesting a telephone conversation.

A summary of discussions with staff at the Federal Reserve Board, Centers for Medicare & Medicaid Services of the U.S. Department of Health 

and Human Services, Economic Research Service of the U.S. Department of 

Agriculture, and Bureau of Economic Analysis appears below. These staff 

members spoke about their own experiences and use of the CE and were 

not providing an official response for their respective agencies.

Mary Kate Catlin, Economist, Centers for Medicare & Medicaid 

Services

Cathy A. Cowan, Economist, Office of the Actuary/National Health 

Statistics Group

Kenneth Hanson, Economist, Economic Research Service

Arnold Katz, Bureau of Economic Analysis

Geng Li, Economist, Federal Reserve Board

Marshall Reinsdorf, Bureau of Economic Analysis

215
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

216 MEASURING WHAT WE SPEND

Question 1: Do you need total expenditures for each household, as opposed 

to some expenditure categories collected from one set of households, and 

other categories collected from another set of households?

Federal Reserve: Dr. Li’s use of the data would be severely impacted by 

this suggestion. He needs the big picture, how expenditures are related 

to a balance sheet. He does not know how to most efficiently use the 

data in this scenario. However, if the CE kept all sections for all households, but did global questions for some sections and detailed questions 

for others, that might work.

Centers for Medicare & Medicaid Services: Primarily use the health 

care section as well as income, with possible use of taxes for analysis.

Economic Research Service: Collecting some sections from some 

households and other sections from other households would make Dr. 

Hanson a little nervous about being able to do analysis of household 

food expenditures in the context of expenditures on other categories 

of goods and services (complete demand system). This survey strategy could work if enough households have at least one question per 

category, and then go into detail for a subset of sections for different 

households. He urged trying to get a large enough sample of detailed 

questions by category so that the analyst can distinguish different types 

of households, perhaps by household size and income.

Bureau of Economic Analysis: BEA worries that such a plan would 

eliminate the possibility of looking at substitution effects. However, 

the problem of underreporting of certain kinds of expenditures is so 

severe that a strategy of asking each respondent about only a subset of 

expenditures should be considered. By having sets of overlapping modules in which different respondents report on different combinations 

of expenditure categories, researchers who are willing to make some 

assumptions should still be able to study substitution effects.

Question 2: Is the panel nature of the survey important, i.e., do you need 

to follow households quarterly or is an annual number workable? Related, 

would fewer collections per household work (e.g., three times per year or 

twice a year)?

Federal Reserve: The strong preference is for a panel-nature survey, 

and even a longer panel would be extremely useful for Dr. Li’s work. 

A modified design where the visits are every six months over two years 

(same number of collections) has some appeal for Dr. Li.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX C 217

Centers for Medicare & Medicaid Services: The panel nature is not 

important, as they deal with annual numbers.

Economic Research Service: Dr. Hanson’s work needs primarily an annual number. The quarterly aspect is not that important.

Bureau of Economic Analysis: Less frequent collection would end up 

with more boundary problems, mainly because respondents would have 

trouble recalling expenditures over a longer period. BEA uses quarterly 

data when they can get it, annual when they cannot.

Question 3: Do you need a complete financial profile for each household, 

e.g., income, assets, etc., in addition to expenditures?

Federal Reserve: Yes, in fact, Dr. Li and his colleagues are working with 

BLS to enhance the collection of assets and liabilities. This may mean 

a reduction in the number of questions on this, but also more accuracy 

and precision. Dr. Li believes that some of the questions currently being 

asked should be revised to match the state of household finance. He 

also needs income to get the complete picture.

Centers for Medicare & Medicaid Services: They do not need great financial details, but staff did express that assets are equally important to 

income because older people tend to have less income and more assets.

Economic Research Service: Asset data are not used, but better income 

data would be nice. For example, low-income households often spend 

more than their income, so something is missed (e.g., alimony, informal 

income).

Bureau of Economic Analysis: In the final survey for a household, it 

would be nice to have the complete picture. But the big need for BEA is 

for interest rates paid on big loans. Assets and liabilities would be nice.

Question 4: How detailed do you need expenses? Would global expenditures work, or if not, what level of detail do you need?

Federal Reserve: The need is more for high-level aggregate data rather 

than a lot of detail.

Centers for Medicare & Medicaid Services: Staff listed nine major services areas for which they need data. This is quite detailed, but not as 

detailed as this section gets, e.g., they don’t need data on Blue Cross 
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

218 MEASURING WHAT WE SPEND

Blue Shield (hospital stays, physicians, dentists, drugs, durables, health 

insurance, etc.).

Economic Research Service: How BLS summarizes the food data can 

be frustrating, and Dr. Hanson has particular concerns about the consistency of how food data are aggregated over time. He believes there 

is more detail in the diary than is being summarized, e.g., whole grains 

versus processed grains. He wants the nutritional aspects of the food 

to come through.

Bureau of Economic Analysis: For the most part, global expenditures 

would work, as long as they are accurate. For some modules, BEA 

would like detail in order to fill in data gaps from other sources. BEA 

needs to estimate a savings rate.

Question 5: Would other sources of data work for you if the CE data were 

not available?

Federal Reserve: The CE is unique and cannot be replaced. The PSID 

does not have the wealth of expenditure data and certainly not the 

frequency needed by this work.

Centers for Medicare & Medicaid Services: CMS uses MEPS, MCBS, 

and the Census Service Annual Survey.

Economic Research Service: Dr. Hanson mentioned the USDA National Household Food Acquisition and Purchase Survey (FOODAPS), 

conducted by Mathematica Policy Research. This survey gives good 

information, but it has only been funded for its current cycle, and in 

any best case may be a survey conducted once every five years. The 

annual nature of the CE is important to Dr. Hanson.

Bureau of Economic Analysis: BEA uses hundreds of sources of data. 

They use the CE to fill in data gaps. For example, a rental survey conducted by the Census was discontinued in 2001, and the BEA uses CE 

data to try to substitute for it. The need is, for example, for rent paid 

for single-family homes. They can get some indication of this from the 

CE microdata, but it’s not perfect.

Dr. Katz took great pains to explain the BEA’s use of many sources 

of data. He noted that the BEA is responsible for estimating macronational totals such as Gross Domestic Product. To do this, they take 

data from where they can get it.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX C 219

BEA uses CE data when the agency cannot get better data from other 

sources, in other words, to fill in the gaps.

BEA goes to more accurate sources of data when it can. Data on bigticket items are more accurate from the producers, e.g., car sales best 

come from the auto manufacturers. But for services, these data are 

more likely to come from household surveys. Often, a survey such as 

CE is the only source of these kinds of data.

Question 6: Do you have issues with data quality of the current collection 

methods?

Federal Reserve: For a new user of the data, it is very hard to understand the imputations and allocations. This needs to be better explained 

and illustrated. There are a number of issues with internal consistency 

in the units from quarter to quarter. Dr. Li cited the example of a 

39-year-old person who, because of an imputation in a subsequent 

quarter, is all of a sudden 49 years old. Dr. Li also believes that certain 

sections have more issues than others. For example, mortgage data have 

greater deficiencies. He would like internal consistency to be improved.

Centers for Medicare & Medicaid Services: Sample size is an issue since 

CMS produces state-level data and creates estimates for year-to-year 

changes. There are some level differences when compared to other data 

sources, but this did not seem to be a big concern.

Economic Research Service: As mentioned above, Dr. Hanson has concerns about the processing of the food data when BLS summarizes the 

data. He also mentioned a slide from his presentation at the 2010 Data 

Users Forum on the jumpiness of the year-to-year change in average 

food at home consumption; the jumpiness exceeds the variance.

Bureau of Economic Analysis: BEA is concerned when the data bounce 

around. They are concerned that this happens due to the change in 

panel composition every quarter, and not due to changes in consumer 

behavior. There are also large discrepancies between the breakdown of 

total expenditures derived from responses to the CE and expenditure 

patterns derived from sales reported by retailers and other businesses. 

BEA staff suspect that the main reason for these discrepancies is underreporting of expenditures by CE respondents. They believe that the 

sales data obtained from businesses are generally pretty accurate (but 

they do NOT provide as high a level of detail on the composition of 
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

220 MEASURING WHAT WE SPEND

consumer expenditures as the CE). They also are concerned about the 

representativeness of the CE sample; in particular, higher income households account for a substantial share of total spending but getting them 

to answer a complete CE survey is difficult. The once-a-year release of 

data is a problem; BEA would like it more timely. This point, about 

increased need for timeliness, was made several times.

Question 7: Do you use microdata or are aggregate data acceptable?

Federal Reserve: The use of the data is primarily at the household (micro) level, but Dr. Li also uses some tabular aggregations.

Centers for Medicare & Medicaid Services: CMS uses both aggregate 

summaries and microdata.

Economic Research Service: Both are used.

Bureau of Economic Analysis: BEA uses microdata only when they 

have to in order to build up their own aggregates. They want to stay 

at the aggregate level. BEA does very little modeling with the CE data. 

They try to use the microdata as little as possible, but sometimes they 

don’t get the cross tabulations they need, so they do some aggregations 

on their own from the microdata.

Question 8: Do you have any suggestions for improvement to the CE data 

collection?

Federal Reserve: The one strong suggestion is that when someone leaves 

the panel, Dr. Li would like to know why. Did the household move? 

Or is it a refusal?

Centers for Medicare & Medicaid Services: Timeliness is an issue. For 

example, they are working on 2010 estimates and the CE 2010 data 

won’t be available until October. They would also like more information on household composition, especially older and younger than 65 

years old.

Economic Research Service: Dr. Hanson believes that the diary has improved over the years, especially with recording food obtained through 

SNAP or other benefits. He believes that food-scanning technology is 

or would be a boon to the quality of the data, especially allowing nutritional content to be recorded alongside the price.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX C 221

Bureau of Economic Analysis: There is great need for faster turnaround. This is true not only for collected data, but in general, in 

keeping up with an innovative economy. It can take years to get a new 

item onto a questionnaire, such as consumer electronics items, and by 

the time it gets on the questionnaire, it is out-of-date.

Strategies should be developed to reduce underreporting of irregular 

or infrequent expenditures. Devices to help people remember, such as 

seeing whether the reported expenditures plus saving add up to aftertax income, should be considered. Also, respondent fatigue due to the 

length of the survey contributes to underreporting, so breaking the 

survey into overlapping modules and having a respondent just report 

on two or three of the modules should be considered.

BEA uses the Census Bureau Economic Censuses, but these are done 

every five years. In between these collections, they need data to fill in 

the gaps. For example, the mix of sales at retail establishments can 

change greatly over five years. BEA might try to use CE data to estimate 

these mix changes indirectly. Sometimes they are dealing with sevenyear-old data.

BEA identified several data gaps they feel that the CE could help with:

	 •Financial services; the specific services used and the fees pai

	 •Data on interest rates of consumer loans, including length 

loan. This is especially true of big items such as mortgages and 

car loans.

	 •Data on home maintenance and repairs. This is specifically n

data on additions and alterations. BEA would like to know how 

much is spent just on keeping a home running.

	 •Online purchases, including automated bill payment

	 •Keeping up with changes in the economy, including changes 

consumer electronics.

Question 9: Are your needs ongoing, or more of an ad hoc use?

Federal Reserve: Dr. Li’s uses of the data are ongoing. There is a long 

list of papers that could be written, and if the data could be improved 

(more of a panel nature, longer panel, less inconsistency), there would 

be even more to do with these data.

Centers for Medicare & Medicaid Services: Uses are ongoing, but there 

are some special studies.
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

222 MEASURING WHAT WE SPEND

Economic Research Service: Dr. Hanson’s use is more of a one-time 

nature, focusing on the relationship of expenditures to nutrition, especially for low-income households.

Bureau of Economic Analysis: The needs are ongoing.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

Appendix D

Statement of Work for CNSTAT 

Competitive Solicitation of Design Ideas

RFP #DBASSE-004950-0001-031411

INTRODUCTION

The Consumer Expenditure (CE) Quarterly Interview and Diary Surveys comprise a major program of the Bureau of Labor Statistics (BLS). The 

CE data are used to provide the market basket budget shares for one of 

the Nation’s most important statistics, the Consumer Price Index. The CE 

surveys’ unique and valuable data on the spending patterns of American 

consumers are used in a multitude of ways, including a new Supplemental 

Poverty Measure, IRS sales tax information, and economic research.

The design of the CE surveys must be updated periodically to align 

their methodology with changes in society, technology, consumer products, and consumer spending methods on survey estimates. Without such 

updates, the CE surveys will not be able to continue to fulfill their mission 

of producing high-quality expenditure estimates in support of their critical 

uses. All household surveys today face well-known challenges that include 

increasingly busy respondents, confidentiality and privacy concerns, many 

competing surveys, controlled-access residences, and non-English speaking households. In addition, the CE surveys face a unique challenge as the 

phenomena the surveys seek to measure have changed over the past 30 

years, and continue to do so. Although the CE has made a number of improvements to the survey design, such as transitioning to computer-assisted 

personal interviewing (CAPI), it has not implemented changes within a 

systematic, comprehensive framework to address this, and other, challenges.

223
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

224 MEASURING WHAT WE SPEND

The CE surveys are faced with multiple issues that directly impact the 

quality of the data collected. These issues, presented in order of importance 

below, include (a) evidence of measurement error, most importantly underreporting, in the survey data, (b) changes in the survey environment due to 

both new technology and consumer behaviors, and (c) the need for greater 

flexibility in the mode of data collection. (See “Background Material” on 

p. 227 for links to more information.)

Measurement Error. Underreporting in the CE is evidenced by a growing deviation from other data sources and by the results of several 

studies. Since 1984, the ratios of aggregate expenditure estimates from 

the CE compared with Personal Consumption Expenditures (PCE) data 

from the National Accounts have shown a declining trend for many 

expense categories. Internal methodological studies and the 2008 CE 

Program Review had similar findings, providing further evidence of a 

growing concern about the quality of reported data. Underreporting in 

the CE may result from respondent burden due to survey length and 

complexity, panel or questionnaire conditioning, increasing telephone 

administration of a survey originally designed for personal visit interviews, proxy reporting by a single household member, recall effects 

stemming from a 3-month reference period, and/or other causes.

Changes in the Survey Environment. To remain effective, the CE surveys must adapt to changes in purchasing behaviors. For example, 

respondents may purchase a variety of types of items in a single large 

store, such as Costco or Walmart, rather than buying a single type of 

item from a single store. The topic-specific design of the current survey 

instrument may not best aid respondent recall or reporting of this type 

of buying. It is equally unknown whether the current survey instrument 

is effective for capturing on-line purchases or automatic payments. 

Questionnaire design and data collection methods may have to be 

adapted to better account for these issues. Parallel to the changes in 

consumer behaviors, a transformation has been occurring in the technology available for collecting data. The availability of new technology 

and software, such as a Web diary, a portable digital assistant (PDA) 

instrument, or financial software sheets, offers new opportunities to 

collect data. Finally, administrative sources of expenditure data (such 

as transaction databases built from credit/debit and from loyalty card 

use) now exist that provide potential alternatives to survey data.

Flexible Mode of Data Collection. One size does not fit all, and the CE 

needs greater flexibility in data collection modes for two main reasons: 

to be responsive to the needs of respondents and to allow faster imple-
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX D 225

mentation of changes to collection instruments. Regarding the first, 

a multimode design would allow data collection to be tailored to the 

needs and preferences of the respondent. For example, some respondents have very little time, others have difficulty keeping a diary, and 

still others do not want an interviewer in their home. Each respondent 

would have different ways of optimally reporting their data. The second motivation for greater flexibility is to allow for design changes to 

be made responsively as society or technology changes. Currently making changes to the CAPI instrument requires considerable lead time, 

and even minor changes often impact the whole instrument. A survey 

design utilizing multiple modes, modules, and/or technologies may allow for changes to be made to a single mode without disrupting others.

National Academy of Sciences

The Bureau of Labor Statistics has undertaken a multiyear process to 

develop and implement a redesign of the CE surveys to address the above 

issues. As part of this process BLS has contracted with the National Academy of Sciences Committee on National Statistics (CNSTAT) to conduct an 

independent review of the design options available, and to make specific 

recommendations for redesign. CNSTAT has organized a panel of experts 

(subsequently referred to as the panel) from across the country to carry 

out that task. (Panel membership is presented in Appendix A.) The panel is 

seeking proposals for design options and a discussion of the relative merits 

of the options, particularly from organizations with experience in designing 

complex data collection methods. It is in this context that the panel initiated 

this Request for Proposal through the National Academy of Sciences. A 

subcommittee of the panel will serve as the selection panel for this contract.

Description, Scope, and Primary Tasks

The Contractor will produce a research report laying out a design 

(including research studies to evaluate the proposed design) to collect 

information required by the primary users of the current CE. The design 

should be robust to recent and potential changes in the data collection and 

retail environment discussed above. The proposed design should focus on 

features that are proactive in collecting information such as the use of scanners, PDAs, or external data sources. A recall survey would be used only to 

supplement information not otherwise available. Thus, the proposed design 

would be fundamentally different from that of the current Quarterly CE 

survey. NAS anticipates that a team approach may be needed to meet the 

conditions of this contract, and the Contractor may consult with experts 

outside its own organization.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

226 MEASURING WHAT WE SPEND

The report will (1) summarize the Contractor’s evaluation that led them 

to reach the final proposal, (2) detail the proposed design, and (3) provide 

recommendations for evaluating the proposal in a CE-specific context. Each 

of these elements is specified below.

1. The Contractor will develop a carefully balanced evaluation of the

prospective benefits, costs and risks of their proposed methodological 

and technological options compared to the current CE surveys. This 

evaluation should be

	 •	 developed and presented within the context defined by the primary

user needs identified in the background material.

	 •	 based on extensive and carefully balanced review of:

 literature and industry knowledge on household and establishment survey methodology and practice that is currently available or likely to be available in practical form in the next five 

years.

 data collection technologies and external sources of expenditure data currently available or likely to be available in practical form with the next five years. Examples include, but are 

not limited to: bar code or receipt scanners, audio diaries, PDA 

instruments, and retail “loyalty card” or transaction-processor 

databases.

	 •	 reflective of the tradeoff between cost and improvement on measurement error in terms of external benchmarks (e.g., CE to PCE 

comparisons) and other standard evaluations of data quality (e.g., 

subgroup comparisons).

2. Based on results from the evaluation described above, the report should 

detail a comprehensive proposal for a survey design, and/or other data 

acquisition process, which collects the required information. The proposal should describe all relevant elements for the development and 

implementation of the proposed design, including, but not limited to:

	 •	 data sources;

	 •	 sample design, including size, weighting and precision implications;

	 •	 data collection mode(s) and/or description of alternative acquisition;

	 •	 data collection procedures;

	 •	 estimates of the cost requirements for development, implementation, and ongoing data collection; and

	 •	 estimates of time requirements for development and implementation of the design, as well as time required to collect and process 

data to create required estimates for publication.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX D 227

 In the proposed design, the Contractor should address issues with the

current CE surveys:

	 •	 Underreporting of expenditures.

	 •	 Fundamental changes in the social environment for collection of

survey data.

	 •	 Fundamental changes in the retail environment (e.g., online spending, automatic payments).

	 •	 The potential availability of large amounts of expenditure data

from a relatively small number of intermediaries such as credit card 

companies.

	 •	 Declining response rates at the unit, wave, and item levels.

 The proposal may include a moderate number of methodological and

technological options, (e.g., a mixture of household-based and establishment/intermediary-based data collection) but should go beyond 

simply listing possible options. Instead the report should provide, to 

the extent possible, concrete and specific design elements supported 

by in-depth explanations and evidence from the Contractor’s evaluation. In other words, any proposed design should be practical and 

supported by evidence to demonstrate feasibility and have a rationale 

for expectations of improvement to the issues associated with the CE 

surveys.

3. In addition to proposing a new CE design, the report should include

clear recommendations for evaluating the proposal in a CE-specific 

context, such as a pilot study. The recommendation should include

	 •	 the design of a study or studies to evaluate the feasibility and effectiveness of the proposed design,

	 •	 a careful description of the ways in which the study or studies

would provide practical insights into the proposed new design, and

	 •	 estimated financial and time requirements for the recommended

study or studies.

Background Material

The Contractor will review background material pertinent to the potential 

redesign of the CE. Many of these materials can be found at the Gemini 

Project website (see http://data.bls.gov/cgi-bin/print.pl/cex/geminimaterials.

htm). These materials include, but are not limited to, the following:
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

228 MEASURING WHAT WE SPEND

	 •	 Gemini Project Vision Document.

	 •	 BLS Handbook of Methods, Chapter 16, Consumer Expenditures

and Income.

	 •	 BLS Statement of CE data priorities (available May 1, 2011).

	 •	 CPI Requirements of the CE.

	 •	 CE Data Quality Definition Report.

	 •	 Papers presented at the June 2010 CE Data Users’ Needs Forum.

	 •	 Papers presented at the Consumer Expenditure Survey Methods

Workshop, held December 8-9, 2010 in Suitland, MD.

	 •	 Papers presented at the March 2010 Data Capture Technology

Forum.

Deliverables

The following deliverables are required under this contract:

	 •	 Contractor will participate in a kickoff meeting no later than fourteen (14) days following the award of this contract.

	 •	 Contractor will produce monthly progress reports on the project.

	 •	 Contractor will produce a draft report for NAS no later than ninety

(90) days after the award of this contract. Draft report may be 

submitted electronically.

	 •	 Contractor will revise the draft report based on NAS comments

and provide 8 copies of the full report developed under this proposal and based on Description, Scope and Primary Tasks listed 

above. Final report is due 120 days from the contract award.

Contractor will present the basic information in the full report to the 

panel at its upcoming Workshop on Redesign Options for the Consumer 

Expenditure Surveys, scheduled for October 26–27, 2011, and participate 

with the panel and other members of the workshop in a discussion of design 

options.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

Appendix E

Household Survey Producers 

Workshop Agenda

Household Survey Producers Workshop

June 1–2, 2011

20 F Street NW Conference Center

Washington, DC 20001

AGENDA

June 1, 2011

8:30–9:15 a.m. Welcome and Purpose of Workshop

Connie Citro, Director, Committee on National 

Statistics

Mike Horrigan, Associate Commissioner, Office 

of Prices and Living Conditions, Bureau of 

Labor Statistics

Don Dillman, Panel Chair, Washington State 

University

9:15–10:45 Session 1: Alternative Ways of Measuring 

Consumer Expenditures with Special Focus on 

International Examples

Chair: Mel Stephens, Panel Member, University 

of Michigan

•	 Canadian Survey of Household Spending,

Guylaine Dubreuil, Statistics Canada

229
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

230 MEASURING WHAT WE SPEND

•	 UK Living Costs and Food Survey, Giles

Horsfield, Office of National Statistics

•	 Household Budget Surveys in the European

Union, Peter Paul Borg, European Union

•	 Discussant: Robert Gillingham, Panel

Member, Independent Consultant

10:45–11:00 Break

11:00 a.m.–12:30 p.m. Session 2: Designs That Add Flexibility in Data 

Collection Mode

Chair: Mark Pierzchala, Panel Member, 

Independent Consultant

•	 Nebraska Annual Social Indicators Survey,

Jolene Smyth, University of Nebraska

•	 Business R&D Innovation Survey, Richard

Hough, Census Bureau

•	 National Postsecondary Student Aid Study,

Jennifer Wine, RTI

•	 Discussant: Mick Couper, Panel Member,

University of Michigan

12:30–1:45 Working Lunch to Discuss Afternoon Sessions

1:45–3:15 Session 3: Designs That Effectively Mix Data 

from Multiple Surveys and/or External/

Administrative Data to Produce Estimates

Chair: Bruce Meyer, Panel Member, University 

of Chicago

•	 Medical Expenditure Panel Survey (MEPS),

Steve Machlin, AHRQ

•	 Residential Energy Consumption Survey

(RECS), Eileen O’Brien, EIA

•	 Behavioral Risk Factor Surveillance System

and the National Health Interview Survey: 

Combining Data for Small Area Estimates, 

Van Parsons, NCHS

•	 Discussant: Clyde Tucker, Panel Member,

Independent Consultant

3:15–3:30 Break
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX E 231

3:30–5:00 Session 4: Designs That Effectively Mix Global 

and Detail Information to Reduce Burden and 

Measurement Error

Chair: Rob Santos, Panel Member, Urban 

Institute

•	 Agricultural Resource Management Survey

(ARMS), Dave Aune, NASS

•	 Survey of Income and Program Participation

(SIPP), Jason Fields, Census Bureau

•	 National Health Interview Survey (NHIS),

Jane Gentleman, NCHS

•	 Discussant: Andy Peytchev, Panel Member,

RTI

5:00 Working Dinner at Art & Soul to Discuss Day’s 

Events

7:00 Planned Adjournment

June 2, 2011

8:30–10:00 a.m. Session 5: Designs That Use “Event History” 

Methodology to Improve Recall and Reduce 

Measurement Error in Recall Surveys

Chair: David Betson, Panel Member, University 

of Notre Dame

•	 Panel Survey of Income Dynamics, Frank

Stafford, University of Michigan

•	 Survey of Income and Program Participation,

Jason Fields, Census Bureau

•	 Discussant: Michael Schober, Panel Member,

New School for Social Research

10:00–10:30 Break

10:30 a.m.–12:00 p.m. Session 6: Diary Surveys That Effectively Utilize 

Technology to Facilitate Recordkeeping or 

Recall

Chair: Sarah Nusser, Panel Member, Iowa State 

University

•	 National Household Food Acquisition and

Purchase Survey (FOODAPS), Nancy Cole, 

Mathematica Policy Research
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

232 MEASURING WHAT WE SPEND

•	 Personal Diary and Survey Methodologies for

Health and Environmental Data Collection, 

Paul Kizakevich, Research Triangle Institute

•	 Nielsen Life360 Program, Justin Bailey, The 

Nielsen Company

•	 Discussant: Michael Link, Panel Member,

Nielsen

12:00–12:30 Closing, Wrap-up

Don Dillman, Panel Chair, Washington State 

University

12:30 Planned Adjournment
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

Appendix F

Redesign Options Workshop Agenda

Consumer Expenditure Survey Redesign Options Workshop

October 26, 2011

20 F Street NW Conference Center

Washington, DC 20001

AGENDA

October 26, 2011

8:00–8:30 a.m. Networking and Continental Breakfast

8:30–9:00 Welcome, Introductions and Purpose of 

Workshop

Don Dillman, Panel Chair, Washington State 

University

9:00–10:15 Presentation of Redesign 

Recommendations—Westat

•	 David Cantor, Team Leader

•	 Sid Schneider

•	 Brad Edwards

•	 Abie Reifer

10:15–10:45 Break

233
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

234 MEASURING WHAT WE SPEND

10:45 a.m.–12:00 p.m. Presentation of Redesign Recommendations—

University of Wisconsin–Milwaukee, 

University of Nebraska, Abt-SRBI

•	 Nancy Mathiowetz, Team Leader, University 

of Wisconsin–Milwaukee

•	 Kristen Olson, University of Nebraska

•	 Courtney Kennedy, Abt-SRBI

12:00–1:00 Working Lunch for Informal Discussion of 

Redesign Ideas

1:00–1:30 Discussant: Methodological/Cognitive Issues 

and the Proposed Redesigns

•	 Richard Kulka, Consultant

1:30–2:00 Discussant: Implementing Change in a Large 

Ongoing Survey and the Proposed Redesigns

•	 Chet Bowie, NORC (retired from U.S. Census 

Bureau)

2:00–2:40 Discussant Panel: Data Users of the Consumer 

Expenditure Survey

•	 Clinton McCully, Bureau of Economic 

Analysis. Macrodata use by a Federal program

•	 Mark Lino, Center for Nutrition Policy 

and Promotion, USDA. Microdata use by a 

Federal program

•	 Melvin Stephens, University of Michigan. 

Microdata use by a university researcher

2:40–3:00 Break

3:00–4:45 Open Discussion with Panel and Workshop 

Participants

•	 Michael Horrigan, Associate Commissioner, 

BLS

Discussion Leader

4:45–5:00 Ending Remarks and Wrap-up

•	 Don Dillman, Panel Chair, Washington State 

University

5:00 Planned Adjournment
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

Appendix G

Biographical Sketches of 

Panel Members and Staff

DON A. DILLMAN (Chair) is Regents professor in the Department of 

Sociology at Washington State University. He also serves as the deputy 

director for research and development in the Social and Economic Sciences 

Research Center at Washington State University. From 1991 to 1995, he 

served as the senior survey methodologist in the Office of the Director at the 

U.S. Census Bureau. His work at the Census Bureau resulted in his receiving the Roger Herriot Award for Innovation in Federal Statistics in 2000. 

He is recognized internationally as a major contributor to the development 

of modern mail, telephone, and Internet survey methods. Throughout his 

time at Washington State University, he has maintained an active research 

program on the improvement of survey methods and how information 

technologies influence rural development. He has served as investigator on 

more than 80 grants and contracts worth approximately $12.5 million, and 

written 13 books and more than 235 other publications. He holds numerous memberships in professional organizations, including the American 

Association for the Advancement of Science, American Sociological Association, and American Statistical Association. He served as past president of 

the American Association for Public Opinion Research and the Rural Sociological Society. He has a B.A. degree in agronomy, an M.S. degree in rural 

sociology, and a Ph.D. degree in sociology, all from Iowa State University.

DAVID M. BETSON is an associate professor of public policy and economics in the College of Arts and Letters at the University of Notre Dame. His 

research has focused on the impact of tax and transfer programs on the 

economy and the distribution of income. Of particular interest is child sup235
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

236 MEASURING WHAT WE SPEND

port policy. He has written academic papers and consulted with numerous 

state governments on the development of their child support guidelines. 

In 2007, he was appointed to the Washington State Commission on the 

Review of Child Support Guidelines. He holds memberships in the Association for Public Policy Analysis and Management and the American 

Economic Association. He has a B.A. degree in economics and physics from 

Kalamazoo College, and an M.A. degree in economics and a Ph.D. degree 

in economics, both from the University of Wisconsin–Madison.

MICK P. COUPER is a research professor in the Survey Research Center, 

Institute for Social Research, at the University of Michigan, and in the Joint 

Program in Survey Methodology at the University of Maryland and University of Michigan and Westat. He is also a faculty associate in the Population Studies Center and the Comprehensive Cancer Center, both at the 

University of Michigan. His current research includes survey nonresponse, 

design and implementation of survey data collection, effects of technology 

on the survey process, and computer-assisted interviewing, including both 

interviewer-administered (CATI and CAPI) and self-administered (Web, 

audio-CASI, IVR) surveys. Many of his current projects focus on the design of Web surveys. He is the recipient of several awards, including the 

American Association for Public Opinion Research (AAPOR) book award 

(with Robert M. Groves) and the AAPOR award for innovation. He is an 

elected fellow of the American Statistical Association and a member of several other professional organizations including AAPOR and the European 

Survey Research Association (ESRA). He has an M.Soc.Sc. degree in sociology from the University of Cape Town, an M.A. degree in applied social 

research from the University of Michigan, and a Ph.D. degree in sociology 

from Rhodes University in South Africa.

ROBERT F. GILLINGHAM is an independent consultant from Potomac 

Falls, Virginia. Current and recent clients include the International Monetary Fund, the World Bank, and the OECD. Prior to becoming a consultant, 

he held several positions at the International Monetary Fund, including 

chief of the Expenditure Policy Division and chief of the Poverty and Social 

Impact Analysis Group. He also worked at the U.S. Department of the Treasury—the last 10 years as deputy assistant secretary for economic policy. 

He started his career at the U.S. Bureau of Labor Statistics, rising to the 

position of deputy associate commissioner for prices and living conditions. 

He is currently a member of the National Academy of Social Insurance and 

has previously served on the board of directors of the Western Economic 

Association International and as an associate editor of Journal of Business 

and Economic Statistics. He is widely published, and his articles have appeared in numerous publications, including the Review of Economics and 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX G 237

Statistics, Energy Journal, and Journal of Economic Business and Statistics. 

He has a B.A. degree in economics from Haverford College and a Ph.D. 

degree in economics from the University of Pennsylvania.

CAROL C. HOUSE (Study Director) is a senior program officer for the 

Committee on National Statistics. She retired from the National Agricultural Statistics Service (NASS), USDA, in 2010, where she was deputy 

administrator for programs and products and chair of the Agricultural 

Statistics Board. Her previous positions at NASS included associate administrator, director of research and development, and director of survey 

management. She has provided statistical consulting on sample surveys in 

China, Colombia, the Dominican Republic, and Poland. She is a fellow of 

the American Statistical Association and an elected member of the International Statistical Institute. Her graduate training was in mathematics at the 

University of Maryland.

MICHAEL W. LINK is vice president for Research Methods Center of Excellence and chief methodologist at the Nielsen Company in Atlanta, Georgia. Prior to this he was a senior survey methodologist and acting branch 

chief at the National Center for Chronic Disease Prevention and Health 

Promotion at the Centers for Disease Control and Prevention. At Nielsen, 

he is responsible for identifying and monitoring the implementation of the 

most cost-effective methodological/operational solutions in order to constantly improve the quality of research methodologies. His work at the Center for Excellence focuses on identifying problems related to, and solutions 

for, improving the quality of research methodologies, including analysis of 

existing data sources, and implementation of best practices for these research methods. He has published more than 50 peer-reviewed articles and 

book chapters in journals such as Public Opinion Quarterly, International 

Journal of Public Opinion Research, Journal of Official Statistics, Survey 

Research Methods, and Field Methods, and presented research findings at 

more than 150 national and international scientific conferences. He has a 

B.S. degree in biology from Georgia State University, and M.A. and Ph.D. 

degrees in political science from the University of South Carolina.

BRUCE D. MEYER is the McCormick Foundation professor of public 

policy in the Harris School of Public Policy Studies at the University of 

Chicago. Prior to this appointment, he was a professor in the Economics 

Department at Northwestern University, where he taught for 17 years. 

His current research includes studies of poverty and inequality, tax policy, 

welfare policy, unemployment insurance, workers’ compensation, disability, the health care safety net, labor supply, and the accuracy of household 

surveys. Previously, he was a visiting faculty member at Harvard University, 
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Measuring What We Spend: Toward a New Consumer Expenditure Survey

238 MEASURING WHAT WE SPEND

University College London, and Princeton University. He is a research associate of the National Bureau of Economic Research and a member of the 

National Academy of Social Insurance and the Conference on Research on 

Income and Wealth. He has been associated with the Institute for Research 

on Poverty and is a faculty fellow at the Institute for Policy Research. He 

has served as an advisor to the U.S. Department of Labor, U.S. Bureau of 

Labor Statistics, New York State Office of Temporary and Disability Assistance, Human Resources Development Canada, Manpower Demonstration Research Corporation, and Mathematica Policy Research. He has B.A. 

and M.A. degrees in economics from Northwestern University and a Ph.D. 

degree in economics from the Massachusetts Institute of Technology.

SARAH M. NUSSER is a professor in the Department of Statistics and a 

faculty member in the Human Computer Interaction Graduate Program 

at Iowa State University. She is also a faculty member in the Ecology and 

Evolutionary Biology Graduate Program at Iowa State University. Prior to 

this she was a senior research fellow at the Bureau of Labor Statistics and 

a statistician at the Proctor and Gamble Company. Her research interests 

include using geospatial data in survey data collection and estimation, 

estimation methods for land cover map accuracy assessment, and sample 

design and measurement in surveys. Her experience includes service on the 

Census Advisory Committee of Professional Associations and with administrative records databases through research involving welfare program 

evaluation and numerous operational survey projects. She received the 

Board of Regents Award for Faculty Excellence at Iowa State University 

in 2010 and the Distinguished Achievement Award from the American 

Statistical Association’s Section on Statistics and the Environment in 2007. 

She has a B.S. degree in botany from the University of Wisconsin–Madison, 

M.S. degrees in botany and statistics, and a Ph.D. degree in statistics from 

Iowa State University.

ANDY PEYTCHEV is a senior survey methodologist in the Program for 

Research in Survey Methodology at RTI International and instructor in 

the Odum Institute at the University of North Carolina, Chapel Hill. He 

has collaborated on various experiments on optimization of data collection 

designs, aimed at reduction of cost, bias, and variance of survey estimates. 

He has led research on the design and redesign of major government surveys and is principal investigator on grants to study methods for estimation, reduction, and correction for survey nonresponse. His work has been 

published in peer-reviewed journals such as Public Opinion Quarterly, 

Journal of Official Statistics, and Sociological Methods & Research. He 

has received recognition for his service as a founding associate editor of 

Survey Practice and is currently an associate editor of Public Opinion 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX G 239

Quarterly. He is a member of the American Statistical Association and the 

American Association for Public Opinion Research, for which he has served 

on various committees. He has a B.A. degree in marketing from Concord 

University, an M.S. degree in survey research and methodology from the 

University of Nebraska–Lincoln, and a Ph.D. degree in survey methodology 

from the University of Michigan.

MARK M. PIERZCHALA is a private consultant providing systems, methods, and operations consulting services on survey-taking to private and 

government clients. Previously, he was a senior research statistician at 

the National Agricultural Statistics Service, where he became well known 

for his knowledge of data editing systems and the data cleaning methods 

they represented. He has a long history in data collection and data editing systems for complex U.S. and Canadian government surveys. He is an 

expert in the use of the Blaise survey processing system for data collection 

and postcollection editing. Currently, he is assisting with the testing and 

documentation of the emerging Blaise Next Generation system. At Westat, 

he was a senior systems analyst and was head of the Blaise Services Group. 

He helped the Bureau of Labor Statistics and the Census Bureau implement 

CAPI for the Consumer Expenditure Survey. Later at Mathematica, he had 

major roles in establishing the Blaise system for all modes of data collection, made methodological and systems advances for multimode surveys, 

and was the systems lead on complex multi-instrument studies. He has a 

B.S. degree in mathematics from Central Michigan University and an M.S. 

degree in mathematical statistics from Michigan State University.

ROBERT SANTOS is the senior institute methodologist in the Statistical Methods Group at the Urban Institute in Washington, DC. Prior to 

this,he was executive vice president and partner of NuStats Partners, LP, 

a social science research firm based in Austin, Texas. He also worked at 

NORC at the University of Chicago and the Survey Research Center at the 

University of Michigan. His expertise is in sampling, survey design, and 

survey methods and operations. His professional credits include numerous 

reports and papers and leadership roles in survey research associations. He 

has served as a member of the Census Advisory Committee of Professional 

Associations and on the editorial board of Public Opinion Quarterly. He 

has held numerous elected and appointed leadership positions in both the 

American Statistical Association and the American Association for Public 

Opinion Research. He is a fellow of the American Statistical Association 

and a recipient of its 2006 Founder’s Award for excellence in survey statistics and contributions to the statistical community. He has a B.A. degree in 

mathematics from Trinity University and an M.A. degree in statistics from 

the University of Michigan.
Copyright © National Academy of Sciences. All rights reserved.

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240 MEASURING WHAT WE SPEND

MICHAEL F. SCHOBER is dean and professor of psychology at the New 

School for Social Research in New York City. He has taught numerous 

graduate and undergraduate courses on subjects including human computer 

interaction, research methods, and psycholinguistics. His research focuses 

on interaction in survey interviews and the effects of new technologies 

on communication. He is the editor of the journal Discourse Processes, 

a position he has held for the past five years. He is widely published, and 

his articles have appeared in numerous publications including Cognitive 

Psychology, Journal of Official Statistics, and Public Opinion Quarterly. 

He holds many memberships in professional organizations, including the 

American Psychological Association, the American Psychological Society, 

and the American Association for Public Opinion Research. He has a Sc.B. 

degree in cognitive science from Brown University and a Ph.D. degree in 

psychology from Stanford University.

MELVIN STEPHENS, JR., is an associate professor of economics and 

associate professor of public policy at the University of Michigan and a 

research affiliate and faculty associate in the Institute for Social Research 

at the University of Michigan. He is also a research associate in labor studies at the National Bureau of Economic Research. Prior to this, he was the 

Raymond John Wean Foundation Career Development associate professor 

of economics in the H. John Heinz III School of Public Policy and Management at Carnegie Mellon University. His research interests cover such 

areas as displaced workers, household consumption decisions, and aging 

and retirement. Currently, he is on the editorial board of The B.E. Journal 

of Economic Analysis and Policy and is a member of numerous organizations, including the American Economic Association and Society of Labor 

Economists. He previously served as a referee for several publications, 

including the American Economic Review, Journal of Political Economy, 

and the Quarterly Journal of Economics and has been a reviewer for the 

National Institute on Aging and the National Science Foundation, among 

others. His work is widely published, having appeared in such publications 

as the American Economic Review, American Economic Journal: Applied 

Economics, the Economic Journal, and the Review of Economics and 

Statistics. He has a B.A. degree in economics and mathematics from the 

University of Maryland and a Ph.D. degree in economics from the University of Michigan.

CLYDE TUCKER is a former senior survey methodologist at the U.S. 

Bureau of Labor Statistics (BLS) where he served for more than 25 years. 

While at BLS, he cochaired the Interagency Research Group, which was 

responsible for revising the methodology for collecting information on race 

and ethnicity in federal surveys. He also served as a statistical consultant 
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

APPENDIX G 241

to the bipartisan Congressional Commission that assessed the impact of 

the Family and Medical Leave Act, and was a member of the committee 

overseeing the methodology of the Current Population Survey. His research 

interests include telephone survey design, survey nonresponse, and measurement error. He is an elected fellow of the American Statistical Association 

(ASA), is a past chair of the Government Statistics Section of ASA, and has 

held numerous positions on the AAPOR National Council. He is also a past 

president of the Washington Statistical Society. He is a past winner of both 

the Herriot Award for Innovation in Federal Statistics from the American 

Statistical Association and the Innovator Award from the American Association for Public Opinion Research. In election years 2004, 2006, 2008, 

2010, and 2012, he headed the decision desk for CNN. He has an M.S. 

degree in statistics and a Ph.D. degree in political science, both from the 

University of Georgia.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey

COMMITTEE ON NATIONAL STATISTICS

The Committee on National Statistics (CNSTAT) was established in 1972 

at the National Academies to improve the statistical methods and information on which public policy decisions are based. The committee carries 

out studies, workshops, and other activities to foster better measures and 

fuller understanding of the economy, the environment, public health, crime, 

education, immigration, poverty, welfare, and other public policy issues. It 

also evaluates ongoing statistical programs and tracks the statistical policy 

and coordinating activities of the federal government, serving a unique role 

at the intersection of statistics and public policy. The committee’s work is 

supported by a consortium of federal agencies through a National Science 

Foundation grant.
Copyright © National Academy of Sciences. All rights reserved.

Measuring What We Spend: Toward a New Consumer Expenditure Survey