BEA’s Use of Housing Rel

Data from the Consum

Consum

Expenditure Survey

Presentation at the CE Data Users Forum

On June 21,22 2010 at the BLS

by A ld rno J. Katz,

NEA Research Staff of BEA

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Disclaimer

▪ The author is with the U.S. Bureau 

Economic Analysis (BE‐40) and can 

reached at arnold.katz@bea.gov. T

views expressed are solely the autho

and do not necessarily reflect those 

the Bureau of Economic Analysis or 

U.S. Department of Commerce.

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Some CE Data Are Used In Benchmar

▪ BEA uses some CE data to establi

benchmark levels of estimates.

▪ Benchmark estimates: Benchmark estimates:

 Are made every 5 years in a 

comprehensive revision of the NIP

 Are consistent with a very detailed 

output table.

 Use the most detailed and accurat

source data.

 Anchor the levels of the various se

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Anchor the levels of the various se
Other CE Data Are Used As Extrapo

for Annual Estimates

 BEA uses other CE data to obtain annua

rates These are used to interpolate betrates. These are used to interpolate bet

two benchmarks and to extrapolate from 

latest benchmark levels. latest benchmark levels.

 The growth rates of this data are importa

The growth rates of this data are importa

their levels.

 The timeliness of this data is a major con

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Specific Areas Where CE Data Is U

 National income and product accounts 

CE data related to: 

 owner-occupied space rent employee payments for group health insur taxi fares prior to 2007, auto and truck lease payme

 BEA’s travel and tourism accounts use 

d t il d d t f th CE th t di ti i detailed data from the CE that distingu

expenditures made at home from those 

made away from home

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made away from home.
Less Use of CE Data Since 1998

▪ BEA made extensive use of CE data prior ▪ Since then much CE data has been rep 

lac

data from expanded business surveys, parin services.

▪ Business surveys are more reliable than 

household surveys because they are:

 Based on accounting data Based on a larger percentage of the sampling  Less subject to recall bias Less subject to recall bias

▪ CE data is still used to judge the accuracy 

from other sources

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from other sources.
CE Data is Used to Estimate Two

Key Housing Related Aggregates

▪ Space rent – the actual rent paid by tenan

occupiers and the imputed rent paid by ow

occupiers on their homes. It is a major component of personal consumption expenditures.

▪ Rental income of persons – consists most

actual rental income received by individuarent out real property plus the imputed nei f t Th income of owner occupants. These are m

as the space rent of owner and tenant occ

less housing related expenses

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less housing related expenses.
CE Data Used to Estimate Space R

▪ BEA estimates annual values of space re

owner-occupied homes using a special 

tabulation of the CE. CE data on homeoassessments of what their homes could rented for are used to estimate a mean rrented for are used to estimate a mean r

This rent is multiplied by the number of h

units, which is obtained from other sourcunits, which is obtained from other sourc

▪ The space rent of renter-occupied homes 

esti t d i i il th d l 

timated using a similar methodology. 

however, the CE is not used.

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Data Gaps that the CE Might Help W

▪ Loss of benchmark data on actual rents 

single-family homes due to the discontin

of the Residential Finance Survey.

▪ Better data is needed on closing costs.▪ Lack of data on expenditures and rents p

second and vacation homes and other dw

that are not someone’s principal residencof data on the number of second homes ti h

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timeshares.
Data Gaps that the CE Might Help Wi

▪ Lack good estimates of the average int

rates p y aid on various types of loans.

 Lack rates paid on mortgages. Also lack 

the amount of mortgg j 

a e debt subject to a

interest rates.

 Lack data on the average interest rates p

other loans.

 Could use data on foreign/domestic split o

expenditures made on trips. 

 Could use data on relative amount of driv

il t ti t i

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mileage spent on vacation trips.
CE Data Concerns: Timelines

▪ CE data is not received in time for the fi

annual revision after quarterly estimates annual revision after quarterly estimates 

made. So far this year, we have been extrap gp g olating space rent using data from 

2007 CE Survey. Data from the 2008 CSurvey will be introduced this July.

▪ Long periods of mechanical extrapolatio

produce problems especially around cycturning points.

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CE Data Concerns: Accuracy

▪ There may be a substantial difference 

between the amount that a home could 

act ll b t d f d th t th 

tually be rented for and the amount th

the homeowner thinks that he could reche rented the property out.

▪ BEA has a distinct preference for data o

actual transactions Perhaps BLS could actual transactions. Perhaps BLS could

identify which rents paid were for singlefamily homes.

▪ Without such transactions data BEA can 

directly assess the accuracy of the CE d

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directly assess the accuracy of the CE d

that we are currently using.