Consumption Pattern of the Middle 

Class Household

: using Consumer Expenditure Survey

The George Washington University

Ph.D Candidate, Rosa (Hyun Kyong) Lee

July 18th, 2018 

Microdata User’s Workshop at Bureau of 

Labor Statistics
A first-time user 

• Read “Getting Started with Consumer Expenditure Survey (CE) PublicUse Microdata (PUMD)” document

• Select which survey data will be useful for your research topic

: Interview Survey or Diary Survey

• Select which year data you would like to explore

: Download year-specific Data Dictionary & Documentation
Definition of the middle class

Income 

based

Assets (or 

Wealth) 

based

Consumption 

based Value based

Income (before

tax & transfer);

Income (after 

tax & transfer); 

Poverty line

Savings;

Estate;

Other

personal 

properties

Consumption capacity

(Disposable Income);

Purchasing power;

Standard of living;

Life style; 

Educational 

attainment;

Occupation;

Home ownership
Goals: What am I aiming for using CE?

• Consumption patterns of American Middle Class

: using Income-based definition (3 income categories: below-middle 

class, middle class, and above-middle class

• Unit of Analysis: Household

• Geography of interest: Metropolitan Statistical Areas (MSAs)

Consumer Unit (CU) 

in CE

Primary Sampling Unit (PSU)

In CE
How I used CE Interview Survey

• Step 1: Data cleaning

Appending

• 2015 Interview 

Quarterly Data

• Including 2016 

the first quarter

Dropping

• Deleting 

unnecessary CU 

(non-metro 

area)

Naming

• Matching PSU 

code with the 

standard MSA 

name
How I used CES Interview Survey

• Step 2: Dividing CU sample into 3 groups using income-based middle 

class definition

(Household’s income fall into between 75% and 250% of the national 

median household income)

• Step 3: Aggregating expenditure variables to generate annualized 

sample mean by each class

 Creating broad categories of expenditure

: Using 8 CPI consumption basket categories as a base

: Plus 2 other categories
How I used CES Interview Survey

Categories Variable Name

Food & Beverages Foodpq; alcbevpq; foodcq; alcbevcq

Housing Houspq; houscq

Apparel Apparpq; apparcq

Transportation Transpq; transcq

Medical Care Healthpq; healthcq

Recreation Entertpq; entertcq

Education and Communication Educapq; educacq

Personal Insurance, Pension, Saving Perinspq; perinscq

Cash contribution Cashcopq; cashcocq

Other Goods And Services Reading , personal care, tobacco 

Miscellaneous
Challenges: Questions at hand

• Different terms & acronym 

: PSU code is different from 2010 & 2015  MSA (Metropolitan 

Statistical Areas)

< 2010 CE Interview Survey >

< 2015 CE Interview Survey >
Consumer Units living in Metropolitan 

Areas

Consumer Units 

classified as

Number Percent

Below- middle class 4,805 38.0

Middle class 5,863 46.4

Above- middle class 1,979 15.6

Total 12,647 100

How well does the income-based definition capture the standard of living

Of the middle class?
Identifying probably-miscategorized 

Consumer Units (CU)

• At least three different cases are possible.

• Case 1: CU whose annual cash contribution is higher than their annual 

income

• Case 2: CU classified as a lower class, but with non-zero cash 

contribution

• Case 3: CU classified as a upper class, but their number of earners is 

more than three (implying their standard of living might not be similar 

to other upper class CU)

** Special thanks to Taylor Wilson at BLS for his advice! 
Case 1: CU whose annual cash contribution 

is higher than their annual income

• The mean age of ‘Case 1’ sample was about 53 

• Their average income: $98,679

• Their median income: $74,638

Consumer Units 

classified as (2015)

Number Case 1 count

Below- middle class 4,805 1,639

Middle class 5,863 2,799

Above- middle class 1,979 1,222

Total 12,647 5,660
Case 2: CU classified as a lower class, 

but with non-zero cash contribution

• Total of 1,639 CUs in 2015 Interview Survey data

• The mean age of ‘Case 2’ was about 59.

• Total of 1,179 CUs has contributed 

more than a million dollar, but 

they were classified as below-middle

class due to their low income.

Their median 

income = 

$22,400

Their median 

cash 

contribution 

= $2.5 million

About 25% of the below-middle class CUs
Case 3: CU classified as a upper class, but 

with multiple earners (more than three)

Consumer Units 

classified as (2015)

Number Case 3 count

Below- middle class 4,805 Didn’t Count

Middle class 5,863 187

Above- middle class 1,979 143

Total 12,647
Consumption Pattern by Class

Categories Proportion of the total expenditure

Below-middle Middle class Above-middle

Food & Beverages 19.0% 15.9% 12.7%

Housing 41.2% 34.5% 31.9%

Apparel 2.0% 1.9% 2.4%

Transportation 13.9% 17.0% 14.2%

Medical Care 7.7% 7.5% 5.8%

Recreation 3.9% 4.4% 5.1%

Education and Communication 1.8% 1.7% 3.8%

Personal Insurance, Pension, Saving 5.0% 12.4% 18.0%

Cash contribution 2.9% 2.6% 4.3%

Other Goods And Services 2.7% 2.1% 1.8%
Consumption Pattern by Metro Areas 

(Among 23 selected metros) 

• Average proportion of housing expenditure by different class type 

(after Cost-of-living Index adjustment)

Metropolitan Statistical Area Adjusted Lower 

Class

Adjusted 

Middle Class

Adjusted 

Upper Class

Miami-Fort Lauderdale-West Palm Beach., FL 40.8% 33.9% 22.0%

Minneapolis-St.Paul-Bloomington, MN-WI 42.4% 29.8% 29.9%

New York-Newark-Jersey City, NY-NJ-PA 45.5% 38.1% 34.4%

Riverside- San Bernardino-Ontario, CA 46.1% 32.9% 30.5%

San Francisco-Oakland-Hayward, CA 44.8% 36.8% 39.7%

Tampa-St. Petersburg-Clearwater, FL 30.2% 34.1% 27.5%

Minimum Maximum
Takeaway & Suggestion for future CE

• The consumption data reveals the limitation of income-based class 

definition. 

• The Consumer Expenditure Survey provides a detailed picture how 

different income category household consume goods & services 

differently across U.S. metropolitan statistical areas. 

• Educating future CE users beyond this workshop using more popular 

channel, such as recorded video lecture, would benefit lots of people. 

Background on my research

• How to define U.S. “middle class”? 

• To what extent do different definitions matter? 

• What are the correlates of the degree of 

“middle-classnness” of metropolitan areas?

• To what extent does the“middle-classnness”of

metropolitan areas affect its economic 

outcome?

Essay 1

Essay 2

Essay 3
Age distribution for CU 

classified as below-middle 

class, but with non-zero cash 

contribution