CE Data from the Perspectiv

Researchers and Survey Man

Man

Geng Li * Robert F. Sc

Economist Co‐Director Director, 

Federal Reserve Board University of 

Consumer Expenditure Survey Data Users’ Need

Bureau of Labor Statistics, June 21 – 22

*The view presented here are those of the authors and do not necessarily represent those of the Federal Reserve B
Disclaimer

• The views presented presented are those of those of the a

a

and are not necessarily those of the Fed

Reserve Board or its staff.
Experience Using the CE da

• We have been using the CE quarterly quarterly

interview public use micro data for the 

years

• W h e use the CE b h ot as i i nputs in our res

and as the subject of the research
Issues we have examined examined wit

wit

• Do households households smooth large anticipated anticipated incr

incr

advance?

– Yes. Coulibaly and Li, 2006, ReStat

• Does the debt service ratio help identify liqui

constrained households?

– Yes. Johnson and Li, forthcoming, JMCB

• Are ARM borrowers less able to smooth

consumption?

– Yes. Johnson and Li, 2010
Issues we have examined with 

• Do self‐employed consumers tend to under re

their income to surveys?

– Yes. Hurst, Li and Pugsley, 2010

• Do gambling cost crowd out savings or alterna

expenditures?

– S i av ngs. Li, 2010

• CE’s liability data compare favorably to the SC

– Johnson Johnson and Li, 2009, MLR

• PSID’s new expenditure data compare with th

favorably

– Li, Schoeni, Danziger and Charles, 2010, MLR
Proposed Enhancements to 

• More/better data on determinants of expenditures

– Health, employment/job loss, income, income

expectations

• Substantial longitudinal component

• Richer balance sheet information

– Better income and asset data

• Improved fidelity and consistency in imputation

– Interest Interest rates of ARM contracts contracts and refinancing refinancing 

• Better coverage of smaller expenditure categories

– E.g., gambling and games of chance
Can one survey meet all objecti

objecti

• Primary objective objective of the CE

– to provide the basis for revising the weigh

associated associated pricing pricing samples samples for the CPI

• Secondary objectives

– timely and detailed detailed information information on the spe

spe

patterns of different types of families

– support support investigation investigation of wide‐ranging ranging set o

scientific and policy research questions
Design features necessary to achieve sec

obj i ect ves b h i ut not the primary obj 

ect 

• Longitudinal survey following individuals and familie

many years

• Measures in numerous additional domains

– Income and program participation– Employment and job loss/changes

– Wealth– Health

– D hi emographics

– Contextual/neighborhood factors

– Expectations

• Directed Directed by academic academic and policy researchers researchers to ensu

content & design evolves to meet changing needs of 

community
Design features that CE has but are not ne

to achieve many of h d t e secondary obj 

ec

• Quaterly interviewing

• Detailed expenditure categories
Options to consider

• Do not design one survey to meet all nee

– Focus on achieving the primary objective w

• While a focused focused CE can help answer help answer som

scientific and policy questions, invest in o

resources resources to meet the secondary secondary objectiv

objectiv
Options to consider consider (2)

1. Create a new longitudinal survey focused specific

consumption‐related issues that would be led by 

scientific and policy community

– Challenge: expensive, & unclear who would fund

2. Supplement existing surveys with required consu

expenditure data

– Advantages:

• relatively modest costs that could be funded in part by s

achieved from CE that is scaled back to focus on primary 

• Could be led by scientific and policy community with inp

funder (e.g., cooperative cooperative agreement) agreement)

– Surveys that could be supplemented:

• CPS, SIPP, NHIS, NLS, PSID, HRS