METHODOLOGICAL ISSUES IN THE COLLECTION 

OF CONSUMER EXPENDITURES IN THE UNITED STATES

ADRIANA SILBERSTEIN 

BUREAU OF LABOR STATISTICS (BLS) 

Paper prepared for the Methodology Workshop at Statistics Sweden 

Stockholm - February 18-20, 1991 

The Consumer Expenditure Survey (CE) has been a continuing survey since 1980, including two 

components, Diary and Interview, with separate samples of households. The Diary is used to 

collect all expenses for two consecutive one-week periods, with special emphasis given to 

detailed frequent expenses, such as food expenses. The Interview has five panel waves to the 

same respondents and collects all expenses, especially sizable expenses. Data collected in the 

first wave, with one-month recall, are primarily used for bounding purposes, and are excluded 

from expenditure estimates. A three-month recall is used for most expenses in the other waves. 

Data from both components contribute to the estimation of annual expenditure means and the 

development of expenditure weights for the Consumer Price Index. 

Aside from cost considerations, cooperation levels, respondent burden, and data quality are 

critical issues in surveys. The length of the reference period, the questionnaire length, and the 

number of reporting intervals are factors affecting all three aspects. Diary and interview methods 

present different challenges for interviewers and respondents, but underreporting is a common 

effect. Many types of consumer expenditure surveys have resulted in an attempt to balance this 

problem vis a vis the ever-increasing demands for data. While nonresponse has been kept within 

reasonable levels in the United States (15% for both components), comparisons with independent 

sources of expenditure estimates suggest underreporting levels of 40 percent or greater for certain 

commodities of the CE. For this reason, the development of improved methodologies has 

become very important. 

Recent research findings in the areas of recall bias and conditioning effects in the Interview, firstday bias and incomplete diarykeeping in the Diary, and comparisons with independent sources 

are included in section 1. Selected issues with regard to a redesign are discussed in section 2. 

Alternative collection methods have been suggested by BLS and other researchers 

to address these issues, and are briefly presented in section 3. They are meant to serve only as 

examples, with no analysis of the potential benefits or drawbacks. The workshop should serve as 

a source of discussion on the following topics: 

1) experience in countries where diary and interview methods are used sequentially

or concurrently for the same household, 

2) other collection methods that may be feasible for national programs,

3) criteria that should be used to match the collection method(s) with the type of

expense, and 

4) ideas for evaluating alternative data collection methods.

1. RESEARCH FINDINGS

1.1 Repeated-Interview, Recall, and Telescoping Effects 

Panel surveys collecting retrospective data exhibit conditioning and recall effects. These effects 

are usually in the form of reporting declines from one wave to the next and for events further 

back in the past. Differences in expenditure means by wave have been tested systematically, 

based on replies by respondents to the second through fifth waves in the years 1982/83 (n = 6,600 

per wave, 74% of all respondents). Judging from these aggregate comparisons, it appears that 
time-in-sample effects are moderate to small, whereas recall effects are large and widespread 

across commodities. Table 1 displays ratios to overall means for three commodities. Compared 

to the second wave, the fifth wave is 18% lower for home furnishings and 6 percent lower for 

apparel, when all recall months are combined (1 - col.5 / col.2). These declines are significant, 

but the decline for home maintenance is not significant. The declines from the first recall month 

(the most recent) to the third recall month (the most distant) are significant for each commodity. 

For waves 2 to 5 combined, the third recall month is 24 percent lower than the first recall month 

for home furnishings and 39 percent lower for apparel. 

Further data analysis has compared the first wave to subsequent waves, in order to assess the 

extent of telescoping effects. These tend to inflate the reports due to the inclusion of expenses 

outside the reference period. The analysis was based on replies by respondents in all five waves 

for the year 1984 (n = 3,200 per wave, 70% of all respondents). Selected findings are displayed 

in Table 2. The overstatement due to unbounded data collection is estimated to be substantial. At 

the commodity level of aggregation, estimates are 18 percent for apparel and 37 percent for home 

furnishings, under certain assumptions (1 - col.2 / col..1). These results underscore the need to 

use bounding methods. The first wave, with a short recall period of one month, appears to 

provide higher reporting after the exclusion of telescoping effects. Mean expenditure estimates 

of one-month recall, net of telescoping, are 16 percent greater than comparable estimates for the 

three-month recall, for apparel (col.2 / col.3 - 1). Noteworthy, potential gains from a short recall 

period tend to increase for smaller expenses, but may become marginal for big-ticket items. 

1.2 Diary Performance 

Declines in reporting by diary day and week are well known, and are found again in the current 

CE. This analysis was based on diaries completed solely by respondents for the two weeks in the 

year 1987 (n = 3,935 per week, 66% of the respondents). On average, the first day of the first 

week exhibits an expenditure mean 35 percent greater than the overall mean. Mean expenditure 

estimates for the second week are 11 percent lower than first-week estimates. These effects are in 

remarkable agreement with findings from the 1972/73 CE (Pearl, 1979). 

The procedure followed in the United States allows diaries to be completed (partially or totally) 

by recall at diary pickup. In most years, 10 percent of the diaries have partial recall, and 15 

percent have total recall. These diaries exhibit lower expenditure levels than diaries completed 

by respondents, indicating that these respondents either have fewer expenses or report less 

expenses. These diaries also lack specificity in the reported data more often than diaries 

completed by respondents, and this seems to be a logical outcome of the procedure. 

The Diary sample design allows continuous data collection throughout the year, within a 

placement schedule. Seasonal patterns from the two components show some dissimilarities for 

selected commodities. The month of December has relatively lower reporting in the Diary 

compared to the Interview. Ratios of monthly means to the overall monthly average for the year 

1987 are shown in Table 3. While there are many differences in the two methods of data 

collection, a Diary-specific problem may be the potential disclosure of gift items for family 

members. 

1.3 Expenditure Estimates 

Certain commodities are believed to be underreported in both CE components, judging from 

comparisons with independent sources, such as the personal consumption sector of the National 

Accounts (NA). Ratios of aggregate CE to PCE estimates for the years 1984 to 1987 are 

displayed for selected commodities in Table 4. The methodology used in the estimation system 
selects data from both sources at the detailed level according to the estimate with the lower mean 

square error (MSE). (In addition to variances from the two components, NA estimates are used to 

develop the MSE.) In some instances, 50 percent of the categories within a commodity are 

derived from each component. The current source selection for apparel categories is shown in 

Table 5. 

The source selection is not always consistent with a priori expectations, although specialized 

comparisons of means and distributions give, in general, more expected results, confirming that 

the Diary captures smaller expenses to a greater degree, whereas the Interview yields stronger 

data for less frequent or more salient expenses (Silberstein and Scott, 1990). Despite possible 

improvements in the source selection methodology, a number of problems would remain. The 

estimates so derived are still quite low, and the selection of one or the other source does not 

translate into any reduction in respondent burden. 

2. ISSUES IN A REDESIGN 

Reduction in respondent burden 

If the questionnaire is excessively long, it must be conducted at a very fast pace in order to 

complete it within a reasonable time. (On average, it takes two hours to complete the interview.) 

Respondents should be given fewer questions to reduce fatigue associated with the interview and 

have more time to think about the answers or consult records. Examples may be: 

 - Reduce the number of times certain sections are asked in the panel, thus reducing 

 the number of sections in a given interview 

 - Reduce the amount of detail for certain sections 

 - Streamline the interviewing technique 

Improvements in expenditure estimates 

Recall problems are severe for certain types of expenses. A three-month recall may be unrealistic 

for frequent purchases, especially for households with numerous members and expenses. Other 

factors influencing underreporting are proxy reporting and an interview style that tends to induce 

negative answers. Alternatives may be: 

 - Shorten recall for certain expenditures 

 - Have respondents keep a diary during the intervening months of the panel 

 - Transfer certain sections to a Diary component for nonfood expenses 

 - Provide personal diaries 

Constraints due to data needs 

Besides providing sufficient sample size for expenditure estimates and CPI weights, the design 

should allow extended research. Two issues are briefly noted. Complete coverage of expenses 

within the Interview is desired, stemming from the idea that meaningful economic research can 

only be derived from a complete picture of yearly spending at the microlevel. This data need is a 

major obstacle to a redesign that would limit the data to be collected from each respondent. 

Collecting some of the data as summary (global or usual) expenses can be introduced as an 

alternative, although there are problems associated with this method. 

Statistical linkage between survey components is also desired for research. This tends to increase 

the size of the questionnaire. The list of variables that may be useful can be quite extensive and, 
at a minimum, should include demographic, housing, and income characteristics, and data on the 

estimated market (and rental) value of owned homes. 

3. ALTERNATIVE METHODS 

Many specific data collection techniques have been tested in several countries, and there is a 

considerable body of literature on the subject, dating back at least 40 years. Each country has 

developed methods believed to be acceptable, if not optimal. More information is needed on the 

success of current methods. The criteria for defining what is "successful" should be developed. 

There seems to be agreement at BLS that the current Interview questionnaire is too long, although 

it is still expanding due to increased data demands and more precise wording of questions. One 

approach to develop alternative collection methods would be to restructure the CE into a 

modular-type survey, where specific techniques would be addressing different collection 

problems, with the overall goal to reduce respondent burden. Another approach would limit the 

redesign effort towards improving areas of expenses with the greatest problems in the current 

collection methods. 

Selected changes to the three-month recall may be needed for improving the quality of responses. 

Shortening the recall period for some expenditures would reduce respondent burden and improve 

response quality, especially for frequently-made expenses. This technique can also be applied in 

the form of limiting the collection of repetitive expenses to the most current one (e.g., the last 

utility bill). As for apparel and other expenses that are difficult to recall, diary and interview 

methods may have to be used before substantial improvements can be achieved. Switching to 

one-month recall may not be sufficient to overcome underreporting. A special diary could be 

designed for these expenses, since the diary method with emphasis on food items discourages 

reporting of other expenses. The use of personal diaries should be considered to curb 

underreporting which results from proxy reporting and disclosure problems in the case of gifts. 

Lengthening the recall period for certain expenditures can reduce respondent burden, especially 

for large infrequent expenses. The rationale for this technique is that respondent burden may be 

less when asking about large purchases, for instance, one time every six months rather than two 

times every three months. If these questions are asked only once during the panel, telescoping 

effects may be sizable. For large expenses, however, fewer telescoping errors are made and more 

efficient estimates can be derived with a longer recall. 

Examples of possible techniques to restructure the CE are outlined within three types of methods: 

1) modular interview, 2) core and supplement, and 3) designing a special component for selected 

commodities to be excluded from the current components. 

 1) Modular panel interviews 

This method reduces the panel of five waves with all sections to five waves with a varying 

number of sections. Some sections may be transferred to a second Diary. Examples may be as 

follows: 

- Rotated sections by wave: all sections would be collected from each reporter with 

 three-month recall, but only twice, first time for bounding 

- Split questionnaire: after a bounding first wave, collect Part A in the 2nd and 4th 

 waves, Part B in the 3rd and 5th waves (4th and 5th waves with six-month recall). 
 2) Panel interviews with core and supplement(s) 

One version of this method would collect all expenses in a core questionnaire, although not all at 

the same level of detail. The supplements would then be used to obtain detailed information on 

specific sets of expenses. Another version may select a number of sections to be collected in each 

wave (core), and a number of sections to be collected only as supplements. In this case, only a 

small part of the questionnaire would be selected as a core, and most of the questionnaire would 

be selected as supplement, although infrequent expenses may have to be included in the core to 

insure sufficient sample. A set of selection criteria would have to be decided. 

Possible features: 

- Variable number of waves by section 

- One-time supplements for certain sections, two-time supplements for others 

- Variable recall length by section and/or wave. 

 3) Design a third component 

The three components would include one Panel Interview and two Diaries, with limited overlap. 

One option would be to design a Food Diary and a Nonfood Diary. Alternatively, the second 

Diary would be devoted primarily to sections known to be underreported, rather than to all 

nonfood items. These sections would be eliminated from the two existing components. An 

added feature of the second Diary could be to include a follow-up interview one month after the 

end of the diary in order to capture additional (large) expenses. 

NOTE: 

Three research methods are used at BLS: 1) statistical analysis of data to obtain estimates of 

response error and other effects, 2) field experiments to test the effectiveness of new techniques, 

and 3) cognitive laboratory studies to improve collection procedures. Of these, only selected 

findings from statistical analysis are discussed here. Research on respondent characteristics and 

their potential association with measurement error and nonresponse is reported in several papers. 

(See, for instance, Garner and Blanciforti, 1987; Silberstein, 1989; Tucker, 1990.) Results from 

field tests and cognitive laboratory studies are included in papers by E. Jacobs et al. and by C. 

Dippo, both presented at the 1989 ISI, and are discussed in detail in numerous papers (Miller and 

Downes-Le Guin, 1989; Tucker, 1986; Tucker and Bennett, 1988; Tucker et al., 1989). 

ACKNOWLEDGMENTS 

Thanks are extended to Thesia Garner and Clyde Tucker for their comments. 

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