1 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Consumption Measurement at BLS: 

A Research Project 

Thesia I. Garner, Chief Researcher for Prices and Living Conditions

Adam Safir, Program Manager, Consumer Expenditure Survey Program

Bureau of Labor Statistics

FESAC Meeting

Session: Planning for a Comprehensive Consumption Measure using Consumer Expenditure Data 

December 10, 2021, 2:30–2:50pm 

Revised December 17, 2021

Virtual presentation
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Motivation

◼Motivation

BLS long term interest to produce consumption measure – responding to CE data users

Period of COVID-19 with more goods and services produced by household members

BLS is the producer of CE and ATUS data

Commissioner Beach’s support

◼ Related to recommendations of the Interagency Working Group (ITWG) on 

Evaluating Alternative Poverty Measures recommendations
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Goal

◼ Produce components at the micro level that can be used by researchers to produce 

his/her preferred consumption or consumption expenditure measure definition 

depending on purpose; public use microdata to be available similar to the CE PUMD

◼ Produce at the micro or consumer unit level an extended consumption measure (e.g., 

similar to the work that the Census Bureau is doing on expanding their income measure 

using the CPS-ASEC). 

Focus is on consumption as a well-being measure, not on replicating PCE National Accounts 

estimates 

 Supports multivariate analyses of well-being for different demographic groups

◼ After research is completed, regular production of both the components, official 

government statistics of consumption by consumers, and publication of annual average 

consumption by consumer units
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Well-being Outcomes as a Function of Resources 

and Processes

For other outcomes: https://www.oecdbetterlifeindex.org/

Processes

Skills (e.g., education, 

financial management, 

efficiency in converting 

inputs to outcomes)

Degree of resource 

allocation (power)

Circumstances (CU 

composition, disability)

Preferences

Available Resources

Income, in-kind 

transfers

Asset (financial)

Asset (nonfinancial)

Debt (access and 

use)

Time

Outcomes (e.g.,)

1. Consumption

2. Health status

3. Material deprivation

4. Life satisfaction

5. Happiness
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New BLS Initiative to Produce a 

Comprehensive Consumption Measure

◼ Measure being designed to reflect how consumer units (CUs) use resources (e.g., 

income, wealth, time, in-kind benefits) to meet their consumption/material “needs”

◼ References regarding concept

OECD 2013 Framework (consumption expenditures and final consumption)

BEA framework for PCE

CE 2000 Framework for Consumer Expenditure Survey

Guidelines from ILO (2003) and UNECE (2017)

ITWG on Evaluating Alternative Measures of Poverty

◼ Key data sources: Consumer Expenditure Surveys and American Time Use Survey

◼ In-house research

◼ Outside research: contract on valuing home production for own consumption
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Concept: OECD 2013 Framework

◼ Consumption expenditure - value of consumption goods and services used or paid for by a household to 

directly meet its needs

Purchase of select goods and services in the market

In-kind transfers from employers (e.g., health insurance)

Household’s own production of goods and services consumed

– Owner-occupied housing

– Owned vehicles

– Durables

– Other (e.g., child/elder care, meals)

In-kind transfers from other households and from businesses

◼ Actual final consumption - sum of 

Consumption expenditure 

Public in-kind transfers

Source: OECD (2013), OECD Framework for Statistics on the Distribution of Household Income, Consumption and Wealth, OECD Publishing, Paris, Chapter 5. Household Consumption, p.104. 
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BLS Comprehensive Consumption Measure

◼ Expenditures

for own

consumption

◼ In-kind benefits

public and 

private

◼ Flow of services ◼ Home 

production 

for own consumption

This Photo by Unknown Author is licensed 
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Data Sources - 1

◼ American Time User Survey (ATUS)

◼ Telephone interview

◼ One person in household

◼ How time present on one day

◼ 24-hour time diary collects detailed account of 

respondent's activities, starting at 4 a.m. the 

previous day and ending at 4 a.m. on the 

interview day

◼ The only simultaneous activity ATUS regularly 

collects is secondary childcare

Goods and Services Home Production

◼ Interview: in-person; Diary: record keeping 

◼ Entire consumer unit

◼ Interview: up to 4, 3-month recall; 

◼ Diary: daily for two consecutive weeks

◼ Different samples, data collection instruments, 

reference periods

◼ Out-of-pocket spending (acquisition 

approach/financial obligation)

◼ Rental equivalence for owned shelter

◼ Rent paid (market rent or less; related vars.)

◼ Stock of cars, trucks, and other vehicles
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Data Sources - 2

◼ National Compensation Survey (private + 

state & local government employers)

Childcare

Subsidized commuting

Wellness programs

Employee assistance programs

◼ Federal Benefits

Health insurance (OPM only)

Childcare

Subsidized commuting

Wellness programs

Employee assistance programs

In-kind Federal Government Benefits In-kind Employer Benefits (future)

◼ CPS-ASEC (households/members): reported 

receipt of government provided in-kind 

benefits

School meals (NSLP)

WIC 

LIHEAP (receipt and values)

◼ USDA: food programs

In-kind Transfers from Other Households 

and Non-profit Institutions

◼ To be determined
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BLS Consumption Symposium: September 22-23, 2021

◼ Purpose and topics

◼ National and international representation: 177 registrants and 31 presenters

◼ Major take-aways

Herculean goal, but worthy; BLS work will advance well-being measurement 

Challenges regarding 

– Public in-kind benefits not universally provided by government

– Private in-kind benefits (employer, private organizations)

– Transfers/gifts of goods and services received by the CU for own consumption from other CUs

– Accounting for home production for own consumption

– Controversial: health, education, in-kind benefits universally provided (e.g., public schools, 

roads, defense)

– Comparability to PCE (ongoing research within BLS and BEA)
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In-house Research: 

Service Flows from Non-financial Assets

◼ Limited to

Owner-occupied housing 

Vehicles

◼ Primarily two main valuation approaches used internationally

Rental equivalence

User costs 

◼ Both can be used to measure changes over time in the value for the flow of services consumed by 

owner-occupants or vehicle owners 

◼ In theory, both approaches should produce equivalent values, but rarely do empirically

◼ Choice of valuation approach dependent on presence of rental market (but also data available)

◼ Literature 

Primarily focuses on owner-occupied housing 

Implication that the same or similar methods can be used for durables or non-financial assets like vehicles (see 

ILO 2003, paragraph 292)
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Rental Equivalence versus User Costs

◼ Selling price of the service: “...rental equivalence approach attempts to measure the change in the 

price of the housing service consumed by owner-occupants by estimating the market value of those 

services” (ILO 2004, p. 180)

◼ Costs of producing (using) the service: “...user cost approach attempts to measure the changes in the 

cost to owner-occupiers of using the dwelling; user costs account for both recurring costs and the 

opportunity cost of having money tied up in the dwelling rather than being used for some other 

purpose” (ILO 2004, p. 179). 

◼ Applicable to vehicles and durables
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Owner-occupied Shelter: Rental Equivalence

◼ If someone were to rent this “dwelling” how much do you think it would rent for monthly, 

unfurnished and without utilities?

◼ Optional treatments for owner shelter-related expenses (those not implicitly included in 

rental equivalence)

1. Exclude all

2. Ratio adjust as is done for Consumer Price Index to make them “renter-like”, for example

▪ Adjust expenditure for homeowners’ insurance premium by a factor is 0.41 to reflect the share that only 

covers “contents and personal items” (tenants’ insurance) 

▪ Adjust expenditures for homeowners’ landscape maintenance by a factor of 0.061 to reflect share not 

covered by rental equivalence (rental contracts that require renter to maintain the yard at their own 

expense)
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Stock of Owned Vehicles: User Costs

◼ User costs components

Depreciation

Opportunity costs

Recurring costs (vehicle insurance, maintenance & repairs, gasoline & oil, and electric for electric vehicles)

◼ Based on stock of vehicles (CE Interview)

◼ Impute current market value for new and used cars and trucks using

Vehicle make, model, and year

Vehicle purchase price

◼ Derive depreciation from calculated depreciation rate applied to imputed current market value

◼ Derive opportunity costs by applying U.S. Securities rates (inflation indexed) to current market value

◼ Recurring costs added for all vehicles (cars, trucks, motorized camper-coach, motorcycle, boat with motor, 

private plane)
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In-house Research: Statistical Modeling

◼ CPS-ASEC to CE

◼ CU and household characteristics

◼ CE and CPS ASEC pooled

◼ SAS Proc MI

◼ CPS ASEC receipt assigned to CE 

consumer units with “missing” benefit 

receipt/value

NSLP

WIC and infant formula rebate

LIHEAP (receipt and value)

Market Rent imputations In-kind Benefits

◼ CE Interview

◼ Market and reported rents & rental 

unit characteristics

◼ SAS Proc QLIM

◼ Imputed rents for:

Government assistance received to help pay 

rent

Live in public housing

Live in rent-controlled unit
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◼ From ATUS to CE (donor to recipient records)

Prediction

Statistical matching

◼ Valuation

Opportunity costs

Replacement/market costs

Home Production and Interhousehold 

Transfers Received

Approaches and Valuation

◼ Surveys

ATUS (individual person’s time use)

Augmented with data from

– PSID (time use within household)

– SIPP (receipt of childcare from outside HH)

– HRS (receipt of adult care from outside 

HH)

Impute to CE consumer units

◼ A major challenge: assigning one-day individual 

time use to three-month time period of CUs

FY22 Contract Research: Levy Institute Team
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◼ Scope and valuation

◼ Consumer Expenditure Survey

◼ American Time Use Survey

Challenges and Opportunities

Framework Comparison

Discussion

◼ OECD/PCE

◼ CE definition of expenditures

◼ Consumption

Motivation

◼ Outcome: How we live

◼ Consumption smoothing
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15 25 35 45 55 65 75 

Lifetime

Income curve

Saving

Consumption

Dissaving

Dissaving

Youth

years

Working years

Retirement

years

Life Cycle Theory of Consumption

suggests that individuals plan their consumption and savings behavior over the course of their lives
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Challenges and Opportunities 

◼ Scope and valuation

◼ Consumer Expenditure Surveys

Interview, Diary, both (or integration of Diary and Interview survey data at the CU level)

No to little data collected on in-kind transfers (public, private); dependent on imputation 

Availability and timeliness of administrative and employer provided data for benefits & 

permission to use

Quality of data adjustments (e.g., imputation, allocation) 

Production of annual estimates dependent on longitudinal weights which are not currently 

available (issue of seasonality)

Redesign efforts could complicate production of a consistent measure of consumption over time

◼ American Time Use Survey 

Scope of home production (e.g., childcare, elder care, meals)

Conversion of person-day data to quarterly
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Framework Comparison: Consumption

Item

Consumption / 

Expenditures 

(OECD / PCE) *

CE Definition of 

Expenditures

Proposed BLS 

Consumption

Planned

Research

Acquisition cost of services and non-durable goods Yes Yes ^ Yes n/a

Financial services Yes Yes Yes n/a

Service flow from housing services Yes No Yes n/a

Service flow from vehicles ** Yes/No No Yes Yes

Service flow from other durable goods ** Yes/No No Yes No

In-kind receipt of goods and services *** Yes No Yes Yes

Other home production ** Yes/No No Yes Yes

Interhousehold transfers (including gifts received) ** Yes/No No Yes Yes

Health Yes Yes ?? Yes

Education Yes Yes ?? n/a

* Purchased by consumers or through transfers from employer, government, or private institutions serving households

** Yes/no: in OECD, not PCE

*** Only food and rent as pay for CE publication

^ For CE, all goods and services
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Framework Comparison: Not Consumption

Item Consumption / Expenditures 

(OECD / PCE) *

CE Definition of 

Expenditures

Proposed BLS 

Consumption

Gifts (G&S) given outside household Yes Yes No

Life insurance/other personal insurance Yes Yes No

Cash contributions ** No/Yes Yes No

Purchase price of vehicles ** No/Yes Yes No

Purchase price of other durables ** No/Yes Yes No

Annuities, pension, other retirement contributions No Yes No

Mortgage interest payments No Yes No

Vehicle loan interest payments No Yes No

Interest payments on other debt No Yes No

** No/Yes: Not OECD but in PCE
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Questions for FESAC

1. Do you agree with the proposed BLS consumption framework?

2. What about the treatment of health and education: consumption or investment?

3. Should we consider calibrating consumption estimates to PCE aggregates? 

4. What are your suggestions for identifying and valuing in-kind transfers of goods and 

services?

5. Is it desirable to consider how consumption is “funded”?

• Current income and in-kind benefits

• Withdrawals from assets

• Use of debt

6. What is the role of subjective assessments in the determination of inputs and outcomes?

• Difficulty meeting financial obligations (e.g., rent payments) and/or consumption needs of family

• Food security, happiness, etc. 
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Contact

Thesia I. Garner, Ph.D.

Chief Researcher for Prices and Living Conditions

Bureau of Labor Statistics

Washington, DC 20212

Garner.Thesia@BLS.gov

Office telephone: (202) 691 6576
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Health Insurance & Education

◼ Approaches to valuing health insurance consumption 

Willingness to pay

◼ Requires further research

Treatment of health/medical out-of- pocket expenditures not covered by insurance, e.g., copays, deductibles, prescription drugs, and over the counter items

◼ Expenditures on education be excluded 

Why? Because education generally considered an investment in human capital

◼Whether and how to treat education within a consumption measure

Additional stakeholder and expert engagement

◼ Use of Medicare, Medicaid, employer provided health insurance data to facilitate 

estimating a value of health insurance ; Focus on health insurance in terms of 

consumption, therefore using Medicare, Medicaid, and benefits data to impute