Consumer Expenditure Survey

CNSTAT Panel Briefing

BLS Consumer Expenditure 

Survey Program Staff

February 8, 2011
CE Overview 10:30 – 2:00

 Official Charge to the Committee

 Background & Measurement Objectives

 CPI uses

 Survey design & Data Collection

 Sampling & Estimation

 Information Dissemination & Data Users

Consumer Expenditure Survey

CNSTAT Briefing
CE Redesign 2:00 – 5:00

 Measurement Error & Gemini

 Data Comparisons

 New Designs & Data Collection Technology

 Other Data Sources

Consumer Expenditure Survey

CNSTAT Briefing
Speakers

 Michael Horrigan, Associate Commissioner, Office of Prices and 

Living Conditions

 Jay Ryan, Chief, Division of Consumer Expenditure Survey (DCES)

 Adam Safir, Chief, DCES, Branch of Research and Program 

Development

 Steve Henderson, Chief, DCES, Branch of Information and Analysis

 David Swanson, Chief, Branch of Consumer Expenditures (Division 

of Price Statistical Methods)

 Robert Cage, Chief, CPI, Section of Index Cost Weights

 Thesia Garner, Research Economist, Division of Price and Index 

Number Research

Consumer Expenditure Survey

CNSTAT Briefing
Jay Ryan DCES Division Chief Carolyn Pickering Production

Branch Chief Meaghan Smith Phase 2

Section Chief Troy Olson

Phase 3

Section Chief

Adam Safir

Research

Branch Chief Steven Henderson InformationBranch Chief John Rogers

Publications

Section Chief Nick Zwileneff

Processing

Section Chief LaVern James

CEIS Division Chief

Manoj Talwar

Expenditures

Branch Chief David Swanson SMD CE Branch Chief

Richard Schwartz

Census DSD

Section Chief

Rob Cage CPI Cost Weights

 Branch Chief

John Eltinge OSMR Associate Commissioner

Vacant

PINR Division Chief

Consumer Expenditure Surveys Program Primary Interactions

Chro Muhammad

Publications

Branch Chief

Maria Reed

Census Field

Branch Chief Census Bureau

CPI

Survey Methods and Research

CE Program Managers

[CE is one of four programs in the Office of Prices and Living Conditions,

Managed by Associate Commissioner, Michael Horrigan]
Background
History of Consumer Expenditure Survey

1888-1891: 1

st BLS expenditure survey

Done sporadically until early 1940s, then about 

every ten years
1980: Continuing Consumer Expenditure Survey began

 Recognized need for a constant source of data 

on the economic condition of American consumers

 Allowed CPI to revise weights more often (initially a 

3 year cycle then the current 2 year cycle with the 

sample expansion in 2000)

 Design based largely on 1972-73 survey

History of Consumer Expenditure Survey
9

Quick facts

Years as a continuous survey 31 

Program budget in FY10 $43 million

CE staff at BLS 60 economists, statisticians, 

survey methodologists, systems 

analysts

Response rates About 75% for both surveys

Interview addresses in sample 60,000 annually

About 35,000 good interviews

Diary addresses in sample 13,000 annually

About 14,000 good weekly diaries

Interview surveys by telephone About 33%
10

Goals of the CE

 To meet the need for timely and 

detailed information about the spending 

patterns of different types of 

households.

 To provide the basis for revising the 

expenditure weights for the Consumer 

Price Index (CPI) every two years.
11

Data Collection

 The U.S. Census Bureau collects CE data for 

the BLS using two different surveys with 

separate samples:

Interview Survey (quarterly, five interviews)

Diary Survey (two weekly diaries) 

 Respondents in both surveys are asked to 

describe “all” of their spending. Business 

expenses and reimbursements are excluded.
12

Scope / Coverage

 The CE is a nationwide survey designed to 

represent the U.S. civilian noninstitutionalized

population.

 CE data is collected from consumer units 

(CUs) - people living at one address who 

share living expenses. In most cases, CUs 

are the same as households.
13

Sampling

 The CE is a designed to represent all urban and rural 

areas in the U.S.

 Sample selection begins with the definition and 

selection of geographic areas called primary sampling 

units (PSUs; currently 91 PSUs in sample).

 Sample addresses are drawn from the 2000 Census. 
14

Stakeholders

 CPI

 Bureau of Economic Analysis (BEA)

 IRS

 Defense

 Census

 Other Federal Agencies

 State governments

 Businesses

 Researchers

 General Public
 CPI:

CE/CPI Group

CE production data review by CPI staff

Regular CPI input on questionnaire content

 User surveys & Data Users’ Forum

 Microdata users’ workshop

 Census Manufacturing and Construction

 BEA meetings

 Conferences and presentations

Stakeholder Input
 CE/PCE (Personal Consumption Expenditures) 

comparisons published regularly

 Medical Expenditures Panel Survey (MEPS)

 Current Population Survey (CPS): income 

comparisons

 Residential Energy Consumption Survey 

(RECS)

http://www.bls.gov/cex/cecomparison.htm

Validation Studies
Interview & Diary Improvements

 CAPI Interview (2003)

 CAPI Diary demographics and income (2004)

 Contact History Instrument (2005, 2006)

 User Friendly diary (2005)

 Diary auto-coding system (2005)

 Biennial Interview questionnaire revisions 

(...2005, 2007, 2009, 2011, 2013)

 Timely and relevant questionnaire revisions

Medicare prescription drug program (2006)

Tax stimulus: amount and how used (2008, 2009)
Interview & Diary Improvements

Statistical methods improvements 

 Income imputation (2004)

 New methodology for selection of Diary 

or Interview data for best publication 

estimates (2007, 2009)

 Research underway for income tax 

imputation
Measurement

Objectives
Consumption vs. Expenditures

 Consumption is inherently very difficult to measure, 

although this is what many economists really want

 Consumption expenditures is a proxy to measure 

consumption and construct price indexes

 Gifts received are a part of consumption, but not 

expenditures; gifts given are a part of expenditures, 

but not consumption

CE Concepts
Consumption Expenditures:

Expenditures are the acquisition costs, as 

measured by actual financial obligation at the 

time of the acquisition, in dollar terms, for any 

payment method, for goods and services 

acquired by the consumer unit from outside the 

consumer unit, which are intended to increase 

the well-being of the consumer unit.

CE Concepts
Consumption Expenditures:

Expenditures are the acquisition costs, as 

measured by actual financial obligation at the 

time of the acquisition, in dollar terms, for any 

payment method, for goods and services 

acquired by the consumer unit from outside the 

consumer unit, which are intended to increase 

the well-being (or consumption) of the consumer 

unit.

CE Concepts
“actual financial obligation”

 No goods or services acquired via barter

 No value of home production

“at the time of acquisition”

 No flow of services approach

 Items purchased with credit cards are counted at the 

time the charge is made, not when the card is paid 

off

CE Concepts
Consumption Expenditures:

Expenditures are the acquisition costs, as 

measured by actual financial obligation at the 

time of the acquisition, in dollar terms, for any 

payment method, for goods and services 

acquired by the consumer unit from outside the 

consumer unit, which are intended to increase 

the well-being (or consumption) of the consumer 

unit.

CE Concepts
“for any payment method”

Payment methods are changing. With the 

increasing use of gift cards and automatic online payments, the CE needs to ensure we 

capture expenditures made in many ways. This 

is an area where the program engages in 

environmental scanning, to ensure we 

understand consumer behavior and effectively 

communicate the survey needs to our data 

collectors and respondents.

CE Concepts
Consumption Expenditures:

Expenditures are the acquisition costs, as 

measured by actual financial obligation at the 

time of the acquisition, in dollar terms, for any 

payment method, for goods and services 

acquired by the consumer unit from outside the 

consumer unit, which are intended to increase 

the well-being (or consumption) of the consumer 

unit.

CE Concepts
“acquired by the consumer unit from 

outside the consumer unit”

Exchanges which occur within the CU are not 

counted, e.g.

 Paying your daughter to mow the lawn

 Buying a car from your brother who lives with 

you

CE Concepts
Consumption Expenditures:

Expenditures are the acquisition costs, as 

measured by actual financial obligation at the 

time of the acquisition, in dollar terms, for any 

payment method, for goods and services 

acquired by the consumer unit from outside the 

consumer unit, which are intended to increase 

the well-being of the consumer unit.

CE Concepts
100% business expenses are excluded.

For expenditures partially for business, 

determine % business:

 Properties

 Utilities 

 Transportation

 Trips

CE Concepts
Identify the correct subsamples :

 CPI_U: urban wage earners and clerical workers, 

professional, managerial, and technical workers, selfemployed, short-term workers, the unemployed, 

retirees, and others not in the labor force (87%)

 CPI_W: hourly wage earners or clerical workers 

(32%)

 Other groups for special studies: e.g. elderly

Meeting CPI Requirements
 Cost weights for major groups of expenditures, for 

individual items within groups, and special 

aggregations (e.g. services)

 Relative shares requirement -- no partial 

interviews are allowed

 Identify month of expenditure (reference year 

boundary, C_CPI_U)

Meeting CPI Requirements
Demographic and other non-expenditure 

data:

 Workforce and earnings data to meet CPI classification 

requirements

 Other demographic data for analytic value: age, race, 

education

 Housing characteristics

 Income, assets, and liabilities are of particular interest 

to a wide variety of users

Measurement Objectives