20 Monthly Labor Review September 2006

CECE and PCE and PCE

The CE and the PCE:

a comparison

An analysis of a decline in the ratios of aggregate

spending for various categories of expenditures from the BLS

Consumer Expenditure Survey and the BEA’ s Personal

Consumption Expenditures over an 11-year period

employs a new methodology that takes into account

the degree of comparability of those categories

Thesia I. Garner,

George Janini,

William Passero,

Laura Paszkiewicz,

and

Mark Vendemia

Thesia I. Garner is a

research economist in

the Division of Price

and Index Number

Research; George

Janini is an economist

formerly in the Division

of Consumer

Expenditure Surveys;

William Passero is

team leader and an

economist in the

Division of Consumer

Expenditure Surveys;

and Laura

Paszkiewicz and Mark

Vendemia are

economists also in the

Division of Consumer

Expenditure Surveys,

all in the Bureau of

Labor Statistics. E-mail:

passero.bill@bls.gov

Since the start of the ongoing Consumer

Expenditure Survey (CE) in 1980,

expenditure estimates from CE data have

been compared regularly with corresponding

expenditure estimates from other data sources to

evaluate both the soundness of the CE estimates

at any point in time and the consistency of the

estimates over time. In 1987, Raymond Gieseman,

the first within the Bureau of Labor Statistics (the

Bureau, BLS) to use continuing survey data to

conduct this work, stated the aim of the

comparisons: “What was expected from these

comparisons was a sense of degree and direction

of possible survey errors, rather than an exact

measure of bias, because the specific estimates

from other sources are not necessarily the ‘true’

values.”1 In conjunction with other evaluation

tools, data comparisons are employed to assess

the cumulative effects of nonsampling errors on

the quality of data obtained from the CE and to

develop methodological studies to improve that

quality.2

In addition to these internal uses, data comparisons have appeared regularly in CE publications.

The major biennial releases of the CE program

include tables comparing its data estimates with

those from other sources. Articles on these

comparative measures also have been published

in the Monthly Labor Review.

3

The primary source of independent data for

comparison over the years has been the Personal Consumption Expenditures (PCE) of the

National Income and Product Accounts, produced by the Bureau of Economic Analysis (BEA);

these data are the focus of this study. The PCE

affords comprehensive coverage of item categories similar to those of the CE and, in fact, is

used as a tool in the process of producing tables

for CE publications.

Like all data sources, the CE and the PCE have

their strengths and weaknesses. The strength of the

CE is that an extensive accounting of expenditures

made by consumer units4 is collected through

personal interviews and paper-and-pencil diaries.

Separate samples of consumer units participate in

the Diary survey and the quarterly Interview survey.

A weakness is that the data are collected from

samples and thus are subject to sampling errors.

Nonsampling errors also may be introduced, in

processing the data for final use. The strength of

the PCE is that it provides estimates of aggregate

expenditures for an extensive list of commodities

purchased for consumption by and on behalf of

households. However, PCE data are subject to (1)

measurement errors in the censuses and sampling

and nonsampling errors in surveys that provide

source data to the BEA and (2) classification errors

by the BEA in its estimation and allocation of

production or output to the personal sector and

other sectors in constructing the national accounts. Each year, previously released PCE aggregate expenditure estimates are subject to revision,

which can result in meaningful differences over

time. This alone supports the proposition that
Monthly Labor Review September 2006 21

there is no “true” value for consumer expenditure estimates,

as suggested by Gieseman.5

Work by a team of researchers within the Bureau6 suggested that earlier methods comparing CE data with PCE data

needed to be reevaluated. As a part of the reevaluation, the

team kept in mind that the CE and alternative data sources

were designed to serve different purposes; thus, comparisons of estimates may be affected by differences in scope,

definition, and estimation procedure. The team attempted to

reconcile these differences as much as possible to construct

compatible estimates. The purpose of the current article is to

highlight recent work of this team. A quantitative comparison

of CE and PCE expenditure estimates is presented, followed

by a discussion of differences between the estimates and

possible reasons for them.

Outline and summary of findings

The next section highlights previous research comparing the

CE and the PCE. Following that, the foundations of the CE

and the PCE are presented, including the purposes of the two

surveys, the populations they cover, definitions of

expenditures, and data collection methods. Then the historical

comparison methodology developed and used by the CE is

described.7 Finally, ratios of CE-to-PCE aggregate expenditures from 1984 through 2002 are calculated and shown for

categories of expenditures. PCE expenditure estimates are

based on 1997 benchmark data, updated to their current levels

by periodic revisions that have occurred through 2005.

Exhibit 1 summarizes the trends in the CE-to-PCE ratios

over the 1984–2002 period at a disaggregated level. For most

categories of spending, the ratios have been decreasing.

Appendix table C-1 shows that for two categories of

expenditures—clothing for children less than 2 years of age

and purchases of vehicles—CE aggregate expenditures are

greater than PCE aggregates for earlier periods, but drop to or

below PCE estimates in later years. Overall, however, the

historical comparison methodology suggests that CE and PCE

aggregate estimates are becoming more disparate with time.

After reviewing the historical comparison methodology, the

BLS team decided that revisions were in order. Accordingly, this

article describes the development of a new comparison

methodology based on (1) knowledge gained from the results of

earlier comparisons, (2) a deeper institutional understanding of

the CE and the PCE gained from working with these data over

time, and (3) recent work presented in the economics literature.

The new methodology uses a different item classification

scheme, reallocating detailed CE data to PCE categories by major

type of product (that is, durables, nondurables, or services)

instead of by type of expenditure (for example, food, transExhibit 1. Trends in CE-to-PCE ratios, by expenditure groups, 1984–2002

Decreasing

1984–2002 ratio ≥ 0.8:

Food away from home

Rented dwellings

Telephone services

Children under 2 years

Transportation

Vehicle purchases

Utilities, fuels, and public services

1984–2002 ratio = 0.6–0.8:

Food, total

Household operations

Household furnishings and equipment

Men’s and boys’ apparel

Women’s and girls’ apparel

Televisions, radio, and sound equipment

Personal care products and services

1984–2002 ratio = 0.4–0.6:

Housekeeping supplies

Apparel and services

Maintenance and repairs

Other vehicle expenses

Entertainment

Fees and admissions

Decreasing (continued)

1984–2002 ratio = 0.4–0.6:

Pets, toys, and playground equipment

Other entertainment supplies and equipment

Reading

Tobacco products and smoking supplies

1984–2002 Ratio < 0.4:

Alcoholic beverages

Other apparel products and services

Miscellaneous

Stable

1984–2002 ratio ≥ 0.8:

Rent, utilities, and public services

Utilities, fuels, and public services

1984–2002 ratio = 0.6–0.8:

Food at home

1984–2002 ratio = 0.4–0.6:

Public transportation

Increasing

1984–2002 ratio = 0.6–0.8:

Footwear

Vehicle rental and other charges
22 Monthly Labor Review September 2006

CE and PCE

portation, or medical care). A more detailed description of the

categories of items from the CE and the PCE is utilized than was

used when the historical comparison methodology was

developed. Consequently, more comparable product categories

are constructed and are included in the final aggregates and

ratios used in the newer comparison of the two sets of estimates.

The new framework should provide more usable, accurate

comparisons for researchers examining consumption growth

and changes in the inequality of consumption over time. For

comparisons of consumption, researchers have most often

focused on nondurables or services;8 the new methodology

will facilitate this work.

Using the new methodology on data for categories that

are comparable between the CE and the PCE reveals that CE

aggregate expenditures are 86 percent of PCE aggregate

expenditures for 1992, drop to 85 percent in 1997, and fall

further to 81 percent in 2002. When all categories of items,

both comparable and noncomparable, are included, CE

aggregate expenditures are 67 percent of PCE aggregates in

1992, 65 percent in 1997, and 60 percent in 2002.

When PCE aggregates are adjusted to reflect differences

in population coverage between the CE and the PCE, the ratios

are higher. For example, the ratio for comparable categories

rises to about 88 percent for 1997 and 84 percent for 2002

when the population adjustment is made.9

Other differences between the CE and the PCE were

identified for which no adjustments can be made. For example,

because CE data are collected and coded by type of expenditure rather than by type of product, it is not always possible

to assign items directly to a major type of product.

Previous research comparing CE and PCE data

Comparisons of CE and PCE data have been conducted by

researchers both inside and outside the Bureau.10 Research

over the last 20 years has used the CE and the PCE to assess

economic growth and other economic trends.11 Other research

has focused on the quality of CE data, compared with PCE

data, as the former affects the Consumer Price Index (CPI).12 A

brief review of several studies follows.

Daniel T. Slesnick used CE data from 1960–61, 1972–73,

1980–81, and 1984–89 to compare CE consumption expenditures with PCE estimates.13 After making adjustments for

differences in definition,14 he concluded that approximately

one-half of the difference between aggregate expenditures

reported in the CE and the PCE could be accounted for by

these definitional differences. He went on to note that the

source of the remaining difference in expenditures “is a

mystery that can only be resolved by future investigation.”15

Slesnick posited reporting errors by households in the CE

and PCE estimation procedures as possible reasons for the

remaining disparity. Raymond Gieseman came to basically

the same conclusion.16 Slesnick noted, “The magnitude of

these adjustments [those made to the PCE during revisions]

suggests [that] caution is in order before one assigns full

blame for the differences in the estimated levels of aggregate

expenditure to underreporting in the CEX [Consumer

Expenditure] surveys.”17

In a report on alternative poverty measures, the General

Accounting Office cited a 1994 BEA study that compared

differences in CE and PCE estimates of expenditures for 1992.18

The BEA concluded that more than half of the difference in

aggregate expenditures was traceable to coverage and definitional differences, with the remainder due to statistical

factors.19

One source of the difference between the CE and PCE

estimates is that the PCE includes expenditures by nonprofit

institutions serving households, whereas the CE does not.20

Slesnick pointed out the necessity for removing such expenditures in comparing PCE with CE data.21 The commodity

groupings most affected are medical care, personal business,

recreation, private education and research, and religious and

welfare activities. Slesnick reported that in 1993 these

categories represented about 10.6 percent of total PCE, 12.1

percent of PCE nondurables and services, and 18.6 percent of

PCE services.22

In a study aimed at distinguishing the contributions to

total PCE of nonprofits serving households, Charles Ian Mead

reported that even more categories of expenditures are

affected.23 At the time of Mead’s original research, the amount

of PCE attributable to households and to nonprofits serving

households had not been determined by the BEA. In a later

study, Mead, Clinton P. McCully, and Marshall B. Reinsdorf

reported that about 55 percent of the expenditures for

nonprofit institutions was directed toward medical care, and

about 24 percent toward religious and welfare activities, over

the 1992–2001 period.24

Also focusing on measuring consumption over time, Jack E.

Triplett examined CE data as a way to evaluate PCE estimates.25

Unlike Slesnick, Triplett did not use unit-level CE data, but chose

published aggregates presented by Raphael Branch.26 In

discussing strengths and weaknesses of the two sources of

data, Triplett stated that the input-output methodology employed to produce the PCE is qualitatively better at higher levels

of aggregation than at lower ones: “The finer the level of detail,

the more likely that the long chain of computation necessary to

reach the PCE’s indirect estimate of consumer spending will have

cumulative errors that affect the totals.”27 Triplett went on to

say, “The individual components of PCE and CE have been

studied too little to permit conclusions about which is better and

what can be learned from comparing the two.”28

In contrast, in comparing the CE and the PCE in regard

to which would be the better primary source of data for

weights for the CPI, David Lebow and Jeremy Rudd con-
Monthly Labor Review September 2006 23

cluded, “Neither measure of weights is perfect, but we see

advantages to the PCE data on balance.”29 They emphasized

the advantage of the PCE in that its data are derived primarily

from businesses’ responses to economic censuses. However,

they also stated, “The main difficulty with the PCE data in

this context lies in the need to subtract the purchases of

businesses and governments from total expenditure data in

order to obtain spending by households and non-profit

institutions.”30 Lebow and Rudd stated that a disadvantage

of the CE is that its data rely largely on respondents’ memories

of their own expenditures, as well as of those of others in

their consumer unit.

A National Research Council panel that examined whether

the CE or the PCE would serve as the better basis of the

weights in the CPI was not consistent in its evaluation of the

CE:

On the basis of available evidence, it is unclear whether the

PCE or CEX weights are superior. What is clear, though, is that

for some components the two systems produce very

different results. The major hurdle inhibiting comparison

among indexes weighted using alternative source data is the

lack of uniformity in the scope and definition of goods and

services covered. It is an open question as to how accurately

expenditure categories can be mapped from the PCE to the

CEX. We are not in a position to advocate one set of weights

over the other, but the question certainly warrants further

investigation....31

Yet later, “The panel concluded that it is likely that the CEX

estimates of consumer expenditure shares are biased, perhaps

seriously.”32 The panel recommended that the CE be carefully

evaluated and that the net advantages of using the PCE to

produce upper-level weights for the CPI be included in the

evaluation (Recommendation 9-1).33 No direct evaluation of

the PCE was recommended. In Recommendation 9-2, the panel

recommended that a program be set up to produce an

experimental CPI based on PCE weights if the categories in

the CE and PCE can be reasonably matched so that comparable item strata indexes can be created.34

Other users familiar with the CE and the PCE also have

raised concerns about the increasing spread between aggregate expenditures reported in the CE and the corresponding

PCE estimates.35 Drawing on all these discussions and other

informal contacts with users concerned with this issue, the

Bureau has worked to produce the best comparisons of CE

and PCE aggregate expenditures possible.36

Basic concepts and methods

The CE and the PCE are designed to represent a similar

concept of total consumption expenditures; however, they

follow different paths to obtain their estimates.37 Simply put,

the Bureau of Labor Statistics collects CE expenditure data

through sample surveys and weights the results to obtain

population estimates. The Bureau of Economic Analysis, in

contrast, calculates PCE estimates on the basis of industry

production data collected in economic censuses and through

surveys conducted by outside agencies. There are clear

differences in the types of expenditure data obtained, dictated

by the data collection methods and data sources used by the

two Agencies. In addition, the populations covered by the

CE and the PCE differ.

The CE program covers consumer-unit purchases of goods

and services used in day-to-day living. Data for the CE are

reported directly by consumers through two components—

the Diary Survey and the quarterly Interview Survey—

administered by the Census Bureau. Respondents are

instructed to report the out-of-pocket expenditures, including

all excise and sales taxes, of all members of the consumer

unit. A sample of consumer units separate and independent

from the sample participating in the quarterly Interview

component of the CE participates in the Diary component.

The Diary Survey is intended to capture everyday

purchases, such as groceries, and lower cost items, such as

laundry detergent. Respondents to the Diary component list

all expenditures made for two consecutive 1-week periods.

The Interview Survey is designed to collect expenditures

on major items of expense, such as property or vehicles, and

on those items for which outlays occur on a regular basis,

such as rent or utilities. Respondents are encouraged to use

records in reporting expenditures, but also can use recall to

report expenditures over the 3-month reference period of each

interview. For the Interview Survey, respondents report data

to an interviewer once per quarter for four consecutive

quarters.

Once received, the data are processed and then released

by the Bureau of Labor Statistics. Processing includes imputations and allocations as necessary.38 Although certain

items are collected uniquely in either the Diary or Interview

Survey instrument, there is considerable overlap, in general,

in the coverage of items. Thus, in a procedure known as

integration, the Bureau chooses the Diary or the Interview as

the most statistically reliable source for each expenditure item

for both CE publications and data comparisons.

The BEA defines the PCE essentially as expenditures made

directly by households and, unlike the CE, excludes personto-person transactions and includes expenditures made on

behalf of households by nonprofit institutions. In contrast

to the CE, the PCE also includes expenditures financed under

government programs, such as Medicare and Medicaid. The

PCE defines owner-occupied-housing expenditures as a

service flow and imputes space rent to represent the value of

that flow. (In contrast, the CE uses expenditure outlays, not

including reductions in principal.) As with the CE estimates,

The PCE estimates include all excise and sales taxes.
24 Monthly Labor Review September 2006

CE and PCE

Data for the PCE are gathered from numerous surveys and

censuses. For benchmark years, the major source of data the

BEA uses is the comprehensive Economic Census, conducted

by the Census Bureau every 5 years. (The most recent one

was completed in 2002.) Between benchmark years, the BEA

uses data from the Annual Survey of Manufactures, the Annual Wholesale Trade Survey, the Service Annual Surveys,

the Annual Wholesale Trade Survey, and the Annual Retail

Trade Survey. These data are collected at a higher level of

aggregation than data from the Economic Census. To arrive

at a final purchasers’ value for each item, the BEA obtains the

basic value of shipments for durables and nondurables, the

value of receipts received for services, and data for calculating

wholesale and retail trade margins, taxes, and transportation

costs.

The total purchasers’ value for each item is apportioned

among the various users of that item, such as government,

exporters, and industry (the last as an input for the items it

produces). The portion allocated to the household sector as

PCE frequently is derived as a residual after other users

receive their allocations.

For PCE estimates, the operating expenses of nonprofit

institutions serve as a proxy for the value of services provided

to consumers. The BEA calculates the operating expenses of a

nonprofit institution as the total expenses of that institution,

less receipts from the sales of goods and services considered

secondary to the nonprofit’s main line of business. These

receipts are assigned to a PCE category under which they are

considered primary. For example, cafeteria receipts at a

nonprofit hospital are moved from healthcare to food as

purchased meals and beverages. This approach decreases

the amount of PCE that is directly attributed to nonprofit

institutions.

The data sources and methodologies the BEA employs

differ slightly between benchmark years (years ending in “2”

or “7”) and nonbenchmark years (years between the benchmark years). Benchmark years coincide with the economic

censuses conducted by the Census Bureau. Expenditures are

available at a detailed item level for use in the benchmark PCE

estimates. The annual survey data from the nonbenchmark

years are not collected in such detail, so the BEA must

extrapolate from those data to estimate PCE.

The populations covered by the CE and the PCE are defined

somewhat differently. The CE collects data from consumer

units representing the civilian noninstitutional population

residing in the continental United States, Alaska, and Hawaii

and not on military bases.

The PCE covers all “persons resident” in the United States

and the nonprofit institutions that serve them. “Persons resident”

include persons who are physically located in the United States,

persons who are employees of U.S. businesses and who are

working abroad for 1 year or less, and persons who are U.S.

Government civilian or military personnel stationed abroad,

regardless of the duration of their assignments.39

These basic methodological differences between the CE

and the PCE explain some of the disparities between the CE

and PCE aggregates. To see more clearly the magnitude of the

differences between the estimates, the Bureau developed

techniques for producing comparisons.

Historical comparison methodology

Development of methodology. CE estimates and PCE estimates

have been compared since the early 1980s. This section

summarizes the process by which the comparisons have been

carried out historically.40

In the past, the first step was to select item categories for

comparison. The initial framework on which to produce

matching CE-to-PCE estimates came from the item categories

in the reference tables of CE bulletins and reports published

since August 1989.41

It was not possible to create conceptually similar CE-toPCE categories in every case. In some cases, adjustments

were made to published CE categories in order to produce

categories comparable to PCE categories. This approach

required using CE data at the level at which expenditures are

defined for CE and CPI purposes. Expenditure items at this

level are designated by Universal Classification Codes, or

UCC’s. Thus, UCC’s representing the value of vehicles

disposed of and trade-in allowances for new and used

vehicles, neither of which category is included in estimates

of vehicle purchases in published CE tables, were combined

with net payments for vehicles in order to derive an estimate

for vehicle purchases similar to PCE estimates. In other

instances, it was necessary to combine expenditure item

categories to achieve comparability. For example, rent,

utilities, and public services were combined because the CE

does not extract utility charges that are included in contract

rent.

Irreconcilable conceptual differences prevented a

matching of categories such as owner-occupied shelter,

healthcare, education, cash contributions, and personal

insurance and pensions in accordance with publication

definitions. In CE publications, owner-occupied shelter

expenditures are defined to include mortgage interest and

charges, property taxes, maintenance and repairs, insurance,

and other related costs. In contrast, the BEA defines the value

of owner-occupied shelter for PCE as space rent, which

excludes charges for utilities, major appliances, furniture, and

furnishings.

In its estimates, the PCE includes expenditures made for

healthcare and education by nonprofit institutions serving

households. These expenditures are considered out of the

scope of the CE. In addition, healthcare expenditures in the
Monthly Labor Review September 2006 25

PCE include third-party payments by insurance companies

and others, whereas the CE includes only out-of-pocket

payments by consumers. Cash contributions to nonprofit

organizations do not appear as a category in the PCE, but

rather are subsumed under the religious and welfare activities

category. Because most religious and welfare activities are

carried out by nonprofit institutions serving households, the

PCE consists of expenditures made by these institutions.

Personal insurance and pension expenditures also are not

included in the comparison, due to definitional differences.

In CE published estimates, such expenditures consist of

premiums paid on life and other personal insurance policies

and contributions made to pension plans by consumer units.

The PCE includes only expenses incurred for handling life

insurance and pension plans.

With comparable CE-to-PCE item categories identified, CE

and PCE expenditure data historically were processed and

formatted to calculate annual aggregate estimates and CE-toPCE ratios of expenditures by type of expenditure. For each

year’s CE-to-PCE comparison, the CE estimates were

computed with data from the same source (the Diary or

Interview component) selected for that item in published

tables for that year, and the aggregates were generated in the

same way as the published annualized estimates.42

Estimates of PCE aggregate expenditures were generated

by the BEA and published in tables, organized by type of

product and type of expenditure, in the Survey of Current

Business. Each year, the BEA supplies the Bureau of Labor

Statistics with a table of annual expenditure estimates. The

level of precision in the PCE estimates was adjusted to match

that in the CE estimates.

For those CE and PCE expenditure categories deemed

conceptually comparable, a concordance was established

that identified which detailed CE and PCE items should have

been included in each category. Annual aggregate estimates

for these items were summed to create annual aggregates for

the comparable categories in the CE and the PCE. Then, CEto-PCE ratios were calculated from the aggregates of the

comparable categories.

Trends in historical CE and PCE estimates. In the years

since the historical comparison method was introduced to

produce comparable aggregate expenditure estimates, certain

trends have appeared in the ratios of CE estimates to PCE

estimates. The following tabulation presents averages of

aggregate expenditure ratios for a subset of major expenditure

categories for two periods:

 Category 1984–91 1992–2002

Total food .................................... 0.77 0.73

Rent, utilities, and other related

 goods and services.................... .91 .88

Household operations ................. .87 .73

Apparel and services................... .65 .54

Transportation ............................ .89 .79

Entertainment .............................. .64 .54

Personal care ............................... .67 .60

Miscellaneous .......................... .29 .20

Note that the first period begins with 1984, the first year for

which CE-to-PCE data comparisons historically were

generated, and runs to 1991. The second begins with 1992

and ends with 2002, both benchmark years for the PCE. PCE

estimates reflect revisions made to the earlier years’

aggregates through February 2005.

At the level of aggregation represented in the preceding

tabulation, the ratios indicate that the CE aggregates are lower

than the PCE aggregates and the disparity between them

has increased between the two periods shown. The CE

survey and the PCE produce the closest aggregates for (1)

rent, utilities, and other related goods and services and (2)

transportation. By contrast, PCE aggregate miscellaneous

expenditures are substantially larger than CE estimates,

resulting in quite low ratios of 0.29 and 0.20, respectively, for

the two periods. The decline in the ratios has been relatively

steady across the years for most major categories. More

detailed results reveal trends for item groups within categories, and these trends help identify areas most responsible

for the decline. (See appendix table C-1.)

The ratios presented in the preceding tabulation and in

appendix table C-1 may differ from aggregate expenditure

ratios published earlier for the same year. Although CE

aggregates for a particular year change occasionally due to

previously undiscovered errors in the data, it is more likely

that the trend line in the aggregates exhibits spikes or disjoint

shifts over time. These aberrations coincide with changes in

sample design, data collection methods, and data processing

in the CE. In contrast, changes in PCE aggregates are

retrospective. When a new year’s PCE aggregates are produced,

the aggregates for previous years often are revised, due either

to updated source data that the BEA has received in the interim

or to the culmination of the benchmarking process.

A summary of trends in the ratios presented is presented in

exhibit 1. A ratio is defined as stable if the difference between the

average ratio for 1992–2002 is within 3 percentage points of the

1984–91 ratio. If the 1992–2002 ratio is 4 or more percentage

points lower than the 1984–91 ratio, then the ratio is defined as

decreasing. The subheadings in the exhibit denote the relative

magnitudes of the ratios. Only two expenditure categories had

increasing ratios, and just four had stable ratios.

Revised comparison methodology

Examination of historical trends. As the ratios and trends

suggest, gaps between aggregate expenditures in the CE and
26 Monthly Labor Review September 2006

CE and PCE

the PCE are widening for most expenditure groups, making

the study of the underlying reasons more pressing. Although

some of the reasons for the gaps, such as differences in

definition, coverage, and methodology, had been recognized

and documented in the past when comparative estimates were

presented, a more formal, comprehensive examination has

never been conducted. For this reason, a team of researchers

was formed to conduct an investigation into the matter and

extend it to comparisons of the CE and other data sources.

Among the objectives of this team were the following:

• addressing inquiries about differences in estimates

between the CE and other sources,

• assessing the efficacy of the historical CE collection

methodology, and

• suggesting possible revisions to improve the quality

of CE data.

A summary of points made earlier concerning the methodology and concepts involved in obtaining the CE and PCE

estimates is useful to review before examining possible reasons for differences in the estimates. The CE and the PCE

each provide a measure of consumer expenditures, but these

measures are derived from different types of data. The PCE is

defined in terms of sales or the output of production, while

the CE is based on purchases. Another important distinction

between the two measures is that the PCE includes the

expenditures of nonprofit institutions in defining their output.

In theory, if (1) all sales and purchases are recorded accurately,

(2) expenditures of nonprofit organizations are excluded from

the PCE, and (3) the respective populations are adjusted to be

the same, the CE and PCE estimates should be similar, if not

the same, for the majority of items in the survey. In practice,

however, these estimates are disparate.

Three major reasons for differences between CE and PCE

estimates are the methodology of the two surveys, their scope

(in terms of both whose expenditures are being measured and

how expenditures are defined), and the definitions they

employ. Aside from including the expenditures of nonprofit

institutions, the PCE covers military personnel and others

whose expenditures are ignored by the CE. In addition, certain

expenditure categories were out of the scope of the PCE in

previous comparisons because the BEA used the CE survey

as the primary source for the PCE estimates. For example, the

BEA used or still uses CE data, directly or through extrapolation, on motor vehicle leasing (cars and trucks), motor vehicle

rental, taxis, nursery schools, and childcare.43 The BEA also

used CE estimates for medical and hospitalization insurance

premiums in the PCE. Beginning with the 2000 annual revision

of the PCE, however, the BEA adopted the Medical Expenditure

Panel Survey (MEPS) as the primary data source for the

medical care and hospitalization insurance component of the

PCE.

44

Methodological reasons for differences. The methodologies

designed to produce CE and PCE estimates are dissimilar and

account for some of the difference between the estimates.

The BEA starts with a basic initial dollar value for each item.

This dollar value consists of the value of manufacturers’

shipments of goods or the value of receipts received by

service providers. The data are obtained from various economic censuses and surveys. Data from these sources can

suffer from reporting errors and, in the case of surveys,

sampling errors. Using its expert judgment, the BEA staff

makes adjustments for what it considers to be misreporting

errors.

Wholesale and retail trade margins can account for a large

proportion of the final purchasers’ value of an item assigned

to the PCE. The algorithm by which these margins are

calculated can be summarized simply as total receipts from

sales by wholesalers and retailers, less total costs of

acquisition, adjusted by changes in the value of unsold

inventories held. Because data limitations do not permit the

production of trade margins at the item level, the BEA carries

out an iterative series of adjustments and reallocations to

obtain a reasonable estimate for wholesale and retail trade

margins across items.

Commodity, wholesale, and retail taxes, which take the form

of sales taxes, also are incorporated into the purchasers’

value. On the basis of data from trade surveys, Census

Bureau analysts determine sales tax rates,which the BEA then

applies to sales receipts at the wholesale and retail levels.

Next, total taxes are distributed among expenditure categories.

The surveys that provide the data for deriving tax rates are

subject to sampling and reporting errors, so adjustments

similar to those made in the allocation of trade margins to

expenditure categories also are applied to taxes.

The process of moving products from producer to

wholesaler to retailer imposes transportation costs that

increase the final purchasers’ value. Data on air transit costs

come from the Department of Transportation. The Census

Bureau conducted the 1997 Commodity Flow Survey, which

serves as the source for shipping charges by truck. The nowdefunct Interstate Commerce Commission previously

provided data on freight costs charged by railroads. These

data are currently compiled by the American Association of

Railroads.

After obtaining a final purchasers’ value for an expenditure

item, the BEA allocates that value to end users of the item,

such as domestic industries, government, exporters, and

consumers (PCE). Some allocations of the final purchasers’

value are made directly to an end user on the basis of source

data the BEA has, but in many cases, BEA staff draws on its past

experience and expertise to determine these allocations. Often,

the portion of an item’s output allocated to PCE is the residual

value left after allocations have been made to all other users.
Monthly Labor Review September 2006 27

In contrast to the methods used to arrive at PCE estimates,

the CE estimates are derived from expenditure information

provided directly by consumers through the Diary and Interview

Surveys. Again, these surveys are subject to reporting and

sampling errors that can affect expenditure estimates. Moreover,

collecting data on family spending behavior through personal

interviews and recordkeeping raises particular issues that can

affect estimates of spending. The expenditures of some

consumer items, such as alcoholic beverages and tobacco

products, are likely underreported by respondents because of

the sensitive nature of those items.

Proxy reporting is another reason for under- or misreporting. For example, in a comparison of CE health insurance

premium data with MEPS health insurance data, the CE

estimates for family policies were lower.45 Further analysis

pointed to employer-sponsored policies as the locus of the

difference in estimates. The insurance component of MEPS

(MEPS-IC) provides data on premiums for employer-sponsored coverage. The MEPS-IC is an establishment survey

rather than a household survey, and the collection unit is an

enrollee rather than a policy as in the CE survey. Operationally,

the CE selects one respondent who reports for all members of

the consumer unit and, as such, might not have perfect

knowledge of the paying arrangements and out-of-pocket

premium amounts for policies held by other members of the

unit. For example, some respondents may have claimed that

policy premiums were paid entirely by an employer or a union

when, in reality, another member of the consumer unit actually

paid some or all of the policy premiums.

Some of the questions in the CE Interview and Diary

Surveys could be too global in nature to capture all expenditures or the correct expenditures in the intended category.

For instance, expenditures for the use of automatic teller

machines of financial institutions would be captured in the

Interview survey through questions that ask, “Do you (or

any members of your [consumer unit]) have any expenses for

checking accounts or other bank services?” Because of the

global nature of this question, respondents may not record

expenses for automatic teller machines or may not record all

expenditures related to the use of such machines.

Trends in the relationship between CE and PCE estimates

also can be affected by periodic changes made to the

Interview and Diary Survey instruments. Revised procedures

applied in the processing of data collected in the instruments

also may have an impact. The influence of these changes on

estimates for specific categories is an area for further work.

Scope-related reasons for differences. Although the

scopes of the CE and the PCE largely coincide in terms of

transactions covered and expenditure items included, there

are some notable instances in which they differ, with a

resulting impact on the CE and PCE estimates.

In addition to the earlier noted population differences

between the two surveys, the following expenditures are

components of the PCE, but are outside the scope of the CE:

the value of home production by persons living on farms for

their own consumption; standard clothing issued to military

personnel; and services, except life insurance services,

furnished without payment by financial intermediaries. Also

captured in the PCE, but not included in CE estimates, are

expenditures made by third-party payers on behalf of the

consumer, such as employer-paid benefits and insurance

reimbursements. The Interview instrument does collect some

reimbursement data for items such as expneditures on auto

repairs and on medical care, but not on a systematic basis,

because its emphasis is on respondents providing data on

direct out-of-pocket spending.

The CE collects expenditure data on transactions between

consumer units that can be significant for some categories,

such as purchases of used vehicles. The PCE explicitly

excludes these transactions in the derivation of its estimates.

Also, allocations or payments into Social Security are

included in the CE published estimates, but not in PCE

estimates.

Definitional reasons for differences. The CE and the PCE

define some expenditure categories differently, leading to

differences between the CE and PCE estimates. For example,

the CE defines education expenses as out-of-pocket

expenditures, whereas the PCE estimates the operating expenses

of private educational institutions as part of its estimate of

education expenditures by households. Also, for publication

purposes, the CE defines expenditures for owner-occupied

housing to include spending for mortgage interest and charges,

property taxes, maintenance and repairs, and other expenses;

the PCE imputes space rent to estimate expenditures for owneroccupied dwellings. Finally, the CE defines retirement and

pension expenditures as out-of-pocket contributions by the

consumer unit to pension plans; the PCE estimates such

expenditures from the administrative expenses incurred by

sponsors managing pension plans.

Development of revised methodology. To understand better

the differences between the CE and the PCE, the team decided

to revamp the historical methodology used in earlier analytical

work (for example, that of Raphael Branch)46 by regrouping

the CE items into PCE detailed categories. The categories are

based on the framework of the 1992 Bridge table47 and

incorporate the item detail from the 1997 input-output data

used in producing the PCE for the National Income and

Product Accounts.48 The Bridge table provides the most

detailed information available regarding what is included in

each PCE category. The CE items are represented by UCC’s. In

many instances, there is no perfect match between the CE
28 Monthly Labor Review September 2006

CE and PCE

and PCE items assigned to a particular aggregate category,

even when concepts are generally the same. These situations

are discussed in the next subsection, in which each group is

reviewed.49

The CE and the PCE are compared with respect to the

following major classifications: durable goods, nondurable

goods, and services. Within each of these classifications,

expenditure aggregates are presented for subgroups. First,

aggregate expenditures for both the CE and the PCE are

presented, regardless of comparability of the category. Then,

only those aggregates from categories with items deemed most

comparable by the team are examined. Next, brief analyses explain

why differences arise between the CE and PCE estimates,

especially when they may be due to noncomparability of the CE

and PCE component items. As will be seen, many fewer item

categories are considered comparable than in past comparisons.

The comparison of aggregate expenditures for 1997, the most

recent benchmark year for which PCE estimates are available, is

presented here. The comparison for 2002, the latest benchmark

year, but not based on 2002 benchmark PCE estimates, is

displayed in appendix table D-1.

All UCC’s that nominally fit into the PCE framework are

included in the initial analysis of comparable and noncomparable categories. In some cases, such as healthcare,

the category is within the scope of both the CE and the PCE,

but the operational definitions are sufficiently different to

result in estimates that are not comparable. For example, as

noted earlier, the full costs of healthcare are included in the

PCE, but only the expenditures made by consumer units, net

of reported reimbursements, are included in the CE definition.

Differences in scope and definition affect the comparability of estimates for purchases of used cars. The PCE

includes (1) the retail trade margin for purchases by

households from intermediaries, such as car dealers, for cars

traded in by other households, (2) net purchases by households for cars originally in the business sector, such as

company cars previously rented or leased, and (3) a value for

scrap metal—representing used cars scrapped by households—which is deducted from purchases. The CE, by

contrast, does not have estimates either for the retail trade

margin from the first type of transaction or for the value of

scrap metal. It does collect the transaction price of used-car

purchases and thus covers business-to-household transactions, although it does not specifically identify such

transactions. Direct household-to-household sales are

included in the CE survey, but are out of the scope of the PCE,

as mentioned earlier. Thus, used-car comparisons produced

with the earlier methodology were very rough proxies and are

now deemed not comparable.

Evaluation of revised comparisons. As seen in table 1, which

presents CE and PCE aggregate expenditures for all item

groupings (comparable and not comparable) for 1997, the ratio

of CE-to-PCE estimates for total goods and services is 0.65. CE

aggregate durable goods expenditures are 81 percent of those

for the PCE. CE nondurable goods spending equals 63 percent

of the PCE value, while the CE-to-PCE ratio for service

expenditures is 0.62. These ratios are not adjusted to account for

the differences in the populations represented by the CE and the

PCE. Recall that PCE expenditures represent those made by a

larger population than the CE population. For most categories

that are deemed comparable in definition and scope and that are

adjusted for population differences, the CE and the PCE produce

estimates that tend to be reasonably close to each other. For

categories that differ in concept or vary in composition beyond

that for which adjustments can be made, aggregate expenditures

are more disparate—substantially in some cases.

1. Durable Goods. The item category of durable goods

consists of motor vehicles and parts, furniture and household

equipment, and other durable goods. Among the comparable

durable-goods groups, estimates of expenditures for new

automobiles and for kitchen and other household appliances

were similar.

CE aggregate expenditures for motor vehicles and parts

are higher than those calculated for the PCE. (The ratio is

1.04.) For the comparable category of new automobiles, the

CE-to-PCE ratio is 1.03. The impact of the scope and definitional differences noted earlier on expenditures for used autos

is reflected in much higher CE aggregate expenditures, compared with PCE estimates. (The CE-to-PCE ratio is 1.57.)

Within the component of other motor vehicles in both the

CE and the PCE are trucks (new and used) and recreational

vehicles. Like purchases of automobiles, purchases of trucks

are distinguished between new and used; thus, as regards

CE-to-PCE comparisons, the used-truck portion is subject to

the same comparability issues as is the category of used

cars. In the PCE, trucks also include truck tractors and bus

chassis. While expenditures on these items are not likely to

be reported by consumer units in the CE, they probably are

small in the PCE. Estimates of expenditures for recreational

vehicles for the CE and PCE are very close, although the

category is not considered comparable because of the

differential treatment of used vehicles.

The category “tires, tubes, accessories, and other parts”

is composed chiefly of the same items in both surveys;

however, there are significant differences in the estimates,

probably because the CE estimate consists of expenditures

net of reimbursements for insurance and warranty coverage,

while the PCE retains the full cost for these items, regardless

of the payer. CE estimates for specific items in this category

may be higher than those derived for the PCE, because, in

some cases, the CE instrument allows the respondent to

include in the expenditure report labor charges associated
Monthly Labor Review September 2006 29

Table 1. Comparison of 1997 aggregate Consumer Expenditures with Personal Consumption Expenditures based on

 1997 PCE benchmark

[In millions of dollars]

Raw aggregates

PCE CE Ratio

Total durables, nondurables, and services ...................................... $5,544,512 $3,589,914 0.65

Durable goods .............................................................................................................. 689,767 561,031 .81

Motor vehicles and parts ......................................................................................... 302,228 315,177 1.04

New autos ............................................................................................................. 82,326 84,636 1.03

Net purchases of used autos ............................................................................... 54,166 84,917 1.57

Other motor vehicles ............................................................................................ 123,810 129,980 1.05

Trucks, new and net used ................................................................................. 114,566 121,129 1.06

Recreational vehicles ........................................................................................ 9,244 8,851 .96

Tires, tubes, accessories, and other parts ......................................................... 41,926 15,644 .37

Furniture and household equipment ......................................................................... 256,165 174,753 .68

Furniture, including mattresses and bedsprings .................................................. 56,467 42,012 .74

Kitchen and other household appliances ............................................................. 26,383 28,391 1.08

China, glassware, tableware, and utensils ........................................................... 25,464 6,966 .27

Video and audio goods, including musical instruments, and computer goods .... 92,340 50,427 .55

Video and audio goods, including musical instruments .................................... 58,871 30,644 .52

Computers, peripherals, and software .............................................................. 33,469 19,783 .59

 Other durable house furnishings (for example, floor coverings, clocks, lamps,

and furnishings; blinds, rods, and other; writing equipment,

handtools, tools, hardware, and supplies) ......................................................... 55,511 46,897 .84

 Other durable goods ................................................................................................ 131,374 71,161 .54

Ophthalmic products and orthopedic appliances ................................................. 18,621 7,789 .42

Wheel goods (including bicycles and motorcycles), sports (also includes

guns) and photographic equipment, boats, and pleasure aircraft ..................... 44,783 33,842 .76

Jewelry and watches ............................................................................................. 40,944 18,086 .44

Books and maps ................................................................................................... 27,026 11,444 .42

Nondurable goods ........................................................................................................ 1,618,967 1,026,129 .63

Food .......................................................................................................................... 796,201 559,008 .70

Food purchased for off-premise consumption ..................................................... 492,521 337,499 .69

Alcoholic beverages purchased for off-premise consumption ............................ 61,162 18,972 .31

Purchased meals and beverages ......................................................................... 294,942 218,288 .74

Alcoholic beverages in purchased meals ............................................................ 32,170 13,604 .42

Food supplied to employees: civilians ................................................................. 7,688 3,221 .42

Food supplied to employees: military ................................................................... 523 (

2

) ...

Food produced and consumed on farms .............................................................. 527 (

2

) ...

Clothing and shoes .................................................................................................. 258,085 157,359 .61

Shoes .................................................................................................................... 40,732 33,126 .81

Women’s and children’s (girls’ and infants’) clothing and accessories,

 except shoes ..................................................................................................... 127,456 79,788 .63

Men’s and boys’ clothing and accessories, except shoes .................................. 80,594 42,883 .53

Standard clothing issued to military personnel .................................................... 315 (

2

) ...

Sewing goods for males and females .................................................................. 5,000 936 .19

Luggage for males and females ........................................................................... 3,988 1,026 .26

Gasoline, fuel oil, and other energy goods ............................................................. 147,739 127,847 .87

Other nondurable goods .......................................................................................... 416,942 181,515 .44

Tobacco products ................................................................................................. 53,848 27,565 .51

Toilet articles and preparations ............................................................................ 51,624 25,749 .50

Semidurable house furnishings ............................................................................ 31,400 9,069 .29

Cleaning and polishing preparations, and miscellaneous household

supplies and paper products .............................................................................. 53,854 34,339 .64

Drug preparations and sundries ........................................................................... 111,140 37,231 .33

Nondurable toys and sport supplies .................................................................... 48,399 17,568 .36

Stationery and writing supplies ............................................................................ 16,856 12,985 .77

Net foreign remittances ........................................................................................ 2,958 (

2

) ...

Magazines, newspapers, and sheet music .......................................................... 31,153 10,881 .35

Flowers, seeds, and potted plants ....................................................................... 15,710 6,128 .39

Services ....................................................................................................................... 3,235,778 2,002,754 .62

Housing and household operations ......................................................................... 1,179,605 1,286,839 1.09

Owner-occupied dwellings .................................................................................... 597,957 751,763 1.26

Rent and utilities, excluding telephone ................................................................ 374,363 366,184 .98

Tenant-occupied nonfarm dwellings .................................................................. 198,957 208,293 1.05

See notes at end of table.

1

1

1

1

1

1

1

1

1

1

1

1

1

PCE categories

1

1

1

1

1
30 Monthly Labor Review September 2006

CE and PCE

 Electricity .......................................................................................................... $94,516 $95,934 1.02

 Gas .................................................................................................................... 36,832 31,774 .86

Water and other sanitary services .................................................................... 44,058 30,183 .69

 Other lodging ........................................................................................................ 45,699 30,842 .67

 Telephone and telegraph ..................................................................................... 103,648 85,416 .82

 Domestic service .................................................................................................. 14,688 7,954 .54

 Other household operations (for example, moving and storage, household

 insurance, rug and furniture cleaning, electrical repair, reupholstery and

 furniture repair, postage, household operation services not elsewhere

 classified) .......................................................................................................... 43,250 44,680 1.03

Transportation ........................................................................................................... 245,666 225,711 .92

Repair, greasing, washing, parking storage, rental, and leasing ......................... 152,867 101,934 .67

Bridge, tunnel, ferry tolls ...................................................................................... 4,367 1,846 .42

Insurance ............................................................................................................... 37,807 79,709 2.11

Mass transit systems ............................................................................................ 7,839 7,650 .98

Taxicab ................................................................................................................... 3,258 2,169 .67

Railway ................................................................................................................... 420 2,237 5.33

Bus ......................................................................................................................... 2,223 1,110 .50

Airline ..................................................................................................................... 29,836 26,269 .88

Other (including water passenger; passenger transportation arrangement;

limousine service; other local transportation; part of Amtrak passenger,

trucking, and courier services, except air) ....................................................... 7,049 2,787 .40

Medical care .............................................................................................................. 873,033 149,348 .17

Physicians ............................................................................................................. 198,242 14,104 .07

Dentists ................................................................................................................. 50,931 21,491 .42

Other professional services .................................................................................. 141,981 10,097 .07

Hospitals ................................................................................................................ 338,516 9,232 .03

Nursing homes ....................................................................................................... 78,251 1,382 .02

Health insurance....................................................................................................

 Medical care and hospitalization health insurance .......................................... 50,569 93,042 1.84

 income loss insurance ...................................................................................... 1,172 (

3

) ...

 Workers’ compensation ..................................................................................... 13,371 (

3

) ...

......................

Recreation ................................................................................................................. 215,065 110,190 .51

Admissions to all events ....................................................................................... 24,984 18,595 .74

 Motion picture theaters, theatre, opera, and entertainment ............................ 15,783 13,582 .86

 Spectator sports ............................................................................................... 9,201 5,013 .54

Radio and television repair .................................................................................... 3,900 775 .20

Clubs and fraternal organizations ......................................................................... 16,299 7,931 .49

Commercial participant amusements .................................................................... 59,423 17,987 .30

Parimutuel net receipts ......................................................................................... 4,018 5,616 1.40

Other (including pets and pet services, excluding vets; veterinarians; cable

TV; film developing; photo studios; sporting and recreational camps; high

school recreation; lotteries; videocassette rental; commercial amusements

not elsewhere classified) ................................................................................... 106,441 59,286 .56

Personal care ............................................................................................................ 69,650 39,079 .56

Cleaning, storage, and repair of clothing and shoes ........................................... 13,646 7,966 .58

Barbershops, beauty parlors, and health clubs ................................................... 31,247 30,147 .96

Other (including watch, clock, and jewelry repair; miscellaneous

 personal services) ............................................................................................. 24,757 965 .04

Personal business .................................................................................................... 412,926 36,080 .09

Brokerage charges and investment counseling ................................................... 60,841 (

2

) ...

Bank service charges, trust services, and safe deposit box rental .................... 43,711 3,715 .08

Services furnished without payment by financial intermediaries except life

 insurance carriers ............................................................................................. 133,056 (

2

) ...

Expense of handling life insurance and pension plans ........................................ 81,880 (

2

) ...

Legal services ....................................................................................................... 53,748 14,336 .27

Funeral and burial expenses ................................................................................. 13,001 8,731 .67

Other personal business (including labor union expenses, professional

 association expenses, employment agency expenses, money orders,

 classified ads, tax return preparation services, personal business

 services not elsewhere classified) ................................................................... 26,689 9,298 .35

Table 1. Continued—Comparison of 1997 aggregate Consumer Expenditures with Personal Consumption Expenditures

 based on 1997 PCE benchmark

[In millions of dollars]

PCE CE Ratio

See notes at end of table.

1

1

1

1

1

PCE categories

Raw aggregates

1

1

1
Monthly Labor Review September 2006 31

Education and research ........................................................................................ $129,682 $65,829 0.51

Higher education ................................................................................................ 69,834 37,324 .53

Nursery, elementary, and secondary schools ................................................... 29,411 26,472 .90

Elementary and secondary schools ............................................................... 22,850 9,517 .42

Nursery schools .............................................................................................. 6,561 16,955 2.58

Other education and research ........................................................................... 30,437 2,033 .07

Commercial and vocational schools ............................................................... 20,203 (3

) ...

Foundations and nonprofit research ............................................................... 10,234 (

2

) ...

Religious and welfare activities ............................................................................ 134,234 89,678 .67

All contributions, including religion (not a PCE category) .................................. 78,857

Political organizations ........................................................................................ 579 (3

) ...

Museums and libraries ........................................................................................ 6,204 (

3

) ...

Foundations to religion and welfare ................................................................... 6,596 (3

) ...

Social welfare ..................................................................................................... 80,632 10,821 .13

Childcare .......................................................................................................... 19,682 7,576 .38

Social welfare (including membership organizations, job training and

vocational rehabilitation services, residential care, individual and family

services, social services not elsewhere classified, civic-social-fraternal

associations) ................................................................................................ 60,950 3,245 .05

Religion ............................................................................................................... 40,223 (

3

) ...

Net foreign travel ................................................................................................... –24,083 (

3

) ...

1

 Comparable CE and PCE categories.

2

 Category not within the scope of the CE survey.

Table 1. Continued—Comparison of 1997 aggregate Consumer Expenditures with Personal Consumption Expenditures

 based on 1997 PCE benchmark

[In millions of dollars]

PCE CE Ratio

PCE categories

Raw aggregates

3

 The CE survey does not collect data at the indicated level of detail for

this category.

with installing the part . (For example, the purchase of tires

may include the price of the labor required to mount them.)

However, when most of the expenditures represent the provision of a service for this article, the item in question is

included among services.

Furniture and household equipment includes a broad set

of items, as noted in the table. The CE-to-PCE ratio for this

group is 0.68. The two categories of furniture (including

mattresses and bedsprings) and kitchen and other household

appliances appear to be most similar conceptually and

operationally among all durable goods. The ratios for these

categories are 0.74 and 1.08, respectively. By contrast, “china,

glassware, tableware, and utensils” is a category that,

although defined similarly, displays a wide gap between the

CE and PCE estimates, resulting in a ratio of only 0.27. There

is no obvious reason for this disparity.

The category “video and audio goods, including musical

instruments, and computer goods” includes a large mix of

items. Computers, peripherals, and software expenditures

reported in the CE are only 59 percent of those calculated for

the PCE. The difference probably results from the way the CE

survey and the PCE obtain data on purchases by households.

Only purchases made for nonbusiness purposes are in the

scope of the CE. Thus, if a consumer unit purchased a

computer or workstation for a home office, the purchase

would not be reported in the survey. The PCE, however,

assigns all purchases made by the general public as being

for personal consumption.

The final subgrouping in furniture and household equipment is “other durable house furnishings.” The items included in the CE and the PCE do not match sufficiently to

consider the respective categories comparable, even though

the ratio, 0.84, is fairly high. The number of detailed

component items used to derive the PCE estimate is significantly higher than the number of recall cues given to

respondents in the CE survey in collecting similar expenditure

data. Another source of difference is in the treatment of an

item such as installed carpet for owners. For this item, the

service charge for the installation can be included in the CE

estimate, but would not be in the PCE estimate. (If the

consumer unit considers the purchase of floor coverings to

be a capital improvement to the dwelling, it will be excluded

from the CE estimate and treated instead as an increase in the

value of the home.)

Estimated aggregate expenditures for other durable goods

are lower in the CE than in the PCE (the ratio is 0.54), although

none of the corresponding subgroups in other durable goods

are considered comparable categories. The CE excludes direct

payments or reimbursements by third parties, such as

insurance companies, for consumer purchases of ophthalmic

products and orthopedic appliances; the PCE counts the full

value for these items, regardless of payer. CE aggregate
32 Monthly Labor Review September 2006

CE and PCE

expenditures for this grouping are 42 percent of the PCE

estimate.

CE expenditures for wheel goods, sports and photographic

equipment, boats, and pleasure aircraft are 76 percent of PCE

expenditures. The category is not defined similarly in the two

surveys, with some CE items included that actually overlap a

number of PCE durable and nondurable categories. Within

the CE item “general sports equipment” is golf equipment,

such as golf clubs and golf balls. In deriving the PCE, the BEA

allocates aggregate spending on golf equipment between

wheel goods, sports and photographic equipment, boats, and

pleasure aircraft, on the one hand, and nondurable toys and

sport supplies in the “other nondurable goods” category, on

the other hand. Although not explicitly stated, it can be

assumed that the PCE durable allocation contains data on

golf club expenditures, while the nondurable allocation

includes data on golf balls. The CE survey cannot make the

same allocation in “general sports equipment”; CE expenditures

for this item are assigned to the durable category in the new

comparison methodology. (See table 1.) The situation repeats

itself with other sporting goods, reported in “general sports

equipment” in the CE survey. As a result, the CE-to-PCE ratio of

0.76 for “wheel goods” is higher than it otherwise might be (and

concomitantly, the CE-to-PCE ratio for nondurable toys and sport

supplies is lower).

The ratio of CE-to-PCE expenditures for jewelry and

watches is 0.44. Both surveys define the category similarly,

but, as with the category “other durable house furnishings,”

the PCE estimate is derived from a much more comprehensive

set of items than is cued for in the CE. For example, the PCE

category “jewelry made of precious metal” contains data on

expenditures for school rings, cuff links, money clips, watch

chains, rosaries, cigarette lighters, and lockets. The CE

instrument offers additional cues only for costume jewelry,

rings, and infants’ jewelry. Also, proxy reporting may affect

this category, in that a parent responding for the entire

consumer unit may not be aware of purchases of costume

jewelry made by his or her children.

The PCE category “books and maps” also is more comprehensive than its CE counterpart. The PCE category includes data on expenditures not only for books, but for

publishing as well. By contrast, in the CE, consumers report

expenditures for books, but not for publishing. The PCE also

includes art reproductions and print maps in the “books and

maps” category, whereas the CE includes them among household decorative items in the “other durable house furnishings” category.

2. Nondurable goods. Nondurable goods are grouped into

four major categories: food; clothing and shoes; gasoline,

fuel oil, and other energy goods; and other nondurable

goods. Food, clothing, and the energy groups are the most

conceptually similar between the CE and the PCE. The ratio

for the energy items, 0.87, is quite high. The ratio for food,

0.70, is lower, but still relatively high, while the ratio for

clothing, 0.61, is lower still.

CE expenditures for food purchased for off-premise

consumption is 69 percent of PCE expenditures in the same

category. Included in PCE estimates, but not asked about in

the CE, is the contribution of the Federal Women’s, Infants’,

and Children’s (WIC) program to purchases of qualifying food

groups. This contribution accounts for a portion of the CE

shortfall with respect to the PCE. The CE estimate for purchased meals and beverages is 74 percent of that of the PCE;

the latter includes food purchased at athletic venues, motion

picture theaters, and other places that are not covered in

such a specific manner in the CE. Although defined similarly

in the CE and the PCE, the category “food supplied to

employees—civilians” is not comparable between them, due

to a major difference in the way the estimates are constituted.

The CE collects respondents’ estimates of the monetary value of

free meals received at work as part of pay. The BEA allocates a

percentage of the value of many of the food items that are

included in food purchased for off-premise consumption to

derive its estimate. For example, part of the value for the detailed

item “frozen vegetables” is assigned to “food purchased for offpremise consumption,” and part is assigned to “food supplied

to employees—civilians.” There is no CE counterpart to either

of the PCE categories titled “food supplied to employees—

military” or “food produced and consumed on farms.” In the

former case, military personnel living on base are not included in

the CE population and therefore are not sampled in the survey;

in the latter, the CE does not collect any data on the value of

home production or any other good received, but not paid for,

by a consumer unit.

The ratio of CE-to-PCE expenditures on clothing and shoes

is 0.61. The ratio for shoes alone is somewhat higher (0.81).

The category of shoes is considered comparable between

the two surveys, even though the CE estimate excludes

athletic shoes for sports-related use, which the PCE includes.

Although expenditures for athletic footwear are relatively

sizeable, purchases for sports-related use are likely to be

dwarfed by purchases for general streetwear. The two

clothing and accessories categories (women’s and children’s,

and men’s and boys’) appear to be composed of the same

universe of items. That the CE estimate is about two-thirds of

the PCE estimate for women and children and about one-half

for men and boys may be due to the issue of proxy reporting

of expenditures in the CE. The only other major difference in

the category of clothing and shoes is the inclusion of

standard clothing issued to military personnel in the PCE,

but not the CE, reflecting the fact that military personnel

living on base are excluded from the CE sample.

The CE and the PCE appear to define nondurable energy
Monthly Labor Review September 2006 33

goods similarly. Aggregate expenditure estimates for this

category also are fairly close, with the CE-to-PCE ratio

standing at 0.87.

The category “other nondurable goods” comprises a mix of

disparate item groups, such as tobacco products; toilet articles

and preparations; and flowers, seeds, and potted plants. The

CE-to-PCE ratio for the category is only 0.44, reflecting in some

measure the noncomparability of many of the subgroups.

Tobacco products make up one of the two comparable

subgroups, yet the CE-to-PCE ratio, 0.51, is fairly low. Purchases

of tobacco products are considered “sensitive” because they

conceivably carry a negative connotation among consumers.

Thus, respondents of the CE are more likely to either omit or

underreport tobacco expenditures compared with other types of

spending. The other comparable category—toilet articles and

preparations—also has a relatively low ratio, 0.50, the reasons

for which are not readily apparent.

All the remaining subgroups in other nondurables are not

comparable between the CE and the PCE. Often, this is

because CE items overlap PCE categories such that definitionally comparable subgroups cannot be created. In some

instances, the overlap is between two subgroups of nondurables. For example, the CE assigns expenditures to an item

category called “lawn and garden supplies,” which includes

fertilizer and seeds. The PCE, by contrast, puts expenditures

on fertilizer into the category titled “cleaning and polishing

preparations, and miscellaneous household supplies and

paper products,” while placing expenditures on seeds in the

category “flowers, seeds, and potted plants.” In this article,

CE’s lawn and garden supplies item is assigned to the

cleaning preparations/household supplies category, thereby

increasing the CE-to-PCE ratio for that category and

decreasing the ratio for flowers, seeds, and potted plants

from what they would be if the CE item were allocated

differently.

Another instance in which a CE item overlaps PCE

categories is musical instruments and accessories. Among

the accessories included in the CE item category is sheet

music. The PCE, however, assigns sheet music to a nondurable-goods category together with magazines and

newspapers, but includes the remainder of musical instruments and accessories in durables, together with video and

audio goods. The CE item, by contrast, is assigned entirely to

the “video and audio goods” category, because PCE expenditures on sheet music are very small compared with PCE expenditures on video and audio goods.

A particularly thorny case that showcases all of these

issues is the PCE nondurable category of stationery and

writing supplies. The CE collects data for three UCC’s, parts

of which are assignable to stationery and writing supplies.

The first item, which comes from the Diary Survey, is

“stationery, giftwrap, etc.” The stationery portion of this item

clearly belongs to the PCE category, but the giftwrap portion

would be found among the paper products in the PCE’s

“cleaning and polishing preparations/miscellaneous household supplies/paper products” nondurable category. The

other two UCC’s contain expenditures for schoolbooks, supplies, or equipment for educational institutions other than

colleges or universities. Among the cues for these UCC’s are

items, such as art supplies, that fall within the PCE category

“stationery and writing supplies.” The cues also include

textbooks and microscopes, data on which would appear in

the PCE durable categories “books and maps” and “wheel

goods, sports and photographic equipment, boats, and

pleasure aircraft,” respectively. Although school supplies

could not be separated from books and equipment, they were

expected to represent the largest share of the two educationrelated UCC’s, so it was decided to assign those UCC’s to

stationery and writing supplies. The addition of expenditures

on giftwrap, schoolbooks, and school equipment represented

in the CE estimate for this category could explain the

reasonably high CE-to-PCE expenditure ratio (0.77).

The CE-to-PCE ratio for the category “drug preparations

and sundries” is among the lowest of the ratios in all the

other nondurable-goods subgroups. CE expenditures are only

33 percent of similar expenditures derived in the PCE. As with

other medical goods and services, CE estimates of drug

preparations and sundries include only out-of-pocket

payments by consumers, whereas the PCE estimate counts

reimbursements and other third-party payments as well.

3. Services. The major expenditure categories in services are

housing and household operations, transportation, medical

care, recreation, personal care, personal business, education

and research, religious and welfare activities, and a PCE

adjustment for net foreign travel. The analysis presented here

shows that no major category is considered completely

comparable between the CE and the PCE under the publication

or new-methodology definition.

The category “housing and household operations” is

composed of the following subgroups: owner-occupied

dwellings; rent and utilities, excluding telephone; other

lodging; telephone and telegraph; domestic service; and

other household operations. Housing and household

operations are treated as separate categories by the BEA in

PCE tabulations, but are combined in this analysis to facilitate

the creation of the comparable “rent and utilities” subgroup.

The PCE assigns rent to the housing category and utilities to

household operations. In the CE, however, some reports of

rent include utilities, which cannot be split out.50 The ratio of

CE-to-PCE aggregates with rent and utilities together is 0.98

for 1997 and 0.91 for 2002. The CE estimates for individual

utilities are slightly lower, due to the portion captured with

rent. Despite this difference, these estimates compare closely
34 Monthly Labor Review September 2006

CE and PCE

to PCE estimates. Expenditures for electricity are approximately the same for the CE and the PCE, yielding a ratio of

1.02. For gas, the ratio is 0.86, and for water and other sanitary

services, the ratio is 0.69. This lower ratio for water may reflect

the fact that water is more commonly included with CE rent

than are the other utilities. For 1997, 67.3 percent of rent

payments in the CE include expenditures for water, while only

22.1 percent include expenditures for gas and 14.4 percent

include expenditures for electricity.

In comparisons using the historical methodology,

expenditures for owner-occupied dwellings were not

considered comparable because of differing CE publicationstandard definitions and those used for the PCE. In the

revised methodology, the CE redefines owner-occupied

housing so that it matches the PCE definition more closely.

The PCE defines owner-occupied housing expenditures

starting with gross rents for equivalent renter-occupied units,

excluding charges for utilities, major appliances, and furniture

and furnishings. This measure, referred to as space rent, is

imputed for owner-occupied housing units with the use of

tabulations of contract-rent-to-property-value ratios by

property-value class, matched to tables with counts of owneroccupied housing units by property-value class. The

tabulations were obtained by the BEA from the Census

Bureau’s 1991 Residential Finance Survey (RFS), which is

conducted once every 10 years in conjunction with the

decennial census; the tables are from publications of the

biennial American Housing Survey (AHS), starting with 1991

data. The RFS and AHS data are used to produce estimates for

the 1991 PCE. In subsequent years, including the benchmark

year 1992, average space rent is extrapolated with the use of

the CPI for owner-occupied housing, as well as with an

adjustment that would not be captured by the CPI alone. The

quality adjustment takes into account additions, alterations,

and depreciation of the housing stock. Average owner space

rents are multiplied by the number of owner-occupied

housing units as reported in the AHS for 1991 and every

second year thereafter. For those years falling between

AHS survey years, the BEA uses data from the Current

Population Survey to interpolate and extrapolate the

number of owner-occupied units.51 PCE owner-occupied

housing includes primary residences, vacation homes, and

time shares.

For the revised comparison, reported rental equivalence

values of owner-occupied properties made by respondents

to the CE Interview are used to estimate expenditures for

owner-occupied housing. For years prior to 1999, the CE data

are not strictly comparable to the PCE data, lacking the rental

equivalence value of owned vacation homes, including time

shares. With rental equivalence used as a proxy for the space

rent of owned nonvacation homes, the CE-to-PCE ratio for

owner-occupied dwellings for 1997 is 1.26. (Were the rental

equivalence of vacation homes included, this ratio would be

even higher.)

Since 1999, data on the rental value of owned vacation

homes have been collected, making the CE estimate

conceptually comparable to the PCE’s. In the PCE, the rental

value for vacation homes, including time shares, is calculated

as 50 percent of the imputed value of housing units that are

primarily rented. If a vacation home is for the homeowner’s

use only, then 100 percent of the imputed value is counted.

The CE instrument does not detect whether the vacation

home or time share is rented occasionally. (If it always is

rented, then it is treated like a business property and is

excluded from the survey.) In order to match the PCE process,

50 percent of the rental equivalence value for vacation homes

and time shares (not rented as a business) reported in the CE

is added to the CE’s aggregate for owner-occupied housing.

Even with the addition of an estimate for vacation homes, the

ratio of CE to PCE aggregate expenditures has fallen over

time. For example, the 2002 ratio is 1.22, compared with the

earlier mentioned 1.26 for 1997.

The category “telephone and telegraph” is the first of the

two subgroups in the services sector that are not considered

comparable between the surveys. The major UCC that

accounts for most of the CE estimate for telephone services

includes expenses for pay phones. In the PCE, the receipts of

pay phone operators are one of the miscellaneous personal

services in the “other personal care” subgroup in the

“personal care” category.

The other subgroup of services that is not considered

comparable is household operations, although on first glance

it would appear to be so because the CE and PCE estimates

are so close. However, the household insurance component

of other household operations is conceptually quite different

in the CE and the PCE. As with other types of insurance, the

CE defines household insurance as out-of-pocket premium

payments made by consumers. The PCE, however, defines it

as the premiums collected net of the losses paid by insurance

companies. Because of this conceptual difference, CE

estimates for expenditures for household insurance have

averaged about 8 times greater than PCE estimates.

Transportation includes a broad range of services, from

repairs to passenger fares. Many of the CE-to-PCE ratios are

quite high, with some exceeding unity. Two of the subgroups—

repair, greasing, washing, parking storage, rental, and leasing;

and insurance—are deemed noncomparable. The locus of CEPCE conceptual differences for the former subgroup is the repair

component; these differences were noted earlier in the

discussion of tires, tubes, accessories, and other parts. (See

page 28.) Reimbursements for insurance and warranty

coverage are included in the PCE, but not in the CE, estimates.

In addition, as noted earlier, expenditures for repairs reported

in the CE may combine the cost of parts with labor charges.
Monthly Labor Review September 2006 35

The vehicle insurance category encounters the same

conceptual issues as household insurance. The PCE defines

insurance as premiums collected less losses paid out, while

the CE defines it as paid premiums only. Though not as

dramatic as the difference between the estimates in the

household insurance category, the conceptual difference in

vehicle insurance leads to higher estimates in the CE such

that the CE-to-PCE ratio is 2.11 for 1997.

Expenditures for mass transit systems are almost the same

for the two data sources for 1997. Expenditures for taxicabs,

buses, and airlines are lower in the CE, sporting CE-to-PCE

ratios of 0.67, 0.50, and 0.88, respectively. Railway transportation expenditures are quite high in the CE, compared

with PCE estimates; the CE-to-PCE ratio is 5.33. The source of

the PCE data is Amtrak revenues. CE expenditures, by contrast, cover excursions on more rail lines than Amtrak, both in

the United States and abroad.

Expenditures for medical care include expenditures for

services provided by healthcare professionals and healthcare

facilities and for health insurance premiums. The CE-to-PCE

ratios are extremely low, with the exception of medical care

and hospitalization health insurance, which has a ratio of

1.84. One reason for the low ratios is that the operating

expenses of nonprofits serving households are included in

the PCE estimate, but not in the CE aggregates. The low ratios

also reflect the fact that the CE counts only out-of-pocket

outlays net of payments and reimbursements by insurance

companies and other third-party payers. Medical care

expenditures for the PCE represent the full costs of care. The

CE estimate for medical care and hospitalization insurance is

much higher than that computed for the PCE and can be

traced to the fact that the CE counts premiums paid, whereas

the PCE deducts benefits and claims paid from premiums

earned. Health insurance in the PCE also encompasses

insurance against loss of income and workers’ compensation

insurance. Neither has a counterpart in the CE, which, on the

one hand, does not directly collect data on income loss

insurance purchased by consumers, and, on the other, does

not consider workers’ compensation as a consumer expenditure.

Recreation is composed of an eclectic set of categories.

Each of two of the six subgroups—admissions to all events,

and radio and television repair—is considered a comparable

category between the two surveys. The CE-to-PCE ratio for

admissions to all events, 0.74, is relatively high. Within this

subgroup are two components whose CE-to-PCE ratios differ

markedly: the CE estimate for admissions to motion picture

theaters, the legitimate theatre, opera, and entertainment is

86 percent of the PCE estimate, while the CE estimate for

admissions to spectator sports reaches only about one-half

the PCE estimate. The CE-to-PCE ratio for radio and television

repair, 0.20, is quite low.

The highest CE-to-PCE ratio in recreation is for parimutuel

net receipts (1.4). However, the Diary item from which the CE

calculates its estimate also includes licenses for pets, fishing,

and guns, a component that is not in the PCE category. The

CE-to-PCE ratio for commercial participant amusements is a

very low 0.30. More than 60 percent of the PCE estimate is

derived from casino gambling, which also includes slot

machines and bingo. To the extent that casino gambling is

associated with trips or vacations, the CE Interview instrument does not explicitly ask about it in collecting data on

travel expenses. If respondents report gambling expenditures

among their entertainment expenses on trips, those

expenditures are distributed among other entertainment

UCC’s. In addition, casino gambling may suffer from both

nonreporting and underreporting due to its “sensitive”

nature. All of these factors may help account for the low CEto-PCE ratio.

Overall CE personal care expenditures are about 56 percent

of those derived for the PCE. For cleaning, storage, and repair

of clothing and shoes—the only subgroup of personal care

deemed a comparable category between the surveys—CE

estimates are 56 percent of those calculated for the PCE. This

ratio is similar to that reported for clothing and shoes (0.61) in

nondurables. The CE and PCE estimates for the barbershops,

beauty parlors, and health clubs subgroup are very close in

magnitude, yielding a CE-to-PCE ratio of 0.96. However, while

the PCE apportions most health club expenses to this subgroup, it allocates some such expenses to clubs and fraternal

organizations, commercial participant amusements, and the

commercial amusements component in the other subgroup

of recreation. In the CE, by contrast, membership costs and

other expenses for health clubs are combined into one UCC

that is assigned to clubs and fraternal organizations. The

personal care subgroup for which the CE-to-PCE ratio is

lowest is “other personal care,” which includes repair of

watches, clocks, and jewelry and miscellaneous personal

services. The ratio of just 0.04 is due primarily to the larger

number of items included in the PCE estimate for which there

are no counterparts in the CE. The only CE items that can be

directly assigned to this category cover repairs of watches,

jewelry, and personal care appliances, and the rental of

clothing. The PCE includes bail bonding, dating services,

buying clubs, shopping services, and a host of other

miscellaneous services. In addition, as mentioned earlier, the

PCE includes pay phone receipts in this subgroup, whereas

the CE does not.

Personal business comprises a broad set of services, the

largest three of which, in dollar terms, are not comparable due

to conceptual or operational differences between the CE and

the PCE. Almost one-third of the PCE estimate for personal

business is accounted for by services furnished without

payment by financial intermediaries except life insurance
36 Monthly Labor Review September 2006

CE and PCE

carriers. By definition, the PCE estimate is an imputation that

represents checking, bookkeeping, and investment services

received by consumers for which they do not pay through

explicit service charges. Hence, it is not included in CE

expenditures, which represent only actual service charges

paid by consumers. The subgroup titled “expense of handling

life insurance and pension plans” is the next-largest contributor to personal business. As the name implies, the operating

expenses incurred by life insurance carriers and private

sponsors to administer policies and pension plans are part of

the PCE. The CE, however, treats each of these differently: life

insurance expenditures are represented by payments of policy premiums, while contributions made by consumers

denote outlays to private pension plans. The third-largest

component of personal business in the PCE is brokerage

charges and (fees for) investment counseling. In the CE,

respondents are asked to include broker fees with the

purchase price of any financial assets they buy and to deduct

such fees, without explicitly identifying them, from the

proceeds of any financial assets they sell. Thus, for publication or comparison purposes, these fees are not considered

part of CE expenditures.

The subgroup of bank service charges, trust services, and

safe deposit bank rental is deemed noncomparable, primarily

because the PCE covers a wider range of items than the CE

survey covers. The CE does probe for rental expenses for

safe deposit boxes as a separate item; however, expenditures

for banking services are collected in a general question with

few cues, compared with the detailed items from which the

PCE estimate is derived. In addition, services associated with

trusts, custodial accounts, and escrow accounts are included

in this subgroup in the PCE, whereas data on trust and estate

management services are collected together with data on the

preparation of tax returns in an umbrella category titled

“accounting fees” in the CE. These accounting fees are

included in the CE estimate of “other personal business

expenditures.”

Conceptually, legal services and funeral and burial

expenses are each comparable subgroups that display

markedly different CE-to-PCE ratios. For legal services, the

ratio is a very low 0.27, which may reflect a recall issue in that

the CE instrument provides a limited number of cues for

respondents concerning the types of legal proceedings for

which the services of lawyers would be employed. It is also

possible that respondents consider some of these

proceedings—for, say, criminal or personal bankruptcy

cases— to be sensitive and therefore are reluctant to report

the attendant legal fees. The ratio for funeral and burial

expenses, 0.67, is significantly higher than that for legal

services. Operationally, the CE instrument is more comprehensive for the former than the latter subgroup. Although

there is no obvious reason that the CE estimate is only twothirds of the PCE estimate, it is possible that respondents

underreport funeral and burial expenses due to the personal

and emotional nature of the subject.

The final subgroup of personal business, “other personal

business,” consists of an amalgam of items such as labor

union expenses, fees for tax return preparation, classified ads,

and miscellaneous personal business services, including

photocopying and duplicating services and the services of

private mail centers. As noted earlier, in the CE, tax return

preparation is included with trust and estate management, a

category that is split into two in the PCE and assigned to

bank service charges and safe deposit box rental. In addition,

data on many of these items are collected in the CE Diary

instrument and assigned to a UCC for miscellaneous personal

services. However, that UCC also includes expenditures for

bail bonding and shopping services, found in the “other

personal care subgroup,” and for traffic or parking tickets,

which are out of the scope of the PCE. For these reasons,

other personal business was not considered comparable

between the two surveys.

The category of education and research comprises (1)

higher education, (2) nursery, elementary, and secondary

schools, and (3) “other education and research.” The

category of education and research is similar to medical care

in the PCE in that much of the education portion of the

expenditure estimate comes from nonprofit institutions

serving households. More specifically, for private educational institutions, the PCE defines expenditures as

operating expenses. In the case of higher educational institutions, operating expenses exclude expenditures for research

and development financed under contracts or grants. For

public educational institutions, education expenses are

defined as payments of tuition for students. The CE includes

out-of-pocket expenses for tuition and other educational

expenses (excluding room and board) in its estimate for

education. In addition, there is nothing collected in the CE

instrument that is comparable to the “foundations and

nonprofit research” portion of the PCE estimate. These

differences render the category noncomparable between the

CE and the PCE.

The high CE-to-PCE ratio of 2.58 for the nursery schools

item in the nursery, elementary, and secondary schools

subgroup stands out. As opposed to paying for other

schools, consumers are more likely to pay the full costs of

nursery schools. In the CE, education expenditures for

nursery schools are combined into one UCC with similar

expenditures for preschools and child daycare centers. The

PCE, in contrast, derives its estimate by allocating one-third

of the expenses for child daycare services reported by private

providers to nursery schools. The remaining two-thirds is

assigned to the childcare component of the social welfare

subgroup in the category “religious and welfare activities.”
Monthly Labor Review September 2006 37

Table 2. Summary comparison of aggregate Consumer Expenditures and Personal Consumption Expenditures

 based for 1992, 1997, and 2002 and restricted to the most comparable categories on the basis of concepts

 involved and comprehensiveness

[In millions of dollars]

1992 1997 2002

CE-to- CE-to- CE-toPCE CE PCE PCE CE PCE PCE CE PCE

 ratio ratio ratio

 Total durables, nondurables, and services

Total ....................................................................... $4,235,263 $2,856,482 0.67 $5,544,512 $3,589,914 0.65 $7,376,059 $4,457,246 0.60

Comparable items ................................................. 2,421,707 2,085,336 .86 3,027,956 2,563,644 .85 3,841,657 3,125,581 .81

Ratio of comparable items to total ....................... .57 .73 ... .55 .71 ... .52 .70 ...

Population-adjusted comparable items

 (PCE only) ....................................................... 2,357,166 2,085,336 .88 2,928,412 2,563,644 .88 3,730,773 3,125,581 .84

 Durable goods

Total durable goods .............................................. 483,588 430,076 .89 689,767 561,031 .81 916,170 693,653 .76

Comparable durable goods ................................... 201,265 176,476 .88 257,516 205,466 .80 320,536 242,895 .76

Ratio of comparable durables to total

durables ............................................................. .42 .41 ... .37 .37 ... .35 .35 ...

New autos ....................................................... 78,016 88,202 1.13 82,326 84,636 1.03 101,649 111,924 1.10

Furniture, including mattresses

and bedsprings ............................................. 38,957 31,922 .82 56,467 42,012 .74 68,288 46,171 .68

Kitchen and other household appliances ....... 24,287 23,204 .96 26,383 28,391 1.08 31,537 33,666 1.07

Video and audio goods, including musical

instruments, and computer goods .............. 60,005 33,148 .55 92,340 50,427 .55 119,062 51,134 .43

 Nondurable goods

Total nondurable goods ......................................... 1,330,504 866,976 .65 1,618,967 1,026,129 .63 2,080,101 1,212,863 .58

Comparable nondurable goods ............................. 1,167,003 808,815 .69 1,382,788 925,321 .67 1,723,492 1,083,624 .63

Ratio of comparable nondurables to total

nondurables ....................................................... .88 .93 ... .85 .90 ... .83 .89 ...

Food purchased for off-premise

consumption ............................................... 415,693 299,635 .72 492,521 337,499 .69 615,604 389,640 .63

Alcoholic beverages purchased

for off-premise consumption ....................... 48,853 16,388 .34 61,162 18,972 .31 75,461 25,497 .34

Purchased meals and beverages ................... 245,954 179,103 .73 294,942 218,288 .74 380,021 267,770 .70

Alcoholic beverages in purchased meals ...... 33,694 13,801 .41 32,170 13,604 .42 40,591 16,487 .41

Shoes .............................................................. 32,903 23,124 .70 40,732 33,126 .81 49,281 34,960 .71

Women’s and children’s (girls’ and infants’)

 clothing and accessories, except shoes .. 115,711 75,828 .66 127,456 79,788 .63 149,205 87,889 .59

Men’s and boys’ clothing and accessories,

except shoes .............................................. 63,645 45,018 .71 80,594 42,883 .53 92,586 45,769 .49

Gasoline, fuel oil, and other energy goods ... 124,639 107,384 .86 147,739 127,847 .87 177,467 148,800 .84

Tobacco products ........................................... 48,008 27,266 .57 53,848 27,565 .51 89,122 35,668 .40

Toilet articles and preparations ...................... 37,903 21,268 .56 51,624 25,749 .50 54,154 31,144 .58

 Services

Total services ....................................................... 2,421,171 1,559,430 .64 3,235,778 2,002,754 .62 4,379,788 2,550,730 .58

Comparable services ............................................ 1,053,439 1,100,045 1.04 1,387,652 1,432,857 1.03 1,797,629 1,799,062 1.00

Ratio of comparable services to total services ... .44 .71 ... .43 .72 ... .41 .71 ...

Owner-occupied dwellings .............................. 462,286 567,986 1.23 597,957 751,763 1.26 832,479 1,014,126 1.22

Rent and utilities, excluding telephone .......... 302,733 300,749 .99 374,363 366,184 .98 466,483 424,634 .91

Other lodging .................................................. 32,615 22,657 .69 45,699 30,842 .67 53,633 37,333 .70

Domestic service ............................................ 11,356 7,937 .70 14,688 7,954 .54 16,754 8,958 .53

Transportation ................................................. 157,664 158,353 1.00 245,666 225,711 .92 287,988 252,818 .88

Admissions to all events ................................ 16,614 12,658 .76 24,984 18,595 .74 34,583 21,888 .63

Radio and television repair ............................. 2,977 1,092 .37 3,900 775 .20 4,034 360 .09

Cleaning, storage, and repair of clothing

and shoes ................................................... 11,365 12,722 1.12 13,646 7,966 .58 15,784 13,501 .86

Legal services ................................................ 44,860 9,180 .20 53,748 14,336 .27 71,258 14,910 .21

Funeral and burial expenses .......................... 10,969 6,711 .61 13,001 8,731 .67 14,633 10,534 .72

Category

This allocation may explain the high CE-to-PCE ratio for

nursery schools and, likewise, the relatively low ratio of 0.38

for childcare.

The “other education and research” subgroup is not

deemed comparable between the two surveys primarily

because the CE does not have a counterpart to the PCE

expenditures derived from the operating expenses of grantmaking foundations and nonprofit firms engaged in research

and development. The CE expenditures reported for other

education and research come from schools that are actually

very close in definition to the PCE component of commercial

and vocational schools. The CE estimate, however, consists

of tuition expenditures only, whereas the PCE estimate is

derived from a broader class of items: operating expenses for
38 Monthly Labor Review September 2006

CE and PCE

tax-exempt schools and tuition, fees, and other school receipts

subject to Federal taxes.

Expenditures for religious and welfare activities in the PCE

are derived almost exclusively from the operating expenses of

nonprofits serving households. In contrast, most of the CE

expenditures in this category are reported as contributions to

charitable and other nonprofit organizations. Within the social

welfare subgroup, CE estimates are for babysitting and childcare in noninstitutional settings, adult daycare, and home

care for the elderly, disabled, handicapped, or convalescents.

Because of this conceptual incompatibility, the category of

religious and welfare activities is not considered comparable

between the CE and the PCE. The ratio for the entire category

is 0.67.

Summary of comparable CE-to-PCE estimates. When the CE

and PCE estimates are focused on only those categories which

are comparable to each other in the two surveys, the ratio of

CE-to-PCE aggregate expenditures moves closer to unity. (See

table 2.) Adjusting for population differences between the

surveys brings the ratio even closer. The comparability

adjustment also somewhat mitigates the decline in the ratio

over time: for 1992, the ratio increases by 19 percentage

points, from 0.67 to 0.86, and it rises by an additional

percentage point for both 1997 and 2002.

Taking out noncomparable items increases the CE-to-PCE

ratio for services by an average of about 40 percentage points

for each of the 3 benchmark years. For the same 3 years, the

ratio for nondurable goods increases an average of 4 points,

while that for durable goods decreases marginally.

Not surprisingly, eliminating noncomparable items from the

comparison has a major impact on services, because the

estimates in many of that category’s components are affected by

significant conceptual differences. Third-party payments in

medical care; services provided by nonprofit institutions in

medical care, education, and religious and welfare activities; and

services furnished without payment by financial intermediaries

in personal business are examples of noncomparable categories

whose elimination from the comparison has a considerable

impact on services. Thus, in some sense, the remaining service

categories exhibit the “good ratios” that are closer to unity.

For some comparable categories—for example, radio and

television repair (0.20 for 1997) and legal services (0.27 for

1997)—the ratios nonetheless are still low.

In the case of nondurable goods, restricting the comparison to comparable categories does not improve the ratios

as much. To some extent, this is because most of the aggregate expenditures for nondurables for 1997—85 percent for

the PCE and 90 percent for the CE—are found in comparable

categories. The lowest ratio in nondurable goods is 0.31, for

purchases of alcoholic beverages. The CE is known to exhibit

underreporting in sensitive items such as alcohol. Underreporting also explains the relatively low ratio for tobacco

products (0.51).

The CE-to-PCE ratio for comparable categories of durable

goods displays little change, despite the fact that the ratio

has decreased more for durable goods than for the other two

major expenditure groups.

Pinpointing the reasons for the increasing disparities

between the two surveys is the continuing goal of the BLS team.

Whether the differences are due to the way the PCE is derived,

to the manner in which CE data are collected and adjusted, or to

some combination of the two is yet to be determined. Future

research will focus on expenditure categories for which estimates have been similar in the past, but that now show CE

estimates growing less rapidly than their PCE counterparts. 

Notes

ACKNOWLEDGMENTS: Thanks are extended to David Scott Johnson and

Mary McCarthy for their input and direction concerning this project.

The authors also thank Fidan Kurtulus, Thomas Pollard, and Sheila

Sankaran, earlier members of the data comparisons team; each

contributed significantly to the project. Assistance from Karen

Horowitz, Greg Key, Nicole Mayerhauser, Denise McBride, Clint

McCully, and George Smith of the Bureau of Economic Analysis has

been invaluable. The authors also appreciate comments on earlier

versions of this article provided by Barry Bosworth, Tim Bresnahan,

Ernie Berndt, and Frederick Knickerbocker during the Federal

Economic Statistics Advisory Committee meeting at the Bureau of

Labor Statistics on March 21, 2003, and Robert McClelland more

recently. All views expressed in this article are those of the authors

and do not necessarily reflect the policies of the U.S. Bureau of Labor

Statistics or the views of other staff members. The authors take full

responsibility for any errors.

1 Raymond Gieseman, “The Consumer Expenditure Survey:

quality control by comparative analysis,” Monthly Labor Review,

March 1987, pp. 8–14, quote from p. 9.

2

 The CE consists of two components: a weekly Diary Survey and a

quarterly Interview Survey. Simply put, in the former, respondents

fill out two consecutive 1-week expenditure diaries. In the latter,

respondents report expenditures through personal interviews every 3

months. Each CE component is described more fully later in this article.

Early methodological work included the use of a supplementary Diary

administered to respondents and interviewers to measure attitudes and

behaviors associated with keeping the Diary, and the use of different

formats for the Diary instrument. More recent work includes the

testing of computer-assisted personal interviewing (CAPI). Findings

from this work led to the use of a CAPI instrument to collect data in the

Interview component since April 1, 2003, and in the household

characteristics questionnaire of the Diary component since January 2004.

3

 For recent published comparisons, see the following BLS

publications: Consumer Expenditure Survey 1992–93, Bulletin 2462,

September 1995; Consumer Expenditure Survey 1994–95, Bulletin

2492, December 1997; Consumer Expenditure Survey 1996–97,

Report 935, September 1999; Consumer Expenditure Survey 1998–

99, Report 955, November 2001; and Consumer Expenditure Survey
Monthly Labor Review September 2006 39

2001–02, Report 969, September 2003. Source data against which CE

data have been compared include, for example, the National Health

Expenditures from the Health Care Financing Administration,

expenditures from the Residential Energy Consumption Survey and

Residential Transportation Energy Consumption Survey from the

Department of Energy, Progressive Grocer and Supermarket Business

food expenditures, and personal consumption expenditures (PCE) of

the National Income and Product Accounts from the Bureau of

Economic Analysis. Other occasional comparisons also have been

conducted. For example, health insurance expenditures from the CE

survey have been compared with those from the Medical Expenditure

Panel Survey supplied by the Agency for Healthcare Research and

Quality of the U.S. Department of Health and Human Services.

Appendix A includes a summary of sources that have been compared

with the CE.

4 A consumer unit comprises (1) all members of a particular

household who are related by blood, marriage, adoption, or some

other legal arrangement; (2) a person living alone or sharing a

household with others or living as a roomer in a private home or

lodging house or in permanent living quarters in a hotel or motel, but

who is financially independent; or (3) two or more persons living

together who use their income to make joint expenditure decisions.

Financial independence is determined by the three major expense

categories: housing, food, and other living expenses. For a

respondent to be considered financially independent, at least two of the

three major expense categories have to be provided entirely or in part

by the respondent.

5

 Gieseman, “The Consumer Expenditure Survey,” p. 9.

6

 In April 2000, a team of researchers from the Division of

Consumer Expenditure Surveys and the Division of Price and Index

Number Research, was convened to compare the CE data with data

from other sources, primarily the PCE. The team’s first report describes

the team charter, plans for comparing the data, and results obtained

from comparing CE and PCE footwear aggregate expenditures. (See

William Passero Thesia Garner, Sheila Sankaran, and Mark Vendemia,

“Comparison of Estimates from the U.S. Consumer Expenditure

Survey and the National Accounts Personal Consumption

Expenditures: Footwear,” unpublished paper, Nov. 19, 2001).

7

 This methodology, which is based on the type of expenditure (for

example, food, housing, or transportation) and has been used

previously in official publications (most recently in Consumer

Expenditure Survey, 1998–99, Report 955 (Bureau of Labor Statistics,

November 2001)), is referred to as the “historical comparison

methodology.”

8

 For example, Orazio P. Attanasio and Guglielmo Weber examine

CE data in “Is Consumption Growth Consistent with Intertemporal

Optimization? Evidence from the Consumer Expenditure Survey,”

Journal of Political Economy, December 1995, pp. 1121–57; and

Jonathan A. Parker and Christian Julliard focus on PCE nondurable

expenditures in “Consumption Risk and Cross-Sectional Returns,”

Journal of Political Economy, February 2005, pp. 185–222. Also,

Daniel T. Slesnick, “Aggregate Consumption and Saving in the Postwar

United States,” Review of Economics and Statistics, November 1992, pp.

585–97, and “Are Our Data Relevant to the Theory? The Case of

Aggregate Consumption,” Journal of Business and Economic Statistics,

January 1998, pp. 52–61, examines such adjustments to CE and PCE

expenditures aimed at making the data from the two sources more

comparable in an effort to estimate consumption. Finally, Jonathan

Fisher and David S. Johnson, “Consumption Mobility in the United

States: Evidence from Two Panel Data Sets,” unpublished manuscript

(Bureau of Labor Statistics, 2004), and David S. Johnson, Timothy

Smeeding, and Barbara Boyle Torrey, “Economic in equality through the

prisms of income and consumption,” Monthly Labor Review, April 2005,

use CE data to estimate the consumption of durables, nondurables, and

services.

9

 To adjust the PCE estimates so that they refer to the same population

as the CE does (that is, encompassing the noninstitutional population,

those not living on a military base, and those not living overseas), the PCE

aggregates would need to be multiplied by approximately 0.967 for 1997

and by 0.97 for 2002. The multiplier is derived by finding the proportion

of the total U.S. population covered by the CE survey to the total population

covered by the PCE. (See Statistical Abstract of the United States: 2003,

123rd edition (U.S. Census Bureau, 2003).)

10 One of the earliest comparisons by outside researchers was Henrik

S. Houthakker and Lester D. Taylor’s, Consumer Demand in the United

States: Analyses and Projections, 2d ed. (Cambridge, MA, Harvard

University Press, 1970). In this work, the authors compared 1960–61 CE

data with PCE aggregate expenditures. (See also Slesnick, “Aggregate

Consumption and Saving,” which cites Houthakker and Taylor.)

11 For example, Attanasio and Weber, “Is Consumption Growth

Consistent?” and Jonathan A. Parker and Bruce Preston, “Precautionary

Saving and Consumption Fluctuations,” American Economic Review,

September 2005, pp. 1119–43, use CE data to focus on consumption growth;

Barry Bosworth, Gary Burtless, and John Sabelhaus, “The Decline in Saving:

Evidence from Household Surveys,” Brookings Papers on Economic Activity,

vol. 1991, no. 1 (1991), pp. 183–241, examine CE and PCE data with regard to

the decline in savings in the United States; and Jesús Fernandez-Villaverde and

Dirk Krueger, “Consumption over the Life Cycle: Facts from Consumer

Expenditure Survey Data,” unpublished manuscript, University of

Pennsylvania and University of Frankfurt, 2004, use CE data and specify

cohorts by the reference person’s age to examine consumption over the life

cycle of consumer units.

12 For example, see Jack E. Triplett, “Measuring Consumption: The

Post-1973 Slowdown and the Research Issues,” Federal Research Bank

of St. Louis Review, May–June 1997, pp. 9–42; Dennis Fixler and Ted

Jaditz, “An Examination of the Difference Between the CPI and the PCE

Deflator,” Working Paper 361 (Bureau of Labor Statistics, 2002); David

S. Johnson and John Greenlees, “Comparison of Movements in the CPI

and PCE Price Indexes,” paper presented to the Federal Economic

Statistics Advisory Committee (FESAC) (Bureau of Labor Statistics, March

21, 2003); David E. Lebow and Jeremy B. Rudd, “Measurement Error in

the Consumer Price Index: Where Do We Stand?” Journal of Economic

Literature, March 2003, pp. 159–201; and Charles L. Schultze and

Christopher Mackie, eds., At What Price? Conceptualizing and Measuring

Cost-of-Living and Price Indexes, Panel on Conceptual, Measurement,

and Other Statistical Issues in Developing Cost-of-Living Indexes

(Washington, DC, National Academy Press, 2002). Triplett also examined

the relationship between the PCE deflator and the CPI.

13 Slesnick, “Aggregate Consumption and Saving.”

14 Slesnick refers to this exercise as a “crude attempt at reconciling

the two series” (Ibid., p. 593).

15 Ibid., p. 594.

16 Gieseman, “The Consumer Expenditure Survey.”

17 Slesnick, “Aggregate Consumption and Saving,” p. 594.

18 Alternative Poverty Measures, GAO/GGD-96–183R (General

Accounting Office, 1996).

19 Ibid.; see also “Reconciliation of PCE and Consumer Expenditure

Survey Estimates of Consumer Spending,” preliminary draft (Bureau of

Economic Analysis, Sept. 7, 1994).

20 Nonprofit institutions serving households that are included in the

PCE consist of trade unions, professional associations, clubs and fraternal

organizations, educational institutions, foundations for education and

research, and religious and welfare organizations. (See Charles Ian Mead,

“Separate Recognition of Income and Outlays of Nonprofit Institutions

Serving Households,” mimeo (Bureau of Economic Analysis, 2002).)
40 Monthly Labor Review September 2006

CE and PCE

21 Slesnick, “Are Our Data Relevant to the Theory?”

22 Ibid., p. 54.

23 Mead, “Separate Recognition of Income and Outlays,” table 1,

“North American Industry Classification System (NAICS) Industries

with Nonprofit Activity in Personal Consumption Expenditures.”

The industries listed include broadcasting and telecommunications;

information and data processing services; professional, scientific, and

technical services; education services; ambulatory health care services;

hospitals; nursing and residential care facilities; social assistance;

performing arts, spectator sports, and related industries; museums,

historical sites, and similar institutions; amusement, gambling, and

recreation industries; accommodations; and religious, grantmaking,

civic, professional, and similar organizations.

24 Charles Ian Mead, Clinton P. McCully, and Marshall B. Reinsdorf,

“Income and Outlays of Households and of Nonprofit Institutions Serving

Households,” Survey of Current Business, April 2003, pp. 13–17.

25 Triplett, “Measuring Consumption.”

26 E. Raphael Branch, “The Consumer Expenditure Survey: a

comparative analysis,” Monthly Labor Review, December 1994, pp.

47–55.

27 Triplett, “Measuring Consumption,” p. 16.

28 Ibid.

29 David E. Lebow and Jeremy B. Rudd, “Measurement Error in the

Consumer Price Index: Where Do We Stand?” Journal of Economic

Literature, March 2003, pp. 159–201; quote from p. 168.

30 Ibid.

31 Charles, L. Schultze and Christopher D. Mackie, eds., At What

Price? Conceptualizing and Measuring Cost-of-Living and Price Indexes,

National Research Council Panel on Conceptual, Measurement, and Other

Statistical Issues in Developing Cost-of-Living Indexes (Washington, DC,

National Academy Press, 2002), p. 250.

32 Ibid., p. 274.

33 Recommendation 9-1 reads as follows: “Before additional

resources are directed toward increasing its sample size (beyond the

current plan), the accuracy of the CEX should be carefully evaluated.

Assessing the net advantages of using the BEA’s PCE to produce the

upper-level weights for the national CPI should be part of this

evaluation” (Schultze and Mackie, At What Price? p. 274).

34 Recommendation 9-2 states, “If categories can be reasonably

well matched between the CPI and PCE, so that comparable item strata

indexes can be created, a program should be set up to produce an

experimental CPI that uses PCE-generated weights at the upper (218

item) level but that is otherwise no different from the CPI” (Schultze

and Mackie, At What Price? p. 274).

35 For example, in an e-mail communication between David Lebow

of the Federal Reserve Board and John Greenlees of the Bureau of

Labor Statistics on Feb. 8, 2000, concerning CPI weights based on the

CE, Lebow expressed concerns about the difference in magnitude of

the CE weights used for the CPI relative to those used in the production

of the PCE. Concerns also were expressed by attendees of the

Conference on Current and Future Developments in the Consumer

Expenditure Survey, sponsored by the MacArthur Network on

Inequality and Poverty in Broader Perspectives and held at Princeton

University, May 19–20, 1998. Weighing in as well were the Council

of Professional Associations of Federal Statistics, which held a

statistical policy seminar titled “Integrating Federal Statistical

Information Processes” in Washington, DC, in November 2000; and J.

Steven Landefeld, Robert Parker, and others attending the BLS

Conference on Issues in Measuring Price Change and Consumption,

Washington, DC, June 5–8, 2000.

36 The Bureau’s investigations are reflected in the work of Gieseman,

“The Consumer Expenditure Survey,” and Branch, “The Consumer

Expenditure Survey.”

37 Descriptions of the CE survey and the PCE are based on various

publications. (See, for example, Personal Consumption Expenditures,

Methodology Paper Series MP-6 (Bureau of Economic Analysis, June

1990); BLS Handbook of Methods, Bulletin 2490 (Bureau of Labor

Statistics, April 1997); and Carol S. Carson, “GNP: An Overview of

Source Data and Estimating Methods,” Survey of Current Business,

July 1987, pp. 103–27.)

38 For more information on BLS adjustment of the data, see Appendix B.

39 The PCE population typically has been about 3 percent higher

than the CE population since 1992.

40 In a BLS mimeo, “CE to PCE Comparison Methodology,” Thomas

Pollard gives a comprehensive description of the steps followed by

the Bureau to produce CE-to-PCE comparisons.

41 Consumer Expenditure Survey 1984–86, Bulletin 2333 (Bureau

of Labor Statistics, August 1989).

42 For more information on selecting the appropriate source and

on how annual estimates for publications are calculated, see chapter

16 of the BLS Handbook of Methods.

43 Clint McCully, “Presentation on PCE to the CE Staff” (Bureau of

Economic Analysis, Apr. 19, 2000).

44 The BEA planned to continue monitoring expenditures on private

health insurance reported in the CE on an annual basis as a cross-check

on its own estimates (e-mail from Ernie Wilcox, Bureau of Economic

Analysis, to Thesia I. Garner, Bureau of Labor Statistics, Nov. 2,

2000).

45 Thesia I. Garner and Bill Passero, “Out-of-Pocket Expenditures for

Private Health Insurance: An Analysis of Consumer Expenditure Survey

and Medical Expenditure Panel Survey Data,” mimeo (Bureau of Labor

Statistics, June 1, 2001). (See Appendix A for a more detailed description.)

46 See Branch, “The Consumer Expenditure Survey.”

47 “NIWD PCE Bridge to 1992 Input-Output Table,” unpublished data

sent by Greg Key of the Bureau of Economic Analysis to William D.

Passero of the Bureau of Labor Statistics, Mar. 19, 2002.

48 “1997 Benchmark I-O Accounts,” data for BLS internal use only

(Bureau of Economic Analysis, Feb. 5, 2003).

49 The detailed concordance of PCE categories and CE UCC items used

for this exercise is available from the authors upon request.

50 In 1992, 1997, and 2002, 77 percent of all rent payments

included payment of at least one of the following utilities: electricity,

gas, water, and trash.

51 For further information, visit the BEA Web site at www.bea.gov.
Monthly Labor Review September 2006 41

In determining its estimates for the Personal Consumption

Expenditures (PCE), the Consumer Expenditure (CE)-PCE comparison

team learned that the Bureau of Economic Analysis employs

substantial “expert judgment” in its production of PCE estimates.

This judgment could affect the accuracy of the estimates and therefore

affect the CE-to-PCE ratio. Several of the BEA adjustments to the PCE

are presented in the main text of this article.

At the same time, the CE’s “expert judgment,” which comes in

the form of allocations and imputations, or a combination of both,

could affect the accuracy of the CE estimates, further contributing

to differences between the CE and PCE aggregate expenditure

estimates. Appendix table B-1 lists the percent of total expenditures

that each of these “expert judgments” constitutes. The table

provides information regarding the magnitude of the adjustments

in the CE aggregates and suggests which categories of expenditures

would be most affected, thereby influencing the CE-to-PCE ratios.

Appendix table B-1 presents expenditures and data adjustment

results for 1997. As an example, 25 percent of food expenditures

APPENDIX B: Data adjustment in the Consumer Expenditure Survey

APPENDIX A:

Personal Consumption Expenditures (PCE). The principal source of

independent estimates used in conjunction with the Consumer

Expenditure Survey (CE) is the PCE component of the National

Income and Product Accounts (NIPA) produced by the Bureau of

Economic Analysis (BEA) of the U.S. Department of Commerce.

The PCE measures the market value of goods and services purchased

by the “personal sector,” one of the four sectors covered in the NIPA.

The personal sector consists of “persons resident” in the United

States, where the term persons is defined as “individuals and the

nonprofit institutions that serve them.” PCE estimates of aggregate

expenditures represent the market value of goods and services

purchased by all persons. The BEA conducts comprehensive revisions

of the NIPA at 5-year intervals, primarily to update the series with

new results from the Census Bureau’s quinquennial censuses and

other sources used in the Accounts. These revisions may include

revisions to selected methods of estimation. In addition, the BEA

conducts annual revisions to the PCE that affect earlier data and that

also may include changes in estimation methods.

National Health Expenditures. The Centers for Medicare &

Medicaid Services (CMS), formerly the Health Care Financing

Administration (HCFA), of the U. S. Department of Health and

Human Services publishes annual data on total U.S. aggregate

healthcare expenditures. This data set, called the National Health

Expenditures, consists of data on expenditures by all sources in

the U.S. economy, including public and private sources. The

National Health Expenditures cover U.S. citizens living abroad,

military personnel, and parts of the institutional population (a

larger population than is covered by the CE survey). In particular,

CMS data cover the nursing home population, whereas the CE does

not. Also, the CMS reports out-of-pocket healthcare expenditures,

which include expenditures for medical care that are not covered

by personal health insurance or other sources of payment. To

derive out-of-pocket estimates, the CMS uses data from

administrative and industry sources, as well as CE data.

Residential Energy Consumption Survey (RECS). The Energy

Information Administration of the U.S. Department of Energy

administers the Residential Energy Consumption Survey (RECS),

which provides information on the use of energy in residential

housing units in the United States. The RECS is a national

statistical survey that collects data on energy use in occupied

primary housing units. RECS data are obtained from three different

sources: onsite personal interviews conducted in the housing unit;

telephone interviews with the rental agents of housing units that

have any of their energy use included in their rent; and

questionnaires mailed to the housing units’ energy suppliers, asking

them to provide the units’ actual energy consumption amounts

and expenditures. The universe for this sample design comprises

all housing units occupied as the primary residence in the 50

States and the District of Columbia. The RECS does not cover

vacant housing units, seasonal units, or second homes.

Medical Expenditure Panel Survey. The Medical Expenditure

Panel Survey (MEPS) is published by the Agency for Health Care

Research and Quality (formerly the Agency for Health Care Policy

and Research) of the U.S. Department of Health and Human

Services. The MEPS estimate, used to measure the cost of out-ofpocket private health insurance premiums, is based on data

collected from both the household component (HC) and the insurance component (IC) of the survey, with MEPS-IC employmentbased data augmented by data from the Office of Personnel

Management on Federal employees. The MEPS-HC collects data

on hospitalization and physician coverage only, excluding singlepurpose coverage such as insurance that provides for only dental or

vision healthcare needs. The MEPS-IC differs from the CE in that it is an

establishment survey rather than a household survey and the

collection unit is an enrollee rather than a policy. Unlike the MEPS-HC,

the MEPS-IC reports premiums—both employer-paid premiums and

out-of-pocket premiums paid by employees—for employersponsored coverage (as well as providing information on the coverage

itself); thus, the data representing the portion of out-of-pocket

premiums can be compared against CE data on aggregate premiums.

Supermarket Business, Inc., and Progressive Grocer. Food

expenditure comparisons between the CE, on the one hand, and

Supermarket Business, Inc., and Progressive Grocer, on the other,

were published periodically from 1987 until 1997. Supermarket

Business, Inc., conducted annual mail and telephone surveys of

food manufacturers, packers, wholesalers, and retailers. These

surveys focused on measuring total industry retail sales covering

all types of food stores. Progressive Grocer conducted annual

independent studies of the sales performance of supermarkets

(grocery stores with annual food sales of $2 million or more) in

relation to other kinds of retail outlets, comparing sales by product

and by category. Such outlets accounted for about 80 percent of

grocery store food sales. Supermarket Business, Inc., and

Progressive Grocer subsequently merged, and the combined

entity no longer provides usable food expenditure data for

comparison with the CE.

APPENDIX A: Sources that are compared with the Consumer Expenditure Survey
42 Monthly Labor Review September 2006

CE and PCE

Appendix table B-1.

Food .............................................................................. $505,791 0.6 25.0 0.0 74.4

 Food at home ............................................................ 303,340 .3 21.4 .0 78.3

 Food away from home ............................................... 202,451 1.0 30.4 .0 68.5

Alcoholic beverages ..................................................... 22,401 .3 12.0 .0 87.6

Rent, utilities, and public service ................................. 483,668 5.9 10.1 .2 83.9

 Rent ........................................................................... 228,987 11.0 3.5 .0 85.4

 Utilities ....................................................................... 169,265 1.2 24.0 .5 74.3

 Telephone................................................................... 85,416 1.2 .0 .0 98.8

Household operations ................................................... 57,905 .8 3.1 .0 96.0

Housekeeping supplies ................................................. 47,914 .0 6.4 .0 93.6

Household furnishings and equipment ......................... 159,560 1.1 10.2 .1 88.6

 Household textiles ..................................................... 8,353 .6 6.3 .0 93.1

 Furniture .................................................................... 40,894 .9 26.7 .3 72.1

 Floor coverings .......................................................... 8,198 .3 5.3 .0 94.4

 Major appliances ....................................................... 17,861 4.1 4.8 .4 90.7

 Small appliances, miscellaneous

household equipment ............................................. 84,255 .7 4.2 .0 95.1

Apparel and services .................................................... 175,752 .1 15.3 .1 84.4

 Men’s and boys’ ........................................................ 42,883 .2 16.6 .2 83.0

 Women’s and girls’ .................................................... 71,670 .2 19.4 .2 80.2

 Children under 2 years ............................................. 8,117 .1 20.7 .1 79.2

Footwear .................................................................... 33,126 .0 11.7 .0 88.3

Other apparel products and services ....................... 19,956 .0 1.3 .0 98.6

Transportation ............................................................... 681,669 7.9 3.7 .0 88.4

 Vehicle purchase ....................................................... 288,830 13.6 .0 .0 86.4

 Gas and motor oil ...................................................... 115,872 1.9 .2 .0 97.9

 Other vehicle expenses ............................................ 235,459 4.6 4.0 .1 91.3

 Public transportation ................................................. 41,508 3.8 37.4 .2 58.6

Healthcare ..................................................................... 194,300 5.3 3.1 .1 91.4

 Health insurance ....................................................... 93,042 10.2 .0 .0 89.8

 Medical services ....................................................... 56,000 1.0 6.4 .4 92.3

 Drugs ......................................................................... 33,804 .7 3.0 .0 96.3

 Medical supplies ........................................................ 11,389 .7 12.8 .4 86.1

Entertainment ................................................................ 182,147 3.8 4.3 .1 91.7

 Fees and admissions ................................................ 49,699 4.0 10.8 .5 84.7

 Televisions, radios, and sound equipment ............... 60,946 1.9 1.0 .0 97.1

Total

expenditures

(millions of

 dollars)

Category of expenditures Imputations Allocations Directly

reported

Imputations

and

allocations

Appendix table B–1. Percentage of data affected by data adjustment procedures, by category of expenditures, 1997

is allocated, 0.6 percent is imputed, and 74.4 percent is directly

reported (requiring no data adjustments).

The estimates in appendix table B-1 were computed with the use of

indicator variables, or cost flags,1

 that are assigned to each UCC record

in the CE data file to indicate whether the value was directly reported,

imputed, allocated, or imputed and allocated. For this reason, grouping

UCC’s into the categories presented in the table may return a higher rate

of adjustment for a particular category than it should. For example, one

may say that a consumer unit paid x amount of money on utilities. The

amount x would then be allocated to the different types of utilities on

the basis of CE-developed formulas, so that each individual UCC for

which an allocation was made would get a cost flag indicating that fact.

Then, when the UCC’s were regrouped under the utilities category, they

would carry the allocation cost flags with them. The number of

allocations in the utilities category would then include these expenditures

(the original amount x), even though they were directly reported as

utilities. The total allocated expenditures for utilities would therefore

appear to be higher than they actually are. This problem can occur in all

categories for which respondents are likely to group items together.

Consequently, the estimates for allocations will be higher than the

actual expenditures allocated.

Note to Appendix B

1

 The cost flags are as follows:

0 No adjustment

1 One of the source fields was flagged by the Census Bureau

 (source flag > 0)

2 Manually updated

3 Imputation

4 Allocation

5 Imputation and allocation

6 Computation only

7 Computation and imputation

8 Computation and allocation

9 Computation, imputation and allocation

Q Manual imputation

R Manual allocation

S Section 18 special processing
Monthly Labor Review September 2006 43

Appendix

 Pets, toys, and playground equipment ..................... 25,222 .1 2.6 .0 97.3

 Other entertainment supplies and equipment ........... 46,281 8.1 2.8 .0 89.1

Personal care products and services .......................... 55,644 5.1 1.0 .0 93.9

Reading ......................................................................... 17,270 5.7 .0 .0 94.3

Education ...................................................................... 60,241 1.7 3.8 .0 94.5

Tobacco ......................................................................... 27,839 3.7 .1 .0 96.2

Miscellaneous ............................................................... 58,846 14.5 2.2 .0 83.2

Life and other personal insurance ................................ 39,975 7.5 .0 .0 92.5

Appendix table B-1. Continued—Percentage of data affected by data adjustment procedures, by category of

 expenditures, 1997

Total

expenditures

(millions of

 dollars)

Imputations

and

allocations

Directly

reported Category of expenditures Allocations Imputations

Food, total .............................. 0.77 0.80 0.77 0.78 0.75 0.78 0.76 0.74 0.75 0.74 0.72

Food at home ......................... .69 .70 .67 .69 .67 .71 .69 .72 .73 .74 .72

Food away from home ............ .95 1.00 .97 .95 .89 .92 .88 .77 .77 .73 .73

Alcoholic beverages .............. .44 .47 .41 .43 .38 .38 .36 .35 .37 .32 .33

Rent, utilities, etc. ................. .95 .84 .92 .92 .92 .92 .91 .89 .92 .90 .92

Rented dwellings, total .......... .95 .85 .92 .93 .95 .95 .92 .88 .94 .91 .93

Utilities, fuels, and related .... .94 .82 .92 .90 .88 .88 .89 .90 .90 .89 .90

Telephone services ................ .94 .83 .90 .91 .94 .94 .95 .95 .88 .88 .87

Household operations ............ .91 .82 .83 .88 .93 .91 .80 .85 .82 .76 .76

Housekeeping supplies .......... .58 .61 .59 .59 .59 .61 .60 .61 .60 .54 .51

Household furnishings ........... .76 .68 .71 .69 .68 .66 .67 .72 .68 .67 .67

...............................................

Apparel and services ............. .70 .68 .64 .64 .62 .62 .62 .65 .62 .58 .56

Men and boys ........................ .77 .75 .71 .70 .70 .68 .66 .70 .71 .64 .57

Women and girls .................... .69 .70 .64 .65 .61 .65 .66 .69 .63 .59 .59

Children under 2 years .......... 1.03 1.02 1.08 1.06 1.08 1.22 1.21 1.07 .94 .95 .94

Footwear ................................ .77 .73 .64 .67 .67 .60 .69 .75 .70 .72 .71

Other apparel ......................... .54 .49 .51 .50 .46 .44 .41 .46 .43 .39 .37

Transportation ........................ .95 .85 .98 .86 .91 .87 .83 .90 .86 .84 .87

Vehicle purchases ................ 1.17 1.07 1.22 1.03 1.15 1.09 1.02 1.16 1.09 1.06 1.11

Gasoline and motor oil ........... 1.03 .92 1.10 1.00 1.03 .98 .93 .92 .89 .88 .89

Other vehicle expenses ......... .62 .51 .58 .56 .55 .54 .55 .62 .61 .58 .59

Maintenance and repairs ....... .62 .51 .57 .55 .54 .53 .55 62 .60 .57 .56

Vehicle rental and other......... .59 .51 .65 .59 .59 .60 .53 .64 .66 .64 .66

Public transportation .............. .65 .59 .61 .61 .59 .57 .57 .61 .59 .59 .65

Entertainment ......................... .68 .64 .65 .64 .65 .63 .59 .61 .59 .60 .57

Fees and admissions ............. .80 .69 .72 .73 .71 .67 .61 .59 .54 .56 .58

Televisions, radios, sound ..... .73 .65 .68 .63 .65 .63 .65 .67 .68 .75 .66

Pets, toys, and playground ... .71 .66 .70 .70 .68 .66 .67 .62 .60 .60 .55

Other entertainment ............... .47 .52 .51 .51 .57 .57 .44 .53 .52 .45 .42

Personal care ......................... .73 .70 .68 .67 .64 .66 .62 .67 .63 .60 .60

Reading .................................. .59 .55 .58 .55 .52 .54 .51 .53 .53 .51 .47

Tobacco products, etc. .......... .70 .60 .67 .63 .66 .65 .65 .64 .57 .55 .56

Miscellaneous ........................ .31 .29 .30 .29 .29 .29 .26 .26 .26 .22 .24

 Published title 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994

Appendix table C-1. CE-to-PCE ratios of aggregate expenditures, historical methodology1

1995 1996 1997 1998 1999 2000 2001 2002

Food, total .............................................. 0.72 0.75 0.73 0.72 0.73 0.71 0.71 0.70 0.77 0.73

Food at home ......................................... .73 .73 .72 .68 .69 .69 .67 .66 .70 .71

Food away from home ............................ .71 .78 .75 .78 .79 .75 .76 .75 .92 .75

Alcoholic beverages .............................. .33 .36 .35 .34 .34 .37 .34 .36 .40 .35

Rent, utilities, etc. ................................. .80 .89 .90 .89 .88 .85 .88 .86 .91 .88

Rented dwellings, total .......................... .80 .90 .90 .89 .89 .86 .87 .84 .92 .88

Utilities, fuels, and related .................... .80 .88 .90 .90 .87 .84 .91 .87 .89 .88

Telephone services ................................ .79 .87 .82 .81 .78 .77 .79 .84 .92 .83

Household operations ............................ .62 .69 .68 .64 .75 .73 .81 .78 .87 .73

Housekeeping supplies .......................... .52 .54 .53 .52 .53 .51 .53 .52 .60 .53

Household furnishings ........................... .63 .63 .66 .67 .59 .57 .55 .58 .70 .63

1984–

91

1992–

2002

See note at end of table.
44 Monthly Labor Review September 2006

CE and PCE

1

Apparel and services ................................. .54 .58 .55 .51 .50 .51 .49 .49 .65 .54

Men and boys ............................................ .59 .56 .51 .50 .51 .52 .51 .49 .71 .56

Women and girls ........................................ .59 .64 .61 .56 .54 .55 .54 .57 .66 .58

Children under 2 years .............................. .92 .96 .87 .82 .71 .84 .82 .83 1.10 .87

Footwear .................................................... .76 .79 .81 .70 .72 .80 .70 .71 .69 .74

Other apparel ............................................. .29 .36 .35 .32 .33 .28 .27 .25 .48 .33

Transportation ............................................ .73 .82 .77 .77 .76 .75 .77 .77 .89 .79

Vehicle purchases ..................................... .90 1.05 .95 .94 .97 .97 .98 .96 1.11 1.00

Gasoline and motor oil ............................... .82 .89 .88 .92 .85 .82 .84 .86 .99 .87

Other vehicle expenses ............................. .51 .53 .54 .51 .49 .47 .49 .49 .57 .53

Maintenance and repairs ........................... .48 .48 .49 .45 .44 .40 .42 .43 .56 .48

Vehicle rental and other............................. .59 .65 .66 .65 .61 .65 .65 .62 .59 .64

Public transportation .................................. .54 .71 .58 .58 .51 .50 .52 .54 .60 .57

Entertainment ............................................. .50 .56 .55 .52 .51 .49 .49 .52 .64 .54

Fees and admissions ................................. .50 .52 .51 .49 .47 .49 .48 .47 .69 .51

Televisions, radios, sound ......................... .57 .61 .61 .56 .59 .56 .58 .59 .66 .61

Pets, toys, and playground ....................... .52 .55 .52 .50 .50 .46 .45 .48 .68 .52

Other entertainment ................................... .39 .54 .56 .50 .44 .41 .39 .49 .52 .46

Personal care ............................................. .56 .70 .68 .50 .50 .67 .57 .62 .67 .60

Reading ...................................................... .39 .41 .41 .40 .38 .34 .33 .34 .55 .41

Tobacco products, etc. .............................. .52 .52 .52 .50 .45 .44 .40 .40 .65 .49

Miscellaneous ............................................ .21 .22 .22 .19 .19 .15 .16 .17 .29 .20

 Published title 1985 1986 1987 1988 1989 1990 1991 1992

1 CE-to-PCE ratio, 1984–2002, for the categories in table 20 of Consumer Expenditure Survey, 1998–1999, p. 37.

Appendix table C–1. Continued— CE-to-PCE ratios of aggregate expenditures, historical methodology1

1984–

91

1992–

2002

 [In millions of dollars]

 Raw aggregates

 PCE categories

PCE CE CE-to-PCE ratio

 Total durables, nondurables, and services ...................... $7,376,059 $4,457,246 0.60

..............................................................................................................

Durable goods ....................................................................................... 916,170 693,653 .76

Motor vehicles and parts ................................................................... 426,144 436,625 1.02

New autos ....................................................................................... 101,649 111,924 1.10

Net purchases of used autos ......................................................... 58,392 112,513 1.93

Other motor vehicles ...................................................................... 215,387 195,506 .91

Trucks, new and net used ........................................................... 203,461 183,394 .90

Recreational vehicles .................................................................. 11,926 12,112 1.02

Tires, tubes, accessories, and other parts ................................... 50,716 16,682 .33

Furniture and household equipment .................................................. 319,917 180,432 .56

Furniture, including mattresses and bedsprings ............................ 68,288 46,171 .68

Kitchen and other household appliances ....................................... 31,537 33,666 1.07

China, glassware, tableware, and utensils .................................... 31,843 8,660 .27

Video and audio goods, including musical instruments, and

computer goods .......................................................................... 119,062 51,134 .43

Video and audio goods, including musical instruments .......... 74,898 33,617 .45

Computers, peripherals, and software ..................................... 44,164 17,517 .40

 Other durable house furnishings (for example, floor coverings,

 clocks, lamps, and furnishings; blinds, rods, and other; writing

 equipment, handtools, tools, hardware, and supplies) ............. 69,187 40,801 .59

Other durable goods .......................................................................... 170,109 76,596 .45

Ophthalmic products and orthopedic appliances ........................... 21,642 8,122 .38

Wheel goods (including bicycles and motorcycles), sports (also

 includes guns) and photographic equipment, boats, and

 pleasure aircraft ......................................................................... 60,559 43,976 .73

Jewelry and watches ...................................................................... 51,039 11,577 .23

Books and maps ............................................................................. 36,869 12,921 .35

See notes at end of table.

1

1

Appendix table D–1. Comparison of 2002 aggregate Consumer Expenditures with Personal Consumption Expenditures

 based on 1997 PCE benchmark

1

1
Monthly Labor Review September 2006 45

 [In millions of dollars]

 PCE categories

Nondurable goods ................................................................................. 2,080,101 1,212,863 .58

Food ................................................................................................... 1,005,828 659,973 .66

Food purchased for off-premise consumption ............................... 615,603 389,640 .63

Alcoholic beverages purchased for off-premise consumption ...... 75,461 25,497 .34

Purchased meals and beverages ................................................... 380,021 267,770 .70

Alcoholic beverages in purchased meals ...................................... 40,591 16,487 .41

Food supplied to employees: civilians ........................................... 9,052 2,563 .28

Food supplied to employees: military ............................................. 676 (2

) ...

Food produced and consumed on farms ........................................ 476 (

2

) ...

Clothing and shoes ............................................................................ 302,114 170,775 .57

Shoes .............................................................................................. 49,281 34,960 .71

Women’s and children’s (girls’ and infants’) clothing and

accessories, except shoes ........................................................ 149,204 87,889 .59

Men’s and boys’ clothing and accessories, except shoes ............ 92,586 45,769 .49

Standard clothing issued to military personnel .............................. 343 (

2

) ...

Sewing goods for males and females ............................................ 6,501 1,486 .23

Luggage for males and females ..................................................... 4,199 671 .16

Gasoline, fuel oil, and other energy goods ...................................... 177,467 148,800 .84

Other nondurable goods .................................................................... 594,692 233,315 .39

Tobacco products ........................................................................... 89,122 35,668 .40

Toilet articles and preparations ...................................................... 54,154 31,144 .58

Semidurable house furnishings ...................................................... 37,390 16,258 .43

Cleaning and polishing preparations, and miscellaneous

household supplies and paper products ..................................... 66,636 46,275 .69

Drug preparations and sundries ..................................................... 213,034 57,980 .27

Nondurable toys and sport supplies .............................................. 58,955 16,107 .27

Stationery and writing supplies ...................................................... 18,077 14,609 .81

Net foreign remittances .................................................................. 4,035 (

2

) ...

Magazines, newspapers, and sheet music .................................... 35,273 9,108 .26

Flowers, seeds, and potted plants ................................................ 18,016 6,166 .34

........................................................................................................

Services ................................................................................................ $4,379,788 $2,550,730 0.58

 Housing and household operations .................................................. 1,553,754 1,647,839 1.06

Owner-occupied dwellings .............................................................. 832,479 1,014,126 1.22

Rent and utilities, excluding telephone .......................................... 466,483 424,634 .91

Tenant-occupied nonfarm dwellings ............................................ 258,677 240,872 .93

Electricity ..................................................................................... 111,748 109,987 .98

Gas .............................................................................................. 40,838 36,967 .91

Water and other sanitary services ............................................. 55,220 36,808 .67

Other lodging .................................................................................. 53,633 37,333 .70

Telephone and telegraph ................................................................ 128,259 107,258 .84

Domestic service ............................................................................ 16,754 8,958 .53

Other household operations (for example, moving and

storage, household insurance, rug and furniture cleaning,

electrical repair, reupholstery and furniture repair, postage,

household operation services not elsewhere classified)............ 56,146 55,530 .99

Transportation .................................................................................... 287,990 252,818 .88

Repair, greasing, washing, parking storage, rental, and leasing .. 185,992 107,196 .58

Bridge, tunnel, ferry tolls ............................................................... 5,829 1,624 .28

Insurance ........................................................................................ 45,842 100,168 2.19

Mass transit systems ..................................................................... 9,000 7,266 .81

Taxicab ............................................................................................ 3,384 2,833 .84

Railway ............................................................................................ 573 1,804 3.15

Bus .................................................................................................. 2,336 1,287 .55

Airline .............................................................................................. 28,113 27,306 .97

Other (including water passenger; passenger transportation

arrangement; limousine service; other local transportation;

part of Amtrak passenger, trucking, and courier services,

except air) .................................................................................... 6,921 3,334 .48

See notes at end of table.

1

1

1

1

1

1

1

1

Appendix table D-1. Continued—Comparison of 2002 Aggregate Consumer Expenditures with Personal Consumption

 Expenditures based on 1997 PCE benchmark (not adjusted for population differences)

1

1

1

1

1

1

1

 Raw aggregates

PCE CE CE-to-PCE ratio
46 Monthly Labor Review September 2006

CE and PCE

Medical care ....................................................................................... 1,210,272 197,331 .16

Physicians ...................................................................................... 278,304 16,539 .06

Dentists .......................................................................................... 72,162 25,447 .35

Other professional services ........................................................... 189,695 13,164 .07

Hospitals ......................................................................................... 477,141 9,875 .02

Nursing homes ................................................................................ 96,873 1,397 .01

Health insurance .............................................................................

Medical care and hospitalization health insurance .................... 79,721 130,909 1.64

Income loss insurance ................................................................ 1,999 (3

) ...

Workers’ compensation ............................................................... 14,377 (

3) ...

..............................................................................................................

Recreation .......................................................................................... 299,556 151,663 .51

Admissions to all events ................................................................ 34,583 21,888 .63

Motion picture theaters, theatre, opera, and entertainment ...... 21,091 16,129 .76

Spectator sports ......................................................................... 13,492 5,759 .43

Radio and television repair ............................................................. 4,034 360 .09

Clubs and fraternal organizations .................................................. 21,051 12,098 .57

Commercial participant amusements ............................................. 78,332 21,032 .27

Parimutuel net receipts .................................................................. 5,314 5,491 1.03

Other (including pets and pet services, excluding vets;

veterinarians; cable TV; film developing; photo studios;

sporting and recreational camps; high school recreation;

lotteries; videocassette rental; commercial amusements not

elsewhere classified) ................................................................... 151,075 90,794 .60

Personal care ..................................................................................... 92,893 43,015 .46

Cleaning, storage, and repair of clothing and shoes .................... 15,784 13,501 .86

Barbershops, beauty parlors, and health clubs ............................ 41,637 27,893 .67

Other (including watch, clock, and jewelry repair; miscellaneous

personal services) ...................................................................... 35,472 1,621 .05

Personal business ............................................................................. 552,124 40,022 .07

Brokerage charges and investment counseling ............................ 75,694 (2) ...

Bank service charges, trust services, and safe deposit

box rental .................................................................................... 75,502 3,652 .05

Services furnished without payment by financial intermediaries

except life insurance carriers .................................................. $193,684 (

2

) ...

Expense of handling life insurance and pension plans .............. 84,750 (

2

) ...

Legal services ............................................................................. 71,258 14,910 .21

Funeral and burial expenses ....................................................... 14,633 10,534 .72

Other personal business (including labor union expenses,

professional association expenses, employment agency

expenses, money orders, classified ads, tax return

preparation services, personal business services not

elsewhere classified) ................................................................ 36,603 10,926 .30

Education and research ................................................................. 190,736 93,658 .49

Higher education ......................................................................... 103,853 52,716 .51

Nursery, elementary, and secondary schools ............................ 38,310 38,080 .99

Elementary and secondary schools ........................................ 28,188 14,455 .51

Nursery schools ....................................................................... 10,122 23,625 2.33

Other education and research .................................................... 48,573 2,862 .06

Commercial and vocational schools ........................................ 33,259 (

3

) ...

Foundations and nonprofit research ........................................ 15,314 (

2

) ...

Religious and welfare activities ..................................................... 202,882 124,384 .61

All contributions, including religion (not a PCE category) ........... ... 110,900 ...

Political organizations ................................................................. 4,149 (3

) ...

Museums and libraries ................................................................. 8,524 (

3

) ...

Foundations to religion and welfare ............................................ 11,842 (

3

) ...

Social welfare .............................................................................. 125,853 13,484 .11

Childcare ................................................................................... 30,319 7,107 .23

Social welfare (including membership organizations,

job training and vocational rehabilitation services, residential

care, individual and family services, social services not

elsewhere classified, civic-social-fraternal associations) ... 95,535 6,377 .07

Religion ........................................................................................ 52,514 (

3

) ...

Net foreign travel ............................................................................ –10,418 (

3) ...

[In millions of dollars]

1

 PCE CE CE-to-PCE ratio

 Raw aggregates

Appendix table D-1. Continued—Comparison of 2002 aggregate Consumer Expenditures with Personal Consumption

 Expenditures based on 1997 PCE benchmark

1

1

1

1

1

 PCE categories

3

 The CE survey does not collect data at the indicated level of detail for

this category.

1 Comparable CE and PCE categories. 2 Category not within the scope of the CE survey.