CONSUMER EXPENDITUR

SURVEYS

“Overview and Recent Developments in the ConsumExpenditure Surveys”NBER July 22

-23, 2002

July 22 23, 2002
Outline

O i verv ewRecent ResearchData ComparisonsRecent Developments Recent DevelopmentsCurrent/Future Research
The survey is designed to 

represent a represent

a

National Probability Sample National Probability Sample

– using the most recent decennial census

augmented by new construction permiaugmented by new construction permi

– consisting of primary sampling units (P– b d b biliti ti l t base

d on pro

b

abilities proportiona

l

to 

population size

– consists of counties group of counties 

consists of counties, group of counties

independent cities
Housing Units are selected Housing Units are selected...

Within each PSU using such inform

as:

– vacancy status – number of persons residing in housing 

number of persons residing in housing 

– value of the housing unit– rent paid for the housing unit rent paid for the housing unit

Definitions

CE i i d i d i i CE is interested in determining cons

units - based on the financial relation

th b f th h h ld the members of the household.
How do we define 

Consumer Units? Consumer Units?

 Memb f h h ld l d b bl d i 

bers o

f a 

house

h

old re

late

d

by bloo

d, marr

iage, 

or other legal arrangement

 Single person living alone or sharing a household wit

but who is financially independent

 Two or more persons living together who are financi

dependent
How does this compare to oth

How does this compare to oth

SIPP d CPS h h ld SIPP an

d CPS use a 

house

h

old

definition... All persons who occ

h i it ous

i

n

g unit
Although we have slightly different Although we have slightly different

definitions - the CE based on the fin

relationship between members relationship between members -- the

difference between consumer unit an

housing unit is small About 3% of housing unit is small. About 3% of 

housing units contain more than one 

consumer unit consumer unit.
Respondent

 CE - One person responds for the entire consum

One person responds for the entire consum

We ask for the person most knowledgeable of expenditures for the entire consumer unit

 CPS - One person, preferably most knowledgeab

the labor force activities of the others the labor force activities of the others.

 SIPP - A sep q arate questionnaire is administered 

member over age 15
Reference Person Reference Person

All h h i il d fi 

All t

hree surve

ys 

have a s

i

milar 

d

efi

the person or one of the persons who 

or rent th it ts the unit.
Survey Instruments Survey Instruments

 Diary

 Interview

– 2 consecutive 1-week– includes

 Interview

– 5 quarterly, o

inventor

y an

includes

» detailed expenditures 

for food, personal care, 

household supplies

y

sample data 

– excludes exp

for: household supplies

expenditures

– excludes

di f

f

for:

» housekeepi

(e.g., posta

» expenditures 

for out-o

ftown trips

»

personal ca

» non-prescri
Socio-demographic Variables demographic Variables

Collected during each interview Collected during each interview

– Member level – C il l onsumer unit level

» reference person» CU

Collected 2nd and/or 5th interview Collected 2nd and/or 5th interview

– Income, work experience, contribution
Publication Tables Publication Tables

 are

“integrated

”

– Neither survey collects the entire unive

expenditures. 

– Some data are only collected in one in

– S d t ll t d i b th i t 

Some 

d

a

ta are collec

t

e

d

in 

b

oth

ins

trum

– For these areas we determine which is 

source and use that in our publications source and use that in our publications
Both the Interview and Diary sample

Both the Interview and Diary sampl

purposely non-clustered

P hh h h l 

Past research has shown that cluster

samples for expenditure data would 

yi ld di e expenditure patterns that are 

representative of the entire area

Clustered samples tend to cut down 

travel expenses and hours per schedu
Let’s look at sample size Let’s look at sample size

Census uses the term Census uses the term

“cases

” when

referring to its collection workload a

costs.

A Case is defined as one interview o

di i i ar

y v

i

s

it.

For households with more than one 

consumer unit, each consumer unit wbe counted separately
Let’s look at some Census fig

Let’s look at some Census fig

In order to collect the equivalent of 7

In order to collect the equivalent of 7

households completing 5 interviews 

diaries we must field about diaries, we must field about

60,000 cases for Interview

and

25,000 cases for Diary
How does this translate to 

households?

60,000 represents the size of the samp

p y rior to an

y refinement.

About 1/5 of these cases are Interview 

the bounding interview the bounding interview

The field representatives refine the sa

to determine those housing units that to determine those housing units that 

out of scope of our survey
Once eligible households are determin

the field rep p resentatives attempt to colthe data. 

As in every survey they encounter ref

As in every survey they encounter ref

The result is the number of completed 

that can be used to determine expendithat can be used to determine expendi
Let’s do the math Let’s do the math...

 Total Cases 60,000 B di I t i Bounding 

I

n

terv

iew 12 000 ,

– equals 48,000

 O fS ut o

f

Scope 8 800 ,

 Refusals 8,000

Net Sample Yiel

d 31,200

Thi l b 7800This trans

lates to a

bout 7800 consumer 
In Comparison In Comparison

CE fields about 60,000 Interview ca

25 000 Di 25,000 Diar

y cases eac

h

year

SIPP fields about 129,000 cases eacCPS fields about 875,000 cases each 
Average Time per Case Average Time per Case

CE

– Diary 3.1 hours

– Interview 4.0 hours

SIPP 3.65 hoursCPS 1 3 hours 1.3 hoursAll hours include travel time
Census Budgets Census Budgets

CE $24 653 000 $24,653,000SIPP

$31,400,000

CPS $55,000,000
Cost per Case Cost per Case

CE $290 00 $290.00SIPP $193 00 $193.00CPS $65 00 .
Response Rates

82%

Response Rates

80%76%78%72%74%

1997 1998 1999 2000 2001

Interview Diary
How many households completed al

How many households completed al

interviews?

 ab 75% out 75%

How many households completed bo

diaries?

 about 92%
Outline

Research using Interview, “four 

quarter”, complete income repor

Importance of attrition Importance of income Importance of income

– New bracketing procedure

Quality of global questions Quality of global questions

– Interview vs. Diary 
Attrition in the Interview surve

Attrition in the Interview surve

Structure of Interview Survey Structure of Interview Survey

– up to five interviews; four expenditure – quarterl d i d d i h d

ly 

data 

i

n

depen

dent, we

i

g

hts ad

Many researchers use “four quarter” 

– adjust for age and tenure

Recent stud

y examined 1997-2000

– With a 2nd through 5th interview– Accounted for type of non-interview
Percent of CUs who complete all 

inter ie s 1984 inter

vie

w

s, 1984

-2000

90%70%80%40%50%60%10%20%30%

0%

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

199

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1
Probability of completing next 

i t i f th l ti 2 d i

n

terv

iew 

for those comp

l

eting 

2

n

d

94928890848682

Complete 3rd interview Complete 3rd and 4th Compl
Fo r q arter CUs s non Fo

u

r

q

uarter CUs v

s. non

-inter ie 

inter

vie

Four quarter Four quarter At leas

CUs

At leas

non-inte

Average age Average age 50.6 40.Percent home-owner 83.2% 41.0Average size 2.6 2.3Average quarterlyexpenditures

$8,981 $7,5

Average per-capitaexpenditures

$3,442 $3,2
Family type composition Family type composition

30%35%40% Four quarter CU's

At least one non-interview

20%25%30%10%15%

0%5%

Married with Other married Sin

gle 

parents Sin

gles O

children families

g p
CUs ho ret rn after an initial ref 

CUs who ret

urn after an initial ref

60%50%30%40%10%20%

0%

1st refusal in 2nd interview 1st refusal in 3rd in1st refusal in 4th interview Total
Next steps Next steps

Continue to examine Continue to examine “intermittent intermittent”

responders

E i xam ne non-respond f 1i 

ders for 1st inte
The use of brackets in collectin

income data income data

Structure of income component Structure of income component

– 5 member level income sources; 14 CU le– 2 d d 5 h i i l ll 2

n

d an

d

5

t

h

interv

iew, annua

l recall

– many missing

Man

y researchers use complete income 

Conducted stud

y g of usin

g brackets

– cognitive results suggested use of ranges– Data 

generated ran

ges

g g

– Initiated brackets in April 2001
Percent of CUs with missing CU 

income sources 2001 (April income sources, 2001 (April - De

907080405060 No mi

one m2 miss

203040

2 miss3 or m

0

10
Reporters and Use of Brackets, se

CU le el income so rces 2001 CU le

vel income so

urces, 2001

100%

80%40%60%

0%

20%

k 

Percent who report receipt of source Percent of reporters with actP t f t i b kt P t ii

Interest Pensions Wor

ke

Percent o

f reporters using 

brac

k

ets

Percent missin

g
Distribution of Interest income

Actual vs bracket 2001 Actual vs. bracket, 2001

806070

Actual

304050 Bracket

0

1020

< 1000

1 - 2000

2 - 3000

3 - 4000

4 - 5000

5 - 10000

10 - 15000

15 - 20000

20 -30000

30 - 40000

40 - 50

1

1

3

4
Reporters and use of brackets for 

salar income 2001 salary income, 2001

100%

80%40%60%20%

0%

Percent who report receipt of salary Percent of reporters with a

Reference person Spouse Oth

Percent who report receipt of salary Percent of reporters with aPercent of reporters using brackets Percent missing
Distribution of Salary Income, 

Actual vs bracket 2001 Actual vs. bracket, 2001

1520

ActualBracket

10

05

< 5000

5 - 10,000

10 -15,000

15 - 20,000

20 - 30,000

30 - 40,000

40 - 50,000

50 - 70,000

70 - 90,000

90 - 120,09
Percent complete reporters and 

average income by quarter average income, by quarter

0 9 

0.85

0.90.8 

0.75 

0.7

I 

2000

II 

2000

III 

2000

IV 

2000

I 

2001

II 

2001

III 

2001

IV 

2

Percent complete reporters FINCBTAX
Next steps Next steps

Examine effect on complete reporter

Examine effect on complete reporter

total income

E i h ff Examine the effect on response

– Do responders use brackets more often

Consider using brackets for Assets a

Liabilities

Income imputation
Global s Detail Food E pendit 

Global v

s. Detail Food

E

xpendit

u

Interview vs Diary Interview vs. DiaryUse Diary in published tablesGlobal questions on both

– what has been your usual weekly expense 

grocery store or supermarket?

– About how much of this amount was for n

items?
Trend in ratios Global vs Deta

Trend in ratios, Global vs. Deta

1 31.21.3

1

1.10.9

1993 1994 1995 1996 1997 1998 1999 

Battistin (Interview Global/Diary Detail)Interview Global/Diary GlobalDiary Global/Diary DetailDiary Global/Diary Detail (no recalls)
Comparison of Food-at-home glob

q estions 1999 q

uestions, 1999

6,0008,0004,000

0

2,000

All One person Two persons Three persons Four persons 

CE - Interview CE -diary CE - Interview CE -diary 
Equivalent Interview Food-at-home expen

( )C S global

); 

CE vs. P

SID by age cohort, 1999

350025003000100015002000

CE - Food at homePSID - Food at home

0

500

1000

0 5 6 10 11 16 21 26 31 36 41 46 51 56 61 66 

PSID Food at homeCE Food at home - with non-Groceries

0-5

6-10 11-

15

16-

20

21-

25

26-

30

31-

35

36-

40

41-

45

46-

50

51-

55

56-

60

61-

65

66

70

Age o

NOTE U “f t ” CU d dj t i ht b d tNOTE: 

Use “four quar

ter

” CUs an

d adjus

t weights 

by age an

d

tenure.

Expenditures are adjusted using equivalence scale of square root of famAllocate equivalent expenditures to all members of CU.
Next steps Next steps

Examine the diary global and detail Examine the diary global and detail

questions

R ll C l Recall vs. CompleteContinue comparison of CE and PSINew Diaries
C i CE E dit Compar

ing CE

Expenditu

Estimates with Data from OEstimates with Data from O

Sources

T i i fl To mon

itor cons

istency of resu

lts

and 

To help identify areas where CE data co

and methods mi

ght be improvedg p
Issues to Consider Issues to Consider

Account for differences in content o

Account for differences in content o

concept (focus on components)

– can b il d e reconcil

e

d

– cannot be reconciled

Source of data

– Household survey– Census– Administrative– Trade association publications 
CE Interview/American Housing 

Survey Ratios Survey Ratios b d M di base

d on 

M

edians

0 81.01.20 40.60.80.00.20.40.0

Market

value of

owned

home

Mortgage

principal

and interest

Property

taxes

Property

insurance

Rent

home
CE Diary/Progressive Grocer Rat

based on Aggregates

3.54.02.02.53.01.01.5 0.00.5

Total food Fresh fruits

& vegs

Non-alc

beverages

Fish &

seafood

& vegs. beverages seafood
CE Interview/MEPS Interview Health 

Insurance Premiums Insurance Premiums bd A t ase

d on 

Aggrega

tes

1.01.20 40.60.80.00.20.4

1996

Private Non-employerEmployer hosp/phys

-family Employer hosp/phys

Employer hosp/phys family Employer hosp/phys 
CE Integrated/Personal Consumpt

E pendit res Ratios E

xpendit

ures Ratios bd A ase

d on 

Aggregat

1.001.200.600.800.200.40 0.00

Apparel Food Gasoline Rented

dwellings

Vehicle

purchases
Attention on CE and PCE Attention on CE and PCE

Definitions of populations and expen

Definitions of populations and expen

Data sources and periodicityTrends over time in ratios 

– CE/PCE aggregates

Example for total expenditures with 

adjustments for select differences

BLS

-CE Project: focus of one comm

BLS CE Project: focus of one comm

group
Populations

 CE: consumer units consumer units  PCE: persons res

and persons

– Civilian non-institutional 

 PCE: persons res

– Individuals

» Persons resident in 

th h h i 

population and some institutional

– Continental U.S., Alaska, 

those who physica

U.S. and have resito reside in U.S. fomore

and Hawaii

– Urban and Rural

» Employees of U.S

abroad for 1 year o

» U.S. government c

military personnel abroad regardless 

– Nonprofit institution

i di id lindividuals
Definitions

 CE  PCE

– What consumers spend: 

transaction costs including

 PCE

– Value of goods and 

purchased by the per

t ( ld it 

g excise and sales taxes of 

goods and services acquired during reference period

sector (excludes intr

transactions) includeand sales taxes 

» Spent by individu

– Primarily out of pocket 

expenditures (OOP) reported by consumers plus 

p y

» Operating expens

nonprofit institutiindividuals

» Value of food fue

in kind food and rent as pay, and value of food stamps

Value of food, fue

rent of dwellings, financial services kind by individua

purchases of used purchases of used 
Data So rces and Periodicit Data So

urces and Periodicit

y

 CE

 PCE

– Household Surveys

» Interview

 PCE

– Sources

» Statistical reports primaril

» Interview Bureau (e g Censuses of » Diary 

– Periodicity 

Bureau (e.g., Censuses of 

Wholesale Trade, Retail TIndustries)

» Government administrativ

regulatory agency reports » Annual

» Quarterly» Monthl

y

regulatory agency reports

» Reports from private orga

(trade sources)

y

– Periodicit

y

» Weekly » Benchmark (detailed)

» Annual» Quarterly» Monthly
Comparison of the CE/PCE R

Over Time (1984-97) for 

Selected Categories Selected Categories

Using PCE data based on the 1987 

and 1992 Benchmark Estimates 
Trends in CE/PCE Ratios Trends in CE/PCE Ratios

Linear regressions using the Linear regressions using the 1987

benchmark PCE estimates are depicred ( ) red

(

)

Linear regressions using the 1992

b h k PCE i d i benc

hmar

k PCE est

imates are 

dep

ic

yellow ( )
Expenditure Categories Groupe

U

si 1992 B h k T d ing 1992

Benc

hmar

k

Tren

d

s

 Stable

– slope coefficient is 

close to zero 

(+ or -

)

 Stable: Addition

(

)

– Hi

gh 

 Decreasing

– slope coefficient is 

g

» CE/PCE >= 1.0

– CE Moderately 

0 75 CE/PC

negative

 Increasing

»

0.75 <= CE/PC

– CE Even Lower

» CE/PCE < 0.75

– slope coefficient is 

positive
I A Stable High Ratio I. 

A. Stable, High Ratio

Vehicle Purchases

1.20.8

1

0.40.60.2

84 85 86 87 88 89 90 91 92 93 94 95 96 
I B Stable Mid Ratio I. 

B. Stable, Mid Ratio

Total Food

1.2

Rent, Utilities, and Pub

1.2

0.8

1

0.8

1

0.40.6

0.40.6

0.2

84 86 88 90 92 94 96

0.2

84 86 88 90 92 
I B Stable Mid Ratio I. 

B. Stable, Mid Ratio

Televisions, Radios, Sound Equipment

1.20.8

1

0.40.60.2

84 85 86 87 88 89 90 91 92 93 94 95 96 
I C Stable Low Ratio I. 

C. Stable, Low Ratio

Public Transportation Tobacco Prods. & S

1

1.11.2

1

1.11.2

0.70.80.9

1

0.70.80.9

1

0.30.40.50.6

0.30.40.50.6

0.20.3

84 86 88 90 92 94 96

0.20.3

84 86 88 90 9
II Decreasing II. Decreasing

Food Away From Home Alcoholic Bevera

1

1.2

1

1.2

0 60.8 0.80.40.6

0.40.6

0.2

84 86 88 90 92 94 96

0.2

84 86 88 90 92 
II Decreasing II. Decreasing

Apparel and Services Other Apparel 

1

1.2

Other Apparel 

1

1.2

0 60.8

1

0.8

1

0.40.6

0.40.6

0.2

84 86 88 90 92 94 96

0.2

84 86 88 90 92 
III Increasing III. Increasing

Footwear

1.20.8

1

0.40.60.2

84 85 86 87 88 89 90 91 92 93 94 95 
Sample Comparison of Aggregate 

C C E vs. PCE

PopulationsIn PCE but out of scope for CE In PCE but out of scope for CEIn CE but out of scope for PCEP l f f CE ( Partly out of scope for CE (e.g., non-p

institutions serving households and em

payments)

Components operationally defined diff
In PCE but Out of Scope for C

In PCE but Out of Scope for C

 Population - Persons resident in U.S.

– Employees of U.S. businesses working abroad a

government and military personnel stationed ab

– Military living on Military living on

-base in the U S base in the

U.S.

– All persons in institutions and the homeless for 

expenditures are made

– Non-profit institutions serving households 

 Expenditures 

– Value of home production for own consumption 

– Standard clothing issued to military

S i f i h d ith t t b fi i 

–

Serv

ices 

furn

i

s

h

e

d withou

t paymen

t

by financ

i

a

intermediaries except life insurance carriers
In CE but Out of Scope for PCE In CE but Out of Scope for PCE

Expenditures

– Transaction from household to household 

used vehicles purchased from another CU) used vehicles purchased from another CU)

– Social Security contributions
Partly Out Of Scope For CE and 

Partl Defined Q ite Differentl Partly Defined

Q

uite Differentl

y

Health Care Expenditures Health Care Expenditures

– CE medical care OOP; PCE medical care expendit

by households, insurance companies, employers, aby households, insurance companies, employers, aprofits (=current expenditures of non-profits+paympatients to profit and government facilities)

Reli

gious and Welfare

– CE cash contributions; PCE religious and welfare 

i l di hild (f fit t inc

l

uding child care (for nonprofits=curren

t expen

of receipts for commodities; for profit and gov’t=rfrom users) 
Defined Quite Differently Defined Quite Differently

 Education Expenditures

– CE ed cation OOP CE ed

ucation OOP

– PCE education and research expenditures made by househo

profit and non-profit institutions serving households (for pri

expenditures net of receipts for meals etc and for gov’t stuexpenditures net of receipts for meals, etc. and for gov’t

=stu

payments; fees paid to other schools plus current expenditur

 Life Insurance and Pension Plans

– CE premiums paid and consumer contributions OOP– PCE expense of handling: operating and administrative exp

premiums paid net of benefits and dividends profits of sompremiums paid net of benefits and dividends, profits of som

 Owner-Occupied Housing Expenditures

– CE expenditures for owner occupied housing (interest and 

CE expenditures for owner occupied housing (interest and 

property taxes, maintenance and repairs, and other expenses

– PCE imputed space rent
Agg g re ate and Ratio Compari

Source Original

($billions)

Expenditure

“Comparable”

($billions)

F

“Com

($b

ConsumerExpenditures

$2,985 $2,069

(0.69)

$2

(0

PersonalConsumptionExpenditures

$4,211 $2,553

(0.61)

$3

(0

Ratio CE/PCE 0.71 0.810 0
Reasons for Differences Reasons for Differences

 Overall

– Populations differ– Expenditures defined differently– Items in scope versus out of scope– Sources of data differ (household survey vs. business 

reports)

– Expert judgement– Proxy response

 Component

– Content 

 Trends

– Benchmarks and adjustments each year between benc
Analytical Example Analytical Example

1992 E dit f 1992

Expenditures 

for 

Footwear in the CE and PCFootwear in the CE and PC
Rationale for Year and Item Categ

Rationale for Year and Item Categ

Why 1992? Why 1992?

– Data are available at finer level of item detai– Data represent latest benchmark year Data represent latest benchmark year

Why footwear? Why footwear?

– Apparel of which footwear is a component is 

cate

g y or

y where the difference in CE and PCE 

is large and increasing

– Footwear has a small number of component 

both CE and PCE and is th s easier to handleboth CE and PCE and is th

u

s easier to handle
Expenditures for footwear, total and by 

maj it t 1992 CE d PCE jor item ca

t

e

gor

y, 1992 CE an

d PCE

Annual expenditur

Item category (millions of dollarCE Total

Men’s footwear

$23,124

$

Boys’ footwear

Women’s footwear

Girls’ footwear

1

PCE Total

Men’s footwear, except athletic 

Women’s footwear, except athletic

$32,903

$

House slippers Rubber and plastic Footwear, except rubber, n.e.c.Used footwearBoot and shoe cut stock and findings
Derivation of CE Estimates Derivation of CE Estimates

 Diary survey is the source for all footwear 

though both Interview and Diary collect expendit f f t ditures 

for 

foo

twear.

 Individual expenditure reports originate in 

ways.

– Directly reported by respondent– Allocation of expenditures where respondent r

Allocation of expenditures where respondent r

expenditure for a combination of items

– Imputation of expenditures where respondent

acknowledges purchase, but does not provide 
Derivation of PCE Estimates Derivation of PCE Estimates

 Process uses data created for preparation o

output accounts for U. S.

 The benchmark purchase value of goods an

services is calculated to determine allocabservices is calculated to determine allocaboutput.

 Total purchase value is allocated among

intermediate and end users.
Amount of value added to total footwea

esti t b f t 1992 PCE tima

te by

fac

tor, 1992 PCE

Factor

Value added

(millions of dollars) (millions of dollars)

Total $32,903

Basic value

Wholesale margin

$14,926

Wholesale margin 3 371Transportation costWholesale taxes

3,371

121

11

Retail marginRetail taxes

13,153

1,321
Production and allocation of footwear, 199

I/O A ( I/O

Accounts 

(

Millions of dollars)

Basic 

l

Whole.

i

Trans. Comm & 

h l

Retail 

i

Production value margin cost w

h

ole. taxes margin 

Shipments Adjustments: 

Secondary production 1

4,727

Nonemployer receipts Filer misreporting 

receipts 

Nonemployer

misreporting receipts 

992 21

Adjusted shipments 4,748 3,589 143 12 13,153 Less: Balancing Record 201 7 8 0 0 

Allocable shipments 4,547 3,582 135 12 13,153 

Imports 11 638

Adjustments:

Census re-exports NIPA territorial adj. to imports 

11,638

-87

204

Allocable imports Allocable imports 11,755 Allocable shipments & imports 16,302 3,582 135 12 13,153 
Production and allocation of footwear, 199

I/O Accounts 

– cont. 

(

Millions of dollars)

Allocation of Production

Basic 

value

Whole.

margin

Trans. 

cost

Comm & 

whole. taxes

Retail 

margin

R

t

Exports

I di d i

603159

109

6

64

00

Intermediate pro

duction 

Government purchases – FederalGovernment purchases – State & localOther nondurables purchasesChan

ge in intermediate 

goods 

159

11

147

1

6180

4020

0000

g g

inventories

Unspecified costsChange in wholesale inventoriesChange in retail inventories

313041

314

21

1368

0002

0001

PCE Military ClothingPCE Footwear

39

14,926

3

3,371

0

121

0

11

0

13,153

16,302 3,582 135 12 13,153 
Evaluation of CE and PCE Estim

of CE and PCE Estim

Standard errors and confidence 

intervals

Expert judgment Expert judgmentContent difference in component 

categories
Standard error and 95% confidence int

f t t l f t dit 1992 Cfor 

t

o

t

a

l

foo

twear expenditures, 1992 C

It

Value

em ( illi f d ll ) (

millions o

f

d

ollars

)

Total footwear $23,124Standard error Standard error 1 145 ,95% confidence intervals

U li it Upper li

mit $25 368 $25,368

Lower limit $20,880
Expert Judgment Expert Judgment

Data adjustment in CE 

– Allocation procedures Allocation procedures– Imputation procedures

Trade margin calculation in PCE

– Wholesale – Retail
Impact of allocation procedures on 

foot ear estimates 1992 CE foot

wear estimates, 1992 CE

Item

Total 

expenditure

Allocated 

expenditure % Al

Total footwear Total footwear $23 124 $23,124 $2 617 , 

Men’s 7,182 692 

Boys’ 3,050 674 

Women’s 10,828 938 

Girls’ 2,064 313 
Calculation of Wholesale Trade Marg

PCE E ti t PCE

E

stima

tes

 Initial margin estimate is computed for 

wholesalers whose primary business is foo

– Total sales receipts and the cost of purchases o

footwear are obtained from Census of Wholesa

(CWT).

– Misreporting adjustments are made to sales rec

and the cost of purchases from IRS and other dand the cost of purchases from IRS and other d

– Changes in the value of inventories held at beg

and end of year are added from CWT and Ann

TdSTra

de 

Survey.
Calculation of Wholesale Trade Marg

PCE E ti t PCE

E

stima

tes 

– con

t.

 Margin estimate for wholesalers whose pri

business is footwear is adjusted to account f t ac

tors.

– These wholesalers may also trade in other busi– Wholesalers whose primary business is not foo

Wholesalers whose primary business is not foo

may also have footwear operations.

 CWT d d di i i h b f CWT

data 

do not dist

ingu

i

s

h

between 

foot

and non-footwear operations in either case
Calculation of Wholesale Trade Marg

PCE E ti t PCE

E

stima

tes 

– con

t.

 A harmonization procedure is used based o

A harmonization procedure is used based o

receipt data which is available for all businengaged in footwear trade.

– Trade margin rate (wholesale trade margin / sales receip

calculated for wholesalers whose primary business is fo

– The trade margin rate is applied to footwear sales receip

The trade margin rate is applied to footwear sales receip

wholesalers of footwear.

– Trade margin rates for other commodities handled by fo

wholesalers are computed wholesalers are computed.

– These rates are applied to non-footwear sales receipts of 

wholesalers.
Calculation of Wholesale Trade Marg

PCE E ti t PCE

E

stima

tes 

– con

t.



Ideally, the trade margin generated by appl

these rates to commodity lines handled by 

footwear wholesalers footwear wholesalers

= the trade margin de

the trade margin de

by evaluating purchases, costs, and inventoadjustments.

 In practice, the trade margins are not equal

adj g ustments are made to the mar

gin rates fo

commodity lines and kinds of businesses umargins are harmonized.
Calculation of Wholesale Trade Marg

PCE E ti t PCE

E

stima

tes 

– con

t.

 Effect of this harmonization procedure

– Mar

g p, 

in based on 

purchases, costs and inventor

adjustments is $3,635 million

– Harmonized margin calculated by harmonizati

proced i $3 589 illi dure 

is $3,589 million

– Procedure results in 1.3% drop in footwear ma
Calculation of Retail Trade Margin in 

E ti t s ma

tes

 Procedures are similar to those used in calc

wholesale trade margin due to data limitati

 Overall retail trade margins can be comput

type of outlet

– Department store– Hardware store– Grocery store

but not by merchandise line, like footwear
Calculation of Retail Trade Margin in 

E ti t s ma

tes 

– con

t.

 Ideally, the trade margin generated by appl

these rates to merchandise lines handled by t f tl t th t d i d i d b type o

f outl

e

t = the 

tra

de marg

in 

der

ive

d

by 

evaluating purchases, costs, and inventory 

adjustments for those outlets adjustments for those outlets.

 In practice, the trade margins are not equal

h i i d i li d harmon

i

z

ing proce

dure 

is appli

e

d.
Calculation of Retail Trade Margin in 

E ti t s ma

tes 

– con

t.

 Effect of this harmonization procedure

– Mar

g p, 

in based on 

purchases, costs and inventor

adjustments of shoe stores applied to all footwis $14,463 million.

– H i d i l l t d f h i 

Harmon

ize

d marg

in ca

lcu

l

a

t

e

d

from 

harmon

iz

procedure is $13,153 million.

– Procedure results in 9.1

% p dro

p in footwear ma
Examples of content differences in 

component categories of foot ear component categories of foot

wear

 PCE includes athletic footwear for particip

sports in footwear, CE includes such footwrecreati dit on expenditures. (Currently we cannot isol

expenditures in either PCE or CE to make an adjustment to aggregates.)

 PCE includes boot and shoe cut stock and 

findings in footwear CE does not include findings in footwear. CE does not include 

category in footwear. It is likely such ex

penditures are included in shoe re

pair se

p p
R hS esearc

h

Summary
Issues we need to consider: Issues we need to consider:

Respondent Burden Household UnderreportingNonres

ponse 

Uses and UsersCost
Recent Developments Recent Developments

Introduction of the Computer Assisted Perso

Interview instrument 

–

A

pril 2003

9 month field test underway – due to be complet

September 2002

Redesign of the Diary Instrument

4 month field test due to start in

September 2002

i l t ti h d l d f J 2004imp

lemen

t

ation sc

h

e

d

u

l

e

d

for 

January 2004
Ongoing Work Ongoing Work

 Global vs detail Global vs. detail CE/PCE comparisons ACNielson research ACNielson research Diary research I i t ti Income 

impu

t

ation

 Study of teenage spending
Possible Areas for Research Possible Areas for Research

 Individual Diaries Bracketing Assets and Liabilities Bracketing Assets and Liabilities Randomized Interview applications Targeted Interview applications Interview supplements Augmenting collected data with secondary sour

Augmenting collected data with secondary sour

data