Improving Consumer Payments 

Measurement with the Diary of 

Consumer Payment Choice

Kevin Foster

Federal Reserve Bank of Boston

2016 CE Survey Methods Symposium

BLS, Washington, DC

July 12, 2016
Success & Challenge for the DCPC

• Success:

– Aggregate DCPC payments match aggregate PCE 

consumption in comparable expenditure categories. 

(CEX equals 63% of PCE1)

•

1 Schuh, S., Measuring Consumer Expenditures with Payment 

Diaries, 2016.

• Challenge:

– Despite measuring all the detailed components of cash 

(currency) holdings and transactions, DCPC estimates 

do not consistently satisfy the implied dynamic 

relationship among these concepts.

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DCPC SCPC CEX-S CEX-D FCS

Sponsor Boston Fed Boston Fed BLS BLS RAND Corp.

Frequency Irregular,

2012, 2015

Annual,

2008-present

Quarterly,

1980-present

Quarterly,

1980-present

Annual

2008-2014

Response unit(s) Consumers Consumers Consumer units Consumer units Households

Sample size ~2,000 ~2,000 ~7,000 ~7,000 ~2,500

Sampling frame ALP, UAS, GfK, 

Qualtrics 

ALP, UAS, GfK, 

Qualtrics

Internal Internal ALP

Survey mode(s) Internet & various 

memory aids

Internet Interview (CAPI) Interview with paper 

memory aid

Internet

Method of data 

collection

Recording + Recall Recall Recall Recording + Recall Recall

Unit(s) of measure Amount spent per 

payment each day

# of payments in a 

typical period

Amount spent per 

category recently 

Total cost for each 

daily item purchased

Amount spent per 

category recently

Reference period of 

measurement

Daily (three 

consecutive days, 

randomly assigned)

Respondents choose 

week, month, or year

Usual week, month, 

or quarter depending 

on category

Daily (one week) Past month or 

quarter, depending 

on category

Response format of 

questions

Open-ended 

(respondents provide 

$ values)

Open-ended 

(respondents provide 

$ values)

Open-ended 

(respondents provide 

$ values)

Open-ended 

(respondents provide 

$ values)

Open-ended 

(respondents 

provide $ values)

Incentives $60 $20 $0 $0 $20

Strategy for reducing 

or correcting 

response errors in 

real-time

Reconciliation screen 

while entering 

purchases

Range checks Experimented with 

cash-flow 

reconciliation in Koop 

and Nhien (2012), but 

not implemented.

N/A Reconciliation 

screen at end of 

survey

Comparison of DCPC to other surveys & diaries

3
Sample 

page from 

Diary of 

Consumer 

Payment 

Choice

4
Sampling methodology

• New respondents start every day. 

• On any day in the diary month, there are respondents on 

Days 1, 2, and 3 of their diaries. 

• This helps smooth out any daily bias due to diary fatigue.

5
Expenditure coverage comparison

PCE = Personal Consumption Expenditures from the National Income & Product 

Accounts (NIPA) 6
DCPC

(unlimited)

CEX-S

CEX-D

(unlimited)

FCS

All categories

Comparable categories

Food and beverages 3 9 20 2

General merchandise, recreation, 

communication

8 95 10 7

Rent, utilities, furnishing 5 77 1 11

New vehicles, transportation 6 50 2

Professional and other services 4 4 5

Other goods/services 6 37 3 5

Non-comparable categories

Financial services and insurance 2 13 4

Used motor vehicles 1 10 1

Health 2 17 1 3

Education 1 10 1 1

Social services and religious activities 1 4 1

Unique categories

Final consumption expenditures of nonprofit 

institutions serving households (NPISH)

Imputed rent

Cash contributions including alimony and child 

support

3

Expenditures for owned dwellings 3 30 2 3

Friends and family 1

Other people (excluding people who provide 

goods and services) 1 1

Taxes, fees, fines, and other payments to 

governments 1

Sales taxes for 

various 

purchases

1

Unknown 1

7
Aggregate consumer expenditure 

estimates, October 2012 ($millions)

Expenditure categories

PCE CE FCS DCPC

All

(Percentage of PCE)

11,051

(100%)

6,398

(58%)

4,925

(45%)

9,718

(88%)

Directly comparable

(Percentage of PCE)

5,920

(100%)

3,721

(63%)

2,747

(46%)

5,981

(101%)

Food and beverages 1,534 876 823 1,778

General merchandise, recreation, 

communication

1,961 902 585 1,647

Rent, utilities, furnishing 980 893 599 1,264

New vehicles, transportation 1,009 722 472 849

Professional and other services 170

Not broken 

out in Table 

1300

Not 

collected

175

Other goods/services 265 328 269 268

Approximately comparable

(Percentage of PCE)

3,553

(100%)

1,415

(40%)

829

(23%)

1,734

(49%)

Financial services and insurance 789 890 375 1070

Used motor vehicles 97 189 50 112

Health 2,266 186 202 328

Education 253 150 157 110

Social services and religious activities 147.2 45 114 8
Cash flow in a recall survey

Ct+1,i = Cti + Wti − Dti

t = month, i = one household

• Townsend Thai Monthly Survey1(TTMS) attempts to 

measure household cash flow by asking cash balances, 

withdrawals, and deposits on a monthly frequency.

–

1 Samphantharak, K. and Townsend, R.M., Households as 

Corporate Firms, 2010.

• This approach encountered relatively large 

measurement errors in Thailand. C, W, D are often 

estimates.

• There are additional cultural issues in Thailand 

involving reporting cash holdings to interviewers.

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Cash flow in a payment diary

Cd+1 = Cd + 

i=1

Nd

W

Wid − 

i=1

Nd

D

Did ± ε

d = day of month, i = one transaction

• DCPC gets better estimates of cash flow:

– Diary recording instead of TTMS recall survey

– Daily frequency

– Measures every cash transaction

– Real time error checking

• Cash identity holds for 72.4% of diary days in 

2012. How can we increase this rate?

10
Improvements for 2015 DCPC

• Assets: Collected balances for other accounts

– Checking account, prepaid card, and PayPal.

• Income: Collected dollar values and types

• Consumption: 

– Improved separation of consumption and nonconsumption

– Increased bill payments estimates and details

• Payee: improved identification to help 

understand payment choices

• Questionnaires: integrated the contents of the 

SCPC and DCPC

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Thank you

Kevin Foster

Survey Methodologist

Federal Reserve Bank of Boston

kevin.foster@bos.frb.org

617-973-3955

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