# **II. Consumption measurement errors: a brief taxonomy**

The degree and nature of measurement error in consumption captured by household surveys depend partly on survey design features.<sup>1</sup> These vary along a large number of dimensions, such as the length of the recall period or the level of item-specific detail sought (Fiedler, Carletto, and Dupriez 2012; Smith et al. 2014). Moreover, because these features affect the estimates of household consumption, comparisons across countries, as well as within countries over time, are compromised when questionnaires change.<sup>2</sup> Reporting error occurs if the information relayed by the respondent to the interviewer is not accurate. This error can take various forms, including the following:

- _Recall error_ . A main concern is that respondents might forget the occurrence of a consumption event. This could result in recall error. Lower salience and longer recall periods make forgetfulness more likely among respondents (Sudman and Bradburn 1973). Several studies show that, all else equal, the longer the period of recall, the lower the reported consumption per standardized unit of time (Grosh et al. 1995; Scott and Amenuvegbe 1991).

- _Telescoping_ . The converse of recall error is telescoping whereby a household compresses consumption that occurred over a longer period of time into the reference period and thus reports consumption greater than the actual value.

- _Rule of thumb error_ . Respondents may not always recall and count events (Menon 1993). Particularly for longer recall periods that typically involve more transactions, respondents may cease trying to enumerate each and instead use rules of thumb to estimate them (Arthi et al. 2016; Blair and Burton 1987; de Nicola and Giné 2014; Gibson and Kim 2007). In this case, rule of thumb error depends on transaction frequency and regularity; less frequent items are likely reported with more error. Whereas recall error biases the consumption estimate downward, and telescoping creates upward bias, there is no obvious direction of bias in responses that resort to the rule of thumb instead of enumeration. We may expect this error to be especially pertinent in hypothetical consumption constructs such as questions about consumption during a usual month. Usual month consumption is an explicit attempt to abstract away from seasonal considerations in consumption; however, this type of question may pose additional cognitive demands relative to a definitive recall period in the immediate past.

- _Personal leave out error_ . Yet another source of reporting error is the inability to capture individual consumption by household members accurately if it occurs outside the purview of the survey respondent. This may be more significant for certain types of food, such as snacks or meals taken outside the home, or for personal goods such as mobile telecommunications. The degree of inaccuracy is likely to increase with the number of adult household members and with the diversity of the activities of these members outside the home (World Bank 2006).

- _Other error types_ . While the analysis in this study focuses on the four types of reporting error listed above, misreporting can also arise from other sources, such as rounding error, social desirability bias, and strategic responses. An example of the last is a respondent who understates her consumption to appear poorer because of a belief that these responses may determine the eligibility for some future social program. There may also be intentional misreporting because of respondent fatigue. So, whether

> 1 A consumption survey is a household survey that collects detailed consumption data. It has a range of labels, such as household budget survey, living standards survey, or household income, consumption, and expenditure survey. 2 See Beegle et al. (2016) for an extensive discussion of this issue in Sub-Saharan Africa.

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