# **2. Issues in the Measurement of Consumption through Surveys**

There is a large literature on methods of collecting consumption data through household surveys.<sup>4</sup> Much of the evidence from survey experiments was generated in developed countries, while studies from lowincome settings typically draw on surveys not specifically designed to systematically compare contrasting methods.<sup>5</sup> The specific experimental design described in the next section was motivated by the desire to carefully investigate the divergences across the main methods of consumption data collection in common use today in a developing country setting. The primary dimensions in which these methods vary are three: the use of diary vs. recall, the level of aggregation or detail in the commodity list, and the reference period. Some existing evidence of the measurement consequences of the three aspects is reviewed in turn; lengthier discussions of this literature can be found in Gibson (2006), Deaton and Grosh (2000), and Scott and Amenuvegbe (1991).

There are many potential sources of reporting error that lead survey estimates of consumption to deviate from actual consumption. Perhaps the most commonly discussed in the literature is recall error, where a household under-reports true consumption over the period of recall due to faulty memory. Presumably the longer the period of recall, the greater the cognitive demand on the respondent and the greater the divergence between reported and actual consumption. Several studies have documented that, all else equal, the longer the period of recall, the lower the reported consumption per standardized unit of time. Closely related to recall error is telescoping, where a household compresses consumption that occurred over a longer period of time into the reference period asked and thus reports consumption greater than the actual value.

A third important source of error is the inability to accurately capture individual consumption by household members that occurs outside the purview of the survey respondent. Clearly this inability may be more significant for certain types of consumption goods such as transport, telecommunication, or meals outside the home. The degree of inaccuracy likely also increases with the number of adult household members and the diversity of their activities outside the home.

Other sources of error with no obvious direction of bias include rounding error and cognitive errors that result from consideration of hypothetical consumption constructs such as consumption in a “usual” month which may present additional cognitive demands compared to a definitive recall period in

> 4 This section does not review the literature from cognitive psychology on the effects of question framing and other issues related to survey design generally; we focus instead on issues and evidence specific to household consumption expenditure.

> 5 The developed country studies often compare recall to diary methods (see, for example, Neter, 1970; Neter and Waksburg, 1964; McWhinney and Champion, 1974; Kemsley and Nicholson, 1960; Gieseman, 1987). More recent work examines other dimensions such as bracketing and question wording/prompting, as in Comerford et al. (2009).