CONSUMER EXPENDITURE SURVEYS “Construction and Research Use of the Consumer Expenditure Survey” 1 Outline Overview O i Recent Research PCE/CEX Comparisons Wrap - Up 2 The survey is designed to represent a National Probability Sample – using the most recent decennial census, augmented by new construction permits – consisting of primary sampling units (PSU) – based b d on probabilities b biliti proportional ti l to t population size – consists of counties, counties group of counties counties, or independent cities 3 Housing Units are selected selected... Within each PSU using such information as: – – – – vacancy status number of persons residing in housing unit value of the housing unit rent paid for the housing unit 4 5 Definitions CEX is i interested i d in i determining d i i consumer units - based on the financial relationship of th members the b off th the hhousehold. h ld 6 How do we define Consumer Units? Members b off a hhousehold h ld related l d by b blood, bl d marriage, i adoption, d i or other legal arrangement Single person living alone or sharing a household with others but who is financially independent Two or more persons living together who are financially dependent 7 How does this compare to others? SIPP andd CPS use a household h h ld definition… All persons who occupy a h i unit housing it 8 Although we have slightly different definitions - the CEX based on the financial relationship between members -- the difference between consumer unit and housing unit is small. small About 3% of our housing units contain more than one consumer unit. unit 9 Respondent CEX - One person responds for the entire consumer unit unit. We ask for the person most knowledgeable of expenditures for the entire consumer unit CPS - One person, preferably most knowledgeable about the labor force activities of the others. others SIPP - A separate p qquestionnaire is administered to each member over age 15 10 Reference Person All three h surveys hhave a similar i il definition d fi i i the person or one of the persons who owns or rents t the th unit. it 11 Survey Instruments Diary – 2 consecutive 1-week – includes » detailed expenditures for food, personal care, household supplies expenditures – excludes » expenditures di for f out-off town trips NO QUANTITIES Interview – 5 quarterly, only inventoryy and basic sample data from 1st – excludes expenditures for: » housekeeping supplies (e.g., postage stamps) » personal care products » non-prescription drugs LIMITED QUANTITIES 12 Socio demographic Variables Socio-demographic Collected during each interview – Member level – Consumer C unit i level l l » reference person » CU Collected 2nd and/or 5th interview 13 Both the Interview and Diary samples are purposely non-clustered Past P research h has h shown h that h clustered l d samples for expenditure data would not yield i ld expenditure di patterns that h are representative of the entire area Clustered samples tend to cut down on travel expenses and hours per schedule. 14 Let’s look at sample size Census uses the term “cases” cases when referring to its collection workload and costs. costs Cases can be defined as one interview or one diary di visit. ii For households with more than one consumer unit, each consumer unit would be counted separately 15 Let’s look at some Census figures In order to collect the equivalent of 5400 households completing 5 quarterly interviews or 2 diaries, diaries we must field about 60,000 cases for Interview and 25,000 cases for Diary 16 How does this translate to households? 60,000 represents the size of the sample prior to any p y refinement. About 1/5 of these cases are Interview 1 -the bounding interview The field representatives refine the sample to determine those housing units that are out of scope of our survey 17 Once eligible households are determined p attempt p to collect the field representatives the data. As in every survey they encounter refusals refusals. The result is the number of completed cases that can be used to determine expenditures 18 Let’s do the math math... Total Cases Bounding B di Interview I t i – equals Out O off S Scope Refusals Net Sample Yield 60,000 12 000 12,000 48,000 8 800 8,800 8,000 31,200 Thi translates This l to about b 7800 consumer units i . 19 In Comparison SIPP fields about 119,000 cases each year CPS fields about 722,000 cases each year 20 Average Time per Case CEX – Diary – Interview SIPP CPS All 6.1 hours 4.0 hours 2.6 hours 51 2 minutes 51.2 hours include travel time 21 Cost per Case CEX $268 00 $268.00 SIPP $193 00 $193.00 CPS $51 00 $51.00 22 Census Budgets CEX $24 653 000 $24,653,000 SIPP $ $23,050.231 CPS $36,658,251 23 If sample size of CEX interview were increased to the size of SIPP, the Census budget would be about: $32,000,000 24 To increase the sample from its current 5400 households to size of CPS, which is approximately 50,000 50 000 households….. households We would need to collect about 370,000 cases, at $268 a case = about $100,000,000 25 Response Rates Interview 90% Diary 85% 80% 75% 70% 65% 1992 1993 1994 1995 1996 (furlough) 1997 26 How many households completed all 5 interviews? about b 75% How many households completed both diaries? about 92% 27 Consumer Price Index Initiative CPII Provides for: – 50% expansion in urban PSU’s - in 1999 – Development of CAPI instrument » slated l t d for f implementation i l t ti in i 2003 28 Survey Expansion A 50% increase in urban PSU’s PSU s requires – about 57,000 cases for Interview – about b 23,000 cases for f Diary i » This will yield approximately the equivalent of 7800 households of data for both the diary and interview 29 Expenditure Data in the CEX 30 Outline Defining consumption Data available in the CEX Processing g of expenditure p data Data comparisons 31 Defining Consumption Expenditures – Transaction costs, including taxes, for goods and services – Flow of services from durables and owned housing In In-kind kind transfers – Private sources – Public sources Home production 32 Expenditure Definitions used in CEX Publications Total expenditures Current consumption Outlays Yes Yes Yes Mortgage principal payments No No Yes Mortgage g g interest p payments y Yes Yes Yes Purchase price of vehicles Yes Yes Vehicle loan principal payments No No Only those not financed Yes Vehicle loan interest payments Yes Yes Yes All other finance charges Yes Yes Yes Item Purchase price of all items but housing and vehicles 33 Expenditure Definitions used in CEX Publications - (cont.) (cont ) Total T t l expenditures No Currentt C Consumption No Outlays No Occupational expenses Yes No Yes Gifts given outside household Yes No Yes Cash contributions Yes No Yes Life, annuity, and other personall insurance i Y Yes N No Y Yes Yes No Yes Item Business purchases Pension and retirement contributions 34 Comparison of Expenditures ( (annual l means in i nominal i l dollars) d ll ) $32 000 $32,000 $30,000 $28,000 $26,000 $24,000 1991 1992 Total Expenditures 1993 Outlays 1994 Consumption 35 Expenditure Data in the Interview Quarterly – purchase of nondurables » global food » detail for other items Annually in 5th interview only – detailed cash contributions – occupational p expenses p – gifts given outside household – global l b l cashh contributions t ib ti 36 D rables in the CEX Durables Initial In entor Inventory (1st Inteview) Purchases (2nd 5th (2nd-5th Interviews) Disposals (2nd 5th (2nd-5th Interviews) owned vehicles Current In entor Inventory (2nd-5th Interviews) owned vehicles owned vehicles owned vehicles owned property owned property owned property owned property other durables other durables not collected not available 37 Additional Information on Durables Method of acquisition and characteristics of – owned property (not updated for new construction construction, alterations alterations, or remodeling) – owned vehicles (not updated for changes in options) Method of acquisition for other durables ((1st interview only y and not updated) p ) 38 In-Kind Private Transfers C h Values Cash V l Meals as pay Rent as pay Employer contribution to purchased or l leased d vehicles hi l (personal ( l use)) Educational expenses reimbursed by agency, employer, or person outside the CU 39 In-Kind Private Transfers C h Values Cash V l ((cont.) t) Reimbursements from insurance company, company medical provider, business, or person outside the CU for – Vehicle services, parts, and equipment – Medical M di l expenses – Repairs, maintenance, alterations, and new construction t ti off property t 40 In-Kind Private Transfers R i t Only Receipt O l Major appliances received as gifts (inventory) Vehicles V hi l received i d as gifts if Real property received as gifts or inheritance Health insurance p premiums partially p y or entirely paid by employer, agency or person outside the CU 41 Other In-Kind In Kind Transfers Public Transfers – Cash values » Food ood Stamps Sta ps (counted (cou ted in income) co e) – Receipt only » Medicaid » Public housing project or subsidized housing Public/Private Transfers – Receipt only » Food,, beverages g or meals through g ppublic or pprivate welfare agencies, including religious organizations 42 Data Processing for Expenditures Imputation – About 5% of all cost records – Over O hhalf lf off records d ffor fi finance charges h ((excl. l auto and mortgage) – About Ab t one-fourth f th off mortgage t paymentt andd home h ownership cost records Allocation All ti – About 6% of all cost records – Over one-fourth of fuel and utility cost records 43 Data Processing for Expenditures (cont ) (cont.) Allocation (cont.) (cont ) – Over one-fifth of records for clothing of persons 2 and over Time adjustment Sales taxes Additional processing g for public use data – topcoding – ggeographic g p restrictions 44 Topcoding and Geographic Adjustment for Public Use Data Subject content cannot present unusual risk of disclosure – rent > $3,000 – property or medical expenses > $200,000 $200 000 – airplane purchases and ownership deleted Geographic areas with fewer than 100,000 inhabitants cannot be identified – region i (urban ( b CU’ CU’s only) l ) – population size (not for rural CU’s and CU’s in West) – limited information for states 45 Data Comparisons Diary CEX and Interview and external sources 46 Data Available by Instrument Interview Diary Both Combination 47 Comparability of Selected Items Item code (UCC) 330110 640110 190903 470113 320340 320350 300210 300211 300212 Survey Description instrument Soaps and detergents Diary only Hair care products Diary only Food on out-of-town trips Interview only Gasoline on out-of-town trips Interview only Glassware Both Silver serving pieces Both Washingg machines Diary y onlyy Washing machines, owner Interview only Washing machines, renter Interview only 48 S Sample l S Statistics i i ffor S Selected l d IItems, 1993 1993-95 95 Item IInterview t i mean IInterview t i CV Sofas $75.40 4.58 $52.72 15.76 Bedroom linens 33.10 2.87 44.60 7.98 Legal fees 99.43 7.52 33.34 16.54 38.10 30.21 216.08 8.98 Washing machines Washing machines (renter) Washing machines (owned) Physicians’ services 5.21 6.89 14.27 5.52 160.86 3.11 Diary Di mean Diary Di CV 49 How do CEX expenditure p data compare between surveys and to other th sources, such h as PCE? “Reporting ratios” ($CEX/$PCE) y dollars are reported p show how many by CU’s in the CEX for every $1 reported by PCE. 50 Food at Home Ratios using Diary and Interview based on Means 12 1.2 1.0 08 0.8 0.6 04 0.4 0.2 0.0 1991 1992 1993 Diary y detail/Interview 1994 1995 Diary yg global/Interview 51 Detailed Diary to Interview Ratios based on Means 16 1.6 1.4 1.2 1991 1992 1993 1994 1995 1.0 0.8 06 0.6 0.4 0.2 00 0.0 Total food Food at home Food away Alcohol Tobacco 52 CEX Interview/American Housing Survey Ratios based on Medians 1.2 1.0 08 0.8 1985 1987 1989 1991 0.6 04 0.4 0.2 00 0.0 Market Mortgage Property value of principal taxes owned and interest home Property insurance Rent 53 CEX Diary/Progressive Grocer Ratios based on Aggregates 4.0 3.5 30 3.0 1991 1992 1993 1994 1995 2.5 2.0 1.5 1.0 05 0.5 0.0 Total food Fresh fruits & vegs vegs. Non-alc beverages Fish & seafood 54 CEX Integrated/Personal Consumption E Expenditures dit R ti based Ratios b d on Aggregates A t 1.20 1.00 0.80 1991 1992 1993 1994 1995 0.60 0.40 0.20 0.00 Apparel Food Gasoline Vehicle purchases 55 Income, Assets and Liabilities in the CEX 56 Income Data Collection procedures Sources Reporting issues Data quality q y Imputation 57 Income data are collected in both the Interview and Diary y Surveys. 58 However, we will focus on Interview data. data Questions are similar in both Interview and Diary. The Th IInterview i ddata are the h ddata used d iin publications of “integrated” (Diary and I Interview) i ) results. l The Interview survey provides information on total expenditures. 59 Income data are collected during the second and fifth interviews and cover the 12 interviews, months p prior to the interview. This is done in part to minimize p burden. respondent Data are collected after the expenditure data. 60 Income data are collected at both the member b llevell and d consumer unit it level l l Member M b llevell (M (Major j sources; All persons at least 14 years old) Consumer unit level Wages and Salaries Self-employment - farm Self-employment - non-farm Social Security and Railroad retirement Supplemental Security Interest Income Dividend Income Rental of property Pensions and annuities Unemplo ment insurance Unemployment ins rance Worker’s Compensation and VA benefits Alimony and regular contributions Child support Public Assistance/welfare Food Stamps Other sources Lump sum receipts 61 This is similar to the CPS, with the following exceptions: CPS collects most sources for each household member. Some sources in CEX (e.g., Social Security and Railroad Retirement) are collected as separate categories in CPS. Other O h sources in i CEX (e.g., ( pensions i andd annuities) are collected as many separate categories in CPS (e.g., (e g private pensions, pensions Federal government pensions, U.S. military pensions, and black lungg survivor income)) 62 B d on reporting Based ti status, t t Consumer units are divided into p and “incomplete” p “complete” reporters of income. 63 “Complete” Complete income reporters…. Report a value for at least one major source of income for their “reference person” Report R a value l ffor at lleast one major j source of income for someone else (and the reference f person reports hhaving i no major j sources of income) Report a value for some family level income; members have no major sources of income 64 Drawbacks of the definition: Not all complete reporters provide a full accounting of income from all sources. Studies S di have h shown h that h ““complete” l ” reporters are not a random subset of all consumer units. i The percentage of complete reporters has declined in recent years. 65 Percent Complete Reporters: 1988 1995 1988-1995 100% 95% 90% 85% 80% 75% 1988 1989 1990 1991 1992 1993 1994 1995 66 Notes on Complete Reporters: Complete reporters provide a value for at least one major source of income. About 85 percent of the total sample for the Interview Survey. Most M t studies t di that th t use CEX income i ddata t rely l on complete reporters. Using U i more restrictive t i ti definition d fi iti off complete l t reporter yields a percent reporting comparable to the CPS CPS. 67 Percent reporting differs by source of income…. income 80% 70% Interview e v ew 60% Diary 50% 40% 30% 20% 10% 0% Wages and salary Retirement Interest & dividends Public assistance Selfemployment Unemployment/ Regular worker's contributions compensation Other income 68 …as do means for all complete reporters (1995). (1995) $30 000 $30,000 $5 000 $5,000 $4,500 $25,000 $4,000 Interview $20,000 Diary $3 500 $3,500 $3,000 $15,000 $2,500 $2,000 $10,000 $1,500 $1,000 $5 000 $5,000 $500 $0 $0 Wages and salary Retirement Interest & dividends Public asst SelfUnemployRegular Other income employment ment & contributions worker's compensation 69 Tax data are also collected in the Interview survey…. survey Payroll tax Property tax Federal income tax – No separate value for EITC State and local income tax Personal property tax Other taxes 70 However, as with income data, tax reporting is an issue issue. Percent Reporting Federal Income Taxes: 2nd and 5th Interview Complete Reporters: 1994-95 100% 80% 79% 68% 87% 87% 58% 60% 29% 40% 20% 0% All complete reporters 1st 2nd 3rd Income quintile 4th 5th 71 How do CEX income data compare to other sources, such as CPS? “Reporting ratios” ($CEX/$CPS) y income dollars CEX show how many collects for every $1 CPS collects. 72 Over time, the following ratios are observed for selected sources: 1 0.9 0.8 07 0.7 0.6 0.5 0.4 Wages and Salaries All Sources Property Income 0.3 02 0.2 0.1 0 1988 1989 1990 1991 1992 1993 1994 1995 73 The following other patterns are observed: “High” High Ratio Items: Wage and salary Self-employment Self employment Social security Public P bli assistance it “Low” Low Ratio Items: Property income Unemployment/ Worker’s Compensation/ Veterans’ benefits. Veterans Regular contributions and other income 74 CEX/CPS ratios by income source and household type: 1994 1.2 All households Singles Married couples 1.0 0.8 06 0.6 0.4 0.2 00 0.0 Household income ages and Salaries Retirement Dividends Unemployment & worker's comp 75 It is important to remember that income data in the CPS data are imputed for missing values, but th are nott iin th they the CEX. CEX CEX is experimenting with p to fill in missingg data. imputation How might this affect outcomes? 76 First, some background on methodology. methodology We are examining “model model-based based” imputation. We W are exploring l i “multiple” “ l i l ” imputation. i i (Procedure involves estimating income severall times i andd averaging i the h estimates.) i ) We are considering the “hierarchical” approach (member 2’s income depends on member 1). 77 As this work ork is still in progress progress, the following g results are obtained from a “single” imputation model using i the th hi hierarchical hi l method. th d Imputation is for complete reporters only Reported values preferred to imputed values Negative values are removed 78 At least one family in every quintile is i imputed t d tto b belong l iin th the 5th quintile. i til $157 893 $157,893 Observed Maximum Imputed p Maximum $160,000 $120,000 $124 241 $124,241 $97,701 $81,899 $80,000 $54,500 $34,729 , $40,000 $11,000 $21,200 $0 1st Quintile 2nd Quintile 3rd Quintile 4th Quintile 79 Most of the movement is due to low-income reporters moving into higher (but not always the highest) i ) income i classes. 22% Percent Distribution of Consumer Units By Income Range 20% 18% 16% Observed Imputed 14% 12% 10% 8% 6% 4% 2% 0% $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $100000+ 80 CEX/CPS ratio for total household income by percentile 11 1.1 1.0 0.9 0.8 Households: Observed Households: Imputed Married couples: Observed Married couples: Imputed 0.7 0.6 2 6 10 14 18 22 26 30 34 38 42 46 50 54 58 62 66 70 74 78 82 86 90 94 98 Percentile 81 Assets and Liabilities Collection procedures Sources Reporting issues Data quality 82 Assets and Liabilities are collected in different i t i interviews and d sections ti off th the survey. Financial Assets are collected in the 5th Interview after income Consumer debt (other than home and vehicle) are collected in the 2nd and 5th Interview just before income Real property information is collected in the first interview in the home-ownership expenditure section Vehicle information is collected in the first quarter in the vehicle expenditure section 83 Market values are collected for some items items. Assets: Savings accounts Checkingg accounts U.S. Savings bonds Stocks, bonds, mutual funds M Money owed d to CU Liabilities: Estimated mortgage principal outstanding Vehicle principal Credit card debt Store Installment debt Other debt owed to: – Banks /savings and loans/credit unions, finance companies – Insurance companies – Health care providers 84 Changes in values are also available for selected variables. variables Assets: Savings accounts Checking accounts U.S. savings bonds Securities (stocks, bonds, mutual funds) Money owed to CU I Investments/withdrawals t t / ithd l from farm/business Contributions/withdrawals from Pensions Liabilities: Amount owed to other creditors Mortgage principal (special/lump-sum payments regular payments, reduction) for owned home/other properties Vehicle principal 85 Percent Reporting for Financial Assets (All 5th IInterview t i CU CUs: 1994-95) 1994 95) 100% Valid response With positive assets 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Any Financial asset Savings Accounts Checking Accounts U.S Savings Bonds Securities 86 Market value of financial securities All 5th Interview CUs: 1994-95 $15 000 $15,000 $10,508 $10,000 $7,437 $2,645 $5,000 , $465 $0 Savings S i Accounts Checking Ch ki Accounts U.S U SS Savings i Bonds S Securities ii 87 Percent reporting values for financial liabilities All 5th Interview CUs: 1994-95 70% 60% 48% 42% 50% 40% 30% 20% 9% 8% 7% 10% 0% All consumer Credit cards debt Store Installment Banks, credit unions, etc Other debt 88 Value of outstanding financial debt All 5th Interview CUs: 1994-95 $2 000 $2,000 $1,500 $1,156 $454 $1,000 $291 $67 $500 $0 Credit cards Store Installment Banks, credit union, etc Other debt 89 Property assets and liabilities Market value of owned home Market value of other property Mortgage Other p property p y debt ((home equity q y loans)) Vehicles - ownership and purchase price Vehicle debt 90 Real Property: 1995 Percent reporting Average Market Value for all CUs 70% $80,000 60% $70,000 $60,000 50% $50,000 40% With mortgage $40,000 30% $30,000 20% $20,000 10% $10,000 0% $0 Owned home Vacation home other real estate Owned home Vacation home other real estate 91 R Research hS Summary 92 Recent Research How can we reduce respondent burden while improving the expenditure estimates? –W We looked l k d att one possible ibl solution: l ti reducing d i the number of questions for certain expenditures in the interview, interview replacing them with “globals” 93 At the same time we looked at redesigning the diary. – The diary could be segmented into “targeted” targeted diaries with separate samples. – One would be similar to our ppresent diaryy -- askingg for “everyday” expenditures – Another would be asking for detailed expenditures for th those areas we hhadd earmarked k d ffor global l b l questions ti in i the interview 94 A very small field test was conducted of the two diaries. –R Results lt showed h d that th t respondents d t were able bl to t understand the concept of some versus all expenditures – But, the level of expenditures received in the diary were low 95 –W We also l reviewed i d other th sections ti in i the th interview » Child Care » Business Expenses » Cash Contributions » Income 96 Changes with the introduction of CAPI Business Expenses Cash Contributions Gifts 97 Diary Research Project Chartered with providing: –R Recommendations d ti on previous i Diary Di workk – Recommendations on use of scanning data and technology – Recommendations on “User Friendly” diary research project – Costs associated with recommendations 98 Proposed Research Request for funding in FY99 “improve p the reliabilityy of expenditure p estimates” 99 What is the most efficient,, most accurate method for collecting expenditures and income data? 100 Issues we need to consider: Household underreporting Nonresponse Respondent p Burden Cost Uses and Users 101 Credits Introduction and Research Summary – Mary E. McCarthy, DCEX Chief Expenditures di iin the h C CEX – Thesia I. Garner and William D. Passero – DPINR and DCEX Income, Assets, and Liabilities in the CEX – David S. Johnson and Geoffrey D. Paulin – DPINR and DCEX 102
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