Measuring Household Spending and Payment Habits: The Role of "Typical" and "Specific" Time Frames in Survey Questions

Marco Angrisani, Arie Kapteyn, Scott Schuh

This chapter is a preliminary draft unless otherwise noted. It may not have been subjected to the formal review process of the NBER. This page will be updated as the chapter is revised.

Chapter in forthcoming NBER book Improving the Measurement of Consumer Expenditures, Christopher Carroll, Thomas Crossley, and John Sabelhaus, editors
Conference held December 2-3, 2011
Forthcoming from University of Chicago Press
in NBER Book Series Studies in Income and Wealth

We run an experiment in the American Life Panel where we interview individuals over five consecutive quarters and ask them to report the number of their purchases and the amount spent by debit cards, cash, credit cards, and checks. For each method of payment, a sequence of questions elicits spending behavior during a day, week, month, and year. At the time of the first interview, this sequence is randomly assigned to refer either to "specific" or to "typical" time spans. In all subsequent interviews, a "specific" sequence becomes "typical" and vice versa. In this chapter, we analyze the data from the first wave of this experiment. We show that the type (specific/typical) and length of recall periods greatly influence household reporting behavior. The volatility of household expenditure decreases monotonically with the length of recall periods. Within a "specific" framework, the implied annual amount spent is higher when individuals refer to day or week than to month or year. This pattern is stronger for debit cards and cash than for credit cards and checks. Within a "typical" framework, the implied annual amount spent varies less with the length of recall periods. Reported expenditure tends to be larger for "specific" periods.

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This paper was revised on July 16, 2014

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