The Benefits of Panel Data in Consumer Expenditure Surveys

Jonathan A. Parker, Nicholas S. Souleles, Christopher D. Carroll

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

This chapter explains why the collection of panel (re-interview) data on a comprehensive measure of household expenditures is of great value both for measuring budget shares (the core mission of a Consumer Expenditure survey) and for the most important research and public policy uses to which CE data can be applied, including construction of spending based measures of poverty and inequality and estimating the effects of fiscal policy. Specifically, collection of panel data (1) improves measurement of expenditure data, feeding into the core mission of the CE Survey, (2) increases the range and quality of group-specific price indexes that can be constructed, (3) permits reasonably reliable measurement of consumption inequality, and relative standards of living, (4) expands the range and improves the power of analyses of household spending, and (5) allows the measurement of dynamic responses like the propensities to consume that are crucial to the analysis of many economic events and policies.

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This paper was revised on July 29, 2014

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