The Validity of Consumption Data: Are the Consumer Expenditure Interview and Diary Surveys Informative?
We examine the quality of data in the Consumer Expenditure (CE) Survey. We compare reported spending on goods and services to comparable national income account data separately for the two components of the CE--the Interview Survey and the Diary Survey--rather than a combination as in past comparisons. We find that most of the largest consumption categories are measured well in the Interview Survey. Other large categories are reported at a low rate or their ratio to the national accounts declines over time. For the Diary Survey, there is no large category that is both measured well and reported at a higher rate than in the Interview Survey. We also compare durables in the CE to other sources. This evidence suggests the CE performs fairly well and appears to be fairly representative, although there is evidence of underrepresentation at the top of the income distribution and under-reporting of income and expenditures at the top. We then examine the precision of the two surveys and the frequency of no spending. In the Diary Survey, we find much greater dispersion in spending, and the dispersion relative to the Interview Survey varies across goods and over time.
Adam Bee is an economist in the Social, Economic, and Housing Statistics Division at the U.S. Census Bureau. Bruce D. Meyer is McCormick Foundation Professor of Public Policy at the University of Chicago and a research associate of the National Bureau of Economic Research. James X. Sullivan is associate professor of economics at the University of Notre Dame. This paper does not necessarily reflect the views of the U.S. Census Bureau. We would like to thank Tom Crossley, Thesia Garner, Steve Henderson, Clinton McCully, William Passero and Laura Paszkiewicz for their help and participants at the CRIW/NBER Conference on Improving the Measurement of Consumer Expenditures for their comments. We also thank Kevin Rinz for research assistance.