Bureau of Labor Statistics
Mid-Atlantic Information Office
Suite 610 East–The Curtis Center
170 South Independence Mall West
Philadelphia, PA 19106-3305 |
Branch of Economic Analysis and Information
Phone: 215.597.3282
Fax: 215.861.5720
Web site: www.bls.gov/ro3/
Email: BLSinfoPhiladelphia@bls.gov
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Consumer Expenditure Survey (CE)
Technical Notes (PDF)
The Consumer Expenditure Survey (CEX) collects information from
the Nations households and families on their buying habits
(expenditures), income, and characteristics. The strength of the
survey is that it allows data users to relate the expenditures and
income of consumers to the characteristics of those consumers.
Data from the CEX are used in a number of different ways by a
variety of users. Market researchers find the data useful in
analyzing the demand for groups of goods and services. The data
allow them to track spending trends of different types of consumer
units. Government and private agencies use the data to study the
welfare of particular segments of the population, such as of consumer
units with a reference person age 65 and over or under age 25, or for
low-income consumer units. Economic policymakers use the data to
study the impact of policy changes in the welfare of different
socioeconomic groups. Researchers use the data in a variety of
studies, including those that focus on the spending behavior of
different family types, trends in expenditures on various expenditure
components including new types of goods and services, gift-giving
behavior, consumption studies, and historical spending trends. An
important use of the survey by BLS is for the periodic revision of
the Bureaus Consumer Price Index (CPI). Survey results are used to
select new market baskets of goods and services for the CPI, to
determine the relative importance of CPI components, and to derive
new cost weights for the market baskets.
Region of residence is one of the standard variables by which
expenditure data are classified. Region tables, which show the data
for the Northeast, Midwest, South, and West, are included in many CEX
publications. Consumer expenditure data for selected Metropolitan Statistical
Areas (MSAs) also are published. The MSA tables show annual averages over
a 2-year period for 26 MSAs. Two years of data are used so as to
have sufficiently large samples for publication.
The CEX does not show cost-of-living differences among areas.
The CEX data in published tables show average expenditures and
incomes of consumer units. The expenditure levels may vary across
areas for a number of reasons. These include demographic and
economic differences such as differing age levels, income levels,
size of consumer units, tastes, and personal preferences. A commonly
used method of comparing the cost of living among areas is to compare
the cost in those areas of a similar bundle of goods and services.
The CEX makes no attempt to measure a standard bundle of goods and
services but rather shows actual expenditure levels of consumer
units.
The data shown in the published tables are averages for all
consumer units, or for all the consumer units in a particular
demographic group. Because not all consumer units purchase each item
during the survey period, the average expenditure for an item is
generally considerably lower than the expenditure by those consumer
units that purchased that item. The less frequently an item is
purchased, the greater the difference between the average for all
consumer units and the average of those purchasing the item.
Data users may notice that in the income tables, average annual
expenditures exceed income before taxes for the lower income groups.
The primary reason for that is believed to be the underreporting of
income by respondents, a problem common to most household surveys.
The average incomes shown in the published tables are derived from
complete income reporters (consumer units that provide information
for at least one of the major sources of their income, such as wages
and salaries, self-employment income,or retirement income.)
However, even complete income reporters may not provide a full
accounting of all income from all sources. Research has shown
that some consumer units classified in the lower income classes
have expenditure levels that are more typical of upper
income consumer units. Their expenditures raise the average
expenditure levels of the income class in which they are classified.
There are other reasons why expenditures exceed income for the
lower income groups. Consumer units whose members experience a spell
of unemployment may draw on their savings to maintain their
expenditures. Self-employed consumers may experience business losses
that result in low or even negative incomes but they are able to
maintain their expenditures by borrowing or relying on savings.
Students may get by on loans while they are in school, and retirees
may rely on savings and investments.
Average expenditures on the most detailed items may not be as
reliable as at the published level because there may be so few
reports of expenditures on those items. A small number of unusually
large purchases of infrequently reported items or an increase in the
number of consumer reporting such expenditures may cause a large
change in the average expenditure from one period to the next. The
tables published in the bulletins show the expenditure component
level at which the estimates are considered to be reliable. However,
even in those tables, data in some cells are footnoted as being
likely to have large sampling errors due to so few reports.
The survey consists of two components, a quarterly Interview
Survey and a weekly Diary Survey, each with its own questionnaire and
sample. The Interview and Diary Surveys are sample surveys and are
subject to two types of errors, nonsampling and sampling.
Nonsampling errors can be attributed to many sources, such as
differences in the interpretation of questions, inability or
unwillingness of the respondent to provide correct information,
mistakes in recording or coding the data obtained, and other errors
of collection, response, processing, coverage, and estimation for
missing data. The full extent of nonsampling error is unknown.
Sampling errors occur because the survey data are collected from a
sample and not from the entire population. Tables with coefficients
of variation and other reliability statistics are available on
request.
Caution should be used in interpreting the expenditure data,
especially when relating averages to individual circumstances. The
data shown in the published tables are averages for demographic
groups of consumer units. Expenditures by individual consumer units
may differ from the average even if the characteristics of the group
are similar to the individual consumer unit. Income, family size,
age of family members, geographic location, and individual tastes and
preferences all influence expenditures.
Last Modified Date: May 16, 2008