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Handbook of Methods Consumer Expenditures and Income Concepts

Consumer Expenditures and Income: Concepts

The Consumer Expenditure Surveys (CE) gather data on household expenditures, income, changes in assets and liabilities, and demographic characteristics of consumers in the United States. A consumer unit (CU) is the measurement unit collected for the eligible individuals represented in the expenditure reports.  

The CU is defined as

• all members of a particular housing unit who are related by blood, marriage, adoption, or some other legal arrangement, such as foster children;
• a person living alone or sharing a household with others, or living as a roomer in a private home, lodging house, or in permanent living quarters in a hotel or motel, but who makes independent financial decisions;^⁠1 or
• two or more unrelated persons living together who pool their income to make joint expenditure decisions.

Students living in university-sponsored housing are also included in the sample as separate CUs. Information on members living in the CU is identified by their relationship to the reference person, who is defined as the first member mentioned by the respondent when asked to "start with the name of the person or one of the persons who owns or rents the home." Although sometimes used interchangeably, households and CUs are not the same; some households contain more than one CU.^⁠2 In publications, and with CE respondents, “household” is occasionally used for simplicity, but nevertheless refers to the CU. Survey participants report dollar amounts for goods and services purchased by any member of the CU during the reporting period, regardless of whether payment was made at the time of purchase. The Bureau of Labor Statistics (BLS) defines expenditures as the actual financial obligation incurred for goods or services acquired by the CU from a source outside the CU at the time of acquisition. Expenditure amounts for items purchased by the CU include all applicable sales and excise taxes. Excluded from expenditure total amounts are any business-related expenditures (e.g., travel, lodging, etc.) and expenditures for which the CU is reimbursed (e.g., reimbursed medical expenses).

The CE is not a consumption survey. Consumption refers to everything a CU consumes, while consumer expenditures are limited to everything a CU purchases. For example, an item purchased by someone outside the CU, and given to the CU to consume, would be considered consumption and not an expenditure. Similarly, an item made by a CU member, but not directly purchased, would also be considered consumption and not an expenditure. Other examples of nonexpenditure consumption include in-kind benefits, service flows from durable goods, home production, and barter. These examples demonstrate that the CU does not have to make any explicit expenditures for consumption to occur, which implies there are not always records of what a CU consumes. As a result, consumption at a household or individual level is inherently difficult to measure.