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Handbook of Methods Consumer Expenditures and Income Overview

Consumer Expenditures and Income: Overview

The Consumer Expenditure Surveys (CE) are nationwide household surveys conducted by the U.S. Bureau of Labor Statistics (BLS) to study how U.S. consumers spend their money. The surveys are the only federal government data collection effort to obtain information on the complete range of consumers’ expenditures, income, and demographic characteristics, in the same survey, directly from consumers. BLS publishes 12-month estimates of consumer expenditures annually, with the estimates summarized by various income levels and demographic characteristics. BLS also produces annual public use microdata files and an online database to help researchers analyze the data in more detail.

The CE consists of two separate surveys, the Interview Survey and the Diary Survey. BLS designs the Interview Survey to collect data on large and/or recurring expenditures that respondents can be expected to recall for a period of 3 months or longer. In general, expenditures reported in the Interview Survey are either relatively large, such as those for property, automobiles, and major appliances, or recur on a regular basis, such as for rent, utilities, or insurance. BLS designed the Diary Survey to collect data on frequently purchased items, which can be difficult to recall even a few weeks later. These items include food and beverage expenditures at home and in eating places; housekeeping supplies and services; nonprescription drugs; and most personal care products and services. Together, the data from the two surveys cover the complete range of consumer unit expenditures. The U.S. Census Bureau collects CE data for BLS.

CE data are unique in enabling data users to examine the association of expenditures and income of consumers to consumer unit characteristics. CE data are of value to government and private agencies interested in studying particular segments of the population, such as the elderly, low-income families, urban families, and those receiving Supplemental Nutrition Assistance Program food benefits. Economic policymakers use CE data to analyze the effects of policy changes on living standards across diverse socioeconomic groups, and econometricians find the data useful in constructing models to estimate economic outcomes. Market researchers find consumer expenditure data valuable in analyzing the demand for different goods and services. BLS uses the survey data to produce the Supplemental Poverty Measure (SPM) thresholds, which in turn are used by the Census Bureau to produce SPM statistics, and by the Bureau of Economic Analysis in revising its benchmark estimates of selected items in the expenditure and income components of the national accounts. The U.S. Department of Agriculture uses CE information to estimate the cost of raising a child from birth to age 18, and the Internal Revenue Service uses expenditure data from CE to calculate alternate sales tax standard deductions. In addition, the Department of Defense uses the data in determining cost-of-living allowances for military personnel living off military bases.

Another primary reason BLS undertakes the CE is to provide weights for the Consumer Price Index (CPI). That is, results of the CE are used to estimate upper-level spending weights for the Chained CPI for All Urban Consumers (C-CPI-U, monthly) and the CPI-U and CPI-W (annually) indexes as well as to the sampling weights for lower-level index calculations; to calculate item sampling probabilities (annual); and to derive outlet sample frame and selection probabilities for the CPI Commodities and Services Survey (semi-annual). In general, the CE provides expenditures at the lowest index level and then they are adjusted and aggregated to calculate data for CPI uses.