Reduction of Sample Areas in the Consumer Price Index and Consumer Expenditure Survey Designs

Lawrence R. Ernst, William H. Johnson, and William E. Larson

Abstract

The Consumer Price Index (CPI) and the Consumer Expenditure Survey (CE) are surveys with multistage designs, revised every 10 years. The first stage CPI and CE samples include a set of areas (PSUs) selected from the set of U.S Core Based Statistical Areas. CE additionally selects a set of PSUs to represent the rest of the nation. After selecting the original sample of PSUs, a reduction was considered for budgetary reasons, a reduction implemented in CE only. In this paper we describe: the details of the reduction process used and alternative approaches; the adjustment of the PSU weights resulting from the reduction, which was complicated by the use of a maximization of overlap procedure in the original selection of the new sample PSUs; possible improvements to the overlap procedure in the next redesign; and the impact of having different sets of CPI and CE sample PSUs.