1. Consumer Expenditure Survey Redesign Jennifer Edgar Bureau of Labor Statistics COPAFS Quarterly Meeting March 4, 2011

2. 1.Challenges facing CE 2.Redesign overview 3.2010 Methods Workshop Outline

3. Challenges Facing CE: Motivation for Redesign

4. Motivation for Redesign  Reducing measurement error  Maintaining/improving response rates  Meeting user needs  Changes in society and technology  Need for flexibility

5. Measurement Error: Evidence  The ratio of CE aggregate expenditures to PCE aggregate expenditures for many spending categories has shown a declining trend  Subgroup comparisons show differences in expenditure reporting by mode of interview and use of recall aids  The 2008 CE Internal Program Review Report cites item nonresponse and measurement error as areas of concern 5

6. Measurement Error: Possible Sources  Complexity: detailed information  Conditioning: 22 sections, 5 waves  Proxy reporting: household respondent  Recall effects: 3-month reference period  Survey length: 60 minute average  Telephone administration: 33% 6

7. Motivation: Response Rates

8. Meeting User Needs Varied users:  CPI  Bureau of Economic Analysis (BEA)  IRS  U.S. Defense Department  U.S. Bureau of the Census  Other federal and state agencies  Businesses, researchers and the general public

9. Meeting User Needs Varied needs:  Detailed monthly expenditure estimates  Annual household expenditures  By demographic subgroup  By geographic region  Housing values and rental equivalence  Sales tax information

10. Changes in Society and Technology Shifts in consumer behaviors  Automatic withdrawals  Online bill paying  Online shopping  Big box stores (e.g. Target, Costco) Technological advances  Increasing respondent use of technology (internet, smart phones)  Emergence of new data collection methods

11. Need for Flexibility  Allow for faster implementation of changes  To respond to changes in marketplace  To incorporate changes in data collection technology  Allow for mixed-mode interviewing

12. Redesign Overview: Gemini

13. Mission  Improve data quality through a verifiable reduction in measurement error, with a particular focus on under-reporting Objective  Develop a detailed research plan for implementing a redesign of the CE surveys, including piloting, evaluation, and transition

14. Gemini Tasks 2009-2010  Produce database of CE research  Refine data requirements and priorities  Define data quality for CE 2010-2011  Sponsor internal and external events for information gathering and expert review

15. Gemini Tasks 2010-2013  Conduct research 2012  Assess user impact of design alternatives 2013  Recommend a survey redesign  Propose a transition roadmap 2013 +  Piloting, Evaluation, Transition 15

16. Gemini Research Current research addressing:  Recall period  Interview frequency  Split questionnaire designs  Interview length and reporting quality  Records availability and utility  Feasibility of a balance edit  Individual diaries  Online diaries

17. Gemini Project Website www.bls.gov/cex/geminimaterials.htm  Gemini overview  Gemini events  Gemini presentations  CE survey methods research  CE methods and survey forms  Other redesign related events and studies 17

18. 2010 Methods Workshop

19. Objectives:  Identify existing knowledge on key topics  Obtain recommendations for research to support and inform the CE redesign

20. Workshop Approach Identified  Five key survey topics  Two experts for each topic  Write paper and give presentation  Additional experts to participate in discussion BLS ‘issue papers’  Explaining why the topic is considered key  Describing existing CE research  Asking key questions for redesign process

21. Methods Workshop Topics  Proxy Reporting  Recall  Interview Structure  Global Questions  Split Questionnaire Designs  CE “From Scratch”  Next Steps

22. Methods Workshop Results  Papers and presentations provided useful information on each topic  Discussion allowed CE to ask follow-up questions and refocus discussion  No absolute answers or definite research projects identified, but promising leads in many directions

23. Key Recommendations 1 Identify objectives  For the survey  Minimum CPI requirements −Can they be changed?  Key estimates produced −What is required in the future?  For the redesign  Identify metrics to evaluate redesign alternatives and final implemented design

24. Key Recommendations 2 Reconsider recall  Respondents may not be able to accurately recall the expenditure information  Respondents may not have encoded the expenditure information  Automatic payments  Proxy issues  Respondents may not align memories with CE categories or interview structure 24

25. Key Recommendations 3 “It depends...”  The effectiveness/feasibility of most issues vary by expenditure category, CU type, etc.  Proxy reporting  Long/short recall periods  Flexible or rigid interview structures  Global questions  Use of technology

26. Jennifer Edgar Office of Survey Methods Research Bureau of Labor Statistics edgar.jennifer@bls.gov