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At What Price?: Conceptualizing and Measuring Cost-of-Living and Price Indexes
consider the possibility of merging the two into a single survey. Intuitively, it seems there should be economies of scale in combining them, as well as advantages to having more complete records (both expenditure and shopping pattern data) for each household. While we do think this possibility is worth investigating, there are many complicating factors. To begin with, the reference periods are now different for the two surveys. The quantity weights from the CEX require updating over a longer periodic cycle—formerly every 10 years, but now moving to every 2 years (without necessarily implying a change in the item structure every 2 years); outlet rotation weighting, based on POPS, is done every 4-5 years on average and, since POPS is a continuously rotating survey, a subset of items and areas is considered for change every quarter. Whether or not these are optimal frequencies has not been determined. It is possible that adequate rotation and weighting schemes could be produced from a single survey, but at present the issue remains largely unexplored.
The level of item detail needed to obtain CPI item strata weights and to select outlets and ELI samples is also different in the two surveys. Since POPS asks about product expenditure in greater categorical detail, it is generally believed that it requires a larger sample size to produce accurate probability schedules. It is possible that a unified survey could partition respondents into two or more groups, with some being asked more detail than others (something akin to the census short and long forms). Respondent burden could also be reduced if each household continues to be asked only about a subset of CPI items.
Defenders of the current system could also point out that a combined survey that generates expenditure, demographic, and outlet information concentrates respondent burden unnecessarily. Detailed demographic information is missing from the current POPS; outlet usage information and adequate sample size are missing from the CEX. A combined survey would likely entail greater demands on any given respondent, and the CEX is already considered one of the most burdensome government surveys. There is also a range of data quality issues that would require investigation. The CEX sample may be more representative of the population since it is based on samples drawn from census household files, not on random digital telephone sampling as is the POPS. Each CEX household also reports on a larger share of total household expenditures than does a POPS respondent. Further complicating the issue is the fact that the CEX is used for research and policy purposes other than the CPI.
The most obvious advantage of the multisurvey data system now in place is that—relative to the size of expensive consumer surveys—a large number of price quotes can be generated (and at a reasonable cost) for each specific item that is ultimately tracked by the CPI. This is because price data are not linked to specific households. Households provide just enough information for BLS to assign weights to broad item categories and to identify high-use outlets. If prices had to be gathered from households in the manner laid out in Chapter 8, the survey would presumably have to be much larger (than either the current POPS or