asked by BLS to create potential redesigns that would put a greater emphasis on proactive data collection to improve measurement of consumer expenditures. This report summarizes the deliberations and activities of the panel. As summarized below and described more fully in its report, the panel drew four conclusions about the uses of the CE and 16 conclusions about why a redesign is needed. The panel also made 12 recommendations about future directions.
PURPOSES OF THE CE SURVEYS
The CE serves several important purposes. The most visible is for calculating the Consumer Price Index (CPI), one of the most widely used statistics in the United States. Calculating the CPI involves multiple data sources. The CE data provide budget shares (weights) for detailed expenditure categories. Much of this detail is not available elsewhere.
Another important use is to provide data critical for administering certain federal and state government programs. For the continuing administration of many of these programs, the CE is the only continuing source of data with sufficient information on households’ demographic characteristics, spending, and income.
In addition, the completeness of the CE in measuring household demographics and consumer expenditures, in combination with repeated measurement over a year for the same households, makes it a cornerstone for policy analysis and economic research. Understanding the differential effects of policies and events on consumer expenditures of all types, and the consequences for people of different ages, races, and ethnicities, sizes of households, and regions, relies upon the CE.
WHY THE CE INCLUDES TWO SURVEYS
The modern version of the CE, with its two independent surveys, was first fielded in 1972–1973. It has been conducted annually since 1980 with the same underlying design concept—different methods of data collection to collect different kinds of data.
The Interview survey was designed to collect expenditures that could be recalled for over three months. The focus was on large expenditures, such as property, automobiles, and major appliances, as well as regular expenditures, such as rent, utility bills, and insurance premiums. The Diary survey, on the other hand, was designed to obtain expenditures for smaller, frequently purchased items.
Over time, however, the Interview survey began to collect information on small, frequently purchased items, while the Diary now collects information on many larger items. Thus, the Interview and Diary now collect