Question 1: Do you need total expenditures for each household, as opposed to some expenditure categories collected from one set of households, and other categories collected from another set of households?

Federal Reserve: Dr. Li’s use of the data would be severely impacted by this suggestion. He needs the big picture, how expenditures are related to a balance sheet. He does not know how to most efficiently use the data in this scenario. However, if the CE kept all sections for all households, but did global questions for some sections and detailed questions for others, that might work.

Centers for Medicare & Medicaid Services: Primarily use the health care section as well as income, with possible use of taxes for analysis.

Economic Research Service: Collecting some sections from some households and other sections from other households would make Dr. Hanson a little nervous about being able to do analysis of household food expenditures in the context of expenditures on other categories of goods and services (complete demand system). This survey strategy could work if enough households have at least one question per category, and then go into detail for a subset of sections for different households. He urged trying to get a large enough sample of detailed questions by category so that the analyst can distinguish different types of households, perhaps by household size and income.

Bureau of Economic Analysis: BEA worries that such a plan would eliminate the possibility of looking at substitution effects. However, the problem of underreporting of certain kinds of expenditures is so severe that a strategy of asking each respondent about only a subset of expenditures should be considered. By having sets of overlapping modules in which different respondents report on different combinations of expenditure categories, researchers who are willing to make some assumptions should still be able to study substitution effects.

Question 2: Is the panel nature of the survey important, i.e., do you need to follow households quarterly or is an annual number workable? Related, would fewer collections per household work (e.g., three times per year or twice a year)?

Federal Reserve: The strong preference is for a panel-nature survey, and even a longer panel would be extremely useful for Dr. Li’s work. A modified design where the visits are every six months over two years (same number of collections) has some appeal for Dr. Li.



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