IDEAS home Printed from https://ideas.repec.org/p/cpd/pd2002/c4-2.html
   My bibliography  Save this paper

Errors in Survey Reports of Consumption Expenditures

Author

Listed:
  • Erich Battistin

    (Institute for Fiscal Studies, London)

Abstract

This paper considers data quality issues to analyze the pattern of consumption inequality in the 1990s exploiting two complementary datasets from the US Consumer Expenditure Survey. The Interview sample follows survey households over four calendar quarters and consists of retrospectively asked information about monthly expenditures on durable and non-durable goods. The Diary sample interviews household for two consecutive weeks, and it includes detailed information about frequently purchased items (food, personal cares and household supplies). Each survey has its own questionnaire and sample. We exploit information from one sample as an instrument for the other to derive a correction for the measurement error affecting observed measures of consumption. We produce some evidence of non-classical measurement error affecting the aggregate measure of consumption both for diary and recall based data; we also show the implications of our findings to test for the Permanent income hypothesis.

Suggested Citation

  • Erich Battistin, 2002. "Errors in Survey Reports of Consumption Expenditures," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 C4-2, International Conferences on Panel Data.
    • Handle: RePEc:cpd:pd2002:c4-2
    as

    Download full text from publisher

    File URL: http://econpapers.repec.org/cpd/2002/40_Battistin.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Martin Browning & Thomas F. Crossley & Guglielmo Weber, 2003. "Asking consumption questions in general purpose surveys," Economic Journal, Royal Economic Society, vol. 113(491), pages 540-567, November.
    2. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
    3. Banks, James & Blundell, Richard & Tanner, Sarah, 1998. "Is There a Retirement-Savings Puzzle?," American Economic Review, American Economic Association, vol. 88(4), pages 769-788, September.
    4. Erich Battistin & Raffaele Miniaci & Guglielmo Weber, 2003. "What Do We Learn from Recall Consumption Data?," Journal of Human Resources, University of Wisconsin Press, vol. 38(2).
    5. Andrew Chesher & Christian Schluter, 2002. "Welfare Measurement and Measurement Error," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(2), pages 357-378.
    6. Stephen Machin & Alan Manning, 1992. "Minimum Wages," CEP Discussion Papers dp0080, Centre for Economic Performance, LSE.
    7. van Praag, B M S & Vermeulen, E M, 1993. "A Count-Amount Model with Endogenous Recording of Observations," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(4), pages 383-395, Oct.-Dec..
    8. Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843, Elsevier.
    9. Attanasio, Orazio P & Weber, Guglielmo, 1995. "Is Consumption Growth Consistent with Intertemporal Optimization? Evidence from the Consumer Expenditure Survey," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1121-1157, December.
    10. Alessie, Rob & Gradus, Raymond H J M & Melenberg, Bertrand, 1990. "The Problem of Not Observing Small Expenditures in a Consumer Expenditure Survey," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 5(2), pages 151-166, April-Jun.
    11. Angus Deaton & Christina Paxson, 2000. "Growth and Saving Among Individuals and Households," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 212-225, May.
    12. Lewbel, Arthur, 1996. "Demand Estimation with Expenditure Measurement Errors on the Left and Right Hand Side," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 718-725, November.
    13. Torelli, Nicola & Trivellato, Ugo, 1993. "Modelling inaccuracies in job-search duration data," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 187-211, September.
    14. Slesnick,Daniel T., 2001. "Consumption and Social Welfare," Cambridge Books, Cambridge University Press, number 9780521497206, October.
    15. Wilcox, David W, 1992. "The Construction of U.S. Consumption Data: Some Facts and Their Implications for Empirical Work," American Economic Review, American Economic Association, vol. 82(4), pages 922-941, September.
    16. Richard Blundell & Ian Preston, 1998. "Consumption Inequality and Income Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(2), pages 603-640.
    17. Martin Browning & Annamaria Lusardi, 1996. "Household Saving: Micro Theories and Micro Facts," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1797-1855, December.
    18. Deaton, Angus & Paxson, Christina, 1994. "Intertemporal Choice and Inequality," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 437-467, June.
    19. Hausman, J. A. & Newey, W. K. & Powell, J. L., 1995. "Nonlinear errors in variables Estimation of some Engel curves," Journal of Econometrics, Elsevier, vol. 65(1), pages 205-233, January.
    20. Pischke, Jorn-Steffen, 1995. "Measurement Error and Earnings Dynamics: Some Estimates from the PSID Validation Study," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(3), pages 305-314, July.
    21. Winter, Joachim, 0000. "Design effects in survey-based measures of household consumption," Sonderforschungsbereich 504 Publications 02-34, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    22. Orazio P. Attanasio, 1998. "Cohort Analysis of Saving Behavior by U.S. Households," Journal of Human Resources, University of Wisconsin Press, vol. 33(3), pages 575-609.
    23. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, October.
    24. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
    25. Garner, Thesia I, 1993. "Consumer Expenditures and Inequality: An Analysis Based on Decomposition of the Gini Coefficient," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 134-138, February.
    26. Anthony F. Shorrocks, 1983. "The Impact of Income Components on the Distribution of Family Incomes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(2), pages 311-326.
    27. Perri, Fabrizio & Krueger, Dirk, 2002. "Does Income Inequality Lead to Consumption Inequality?," CEPR Discussion Papers 3583, C.E.P.R. Discussion Papers.
    28. Ziliak, James P., 1998. "Does the choice of consumption measure matter? An application to the permanent-income hypothesis," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 201-216, February.
    29. Blundell, Richard & Preston, Ian & Pistaferri, Luigi, 2002. "Partial Insurance, Information, and Consumption Dynamics," CEPR Discussion Papers 3666, C.E.P.R. Discussion Papers.
    30. Joel L. Horowitz & Marianthi Markatou, 1996. "Semiparametric Estimation of Regression Models for Panel Data," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 63(1), pages 145-168.
    31. Li, Tong & Vuong, Quang, 1998. "Nonparametric Estimation of the Measurement Error Model Using Multiple Indicators," Journal of Multivariate Analysis, Elsevier, vol. 65(2), pages 139-165, May.
    32. Joel L. Horowitz & Marianthi Markatou, 1993. "Semiparametric Estimation Of Regression Models For Panel Data," Econometrics 9309001, University Library of Munich, Germany.
    33. Slesnick, Daniel T, 1998. "Are Our Data Relevant to the Theory? The Case of Aggregate Consumption Expenditures, and Empirical Consumption and Savings," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(1), pages 52-61, January.
    34. Lusardi, Annamaria, 1996. "Permanent Income, Current Income, and Consumption: Evidence from Two Panel Data Sets," Journal of Business & Economic Statistics, American Statistical Association, vol. 14(1), pages 81-90, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Erich Battistin & Raffaele Miniaci & Guglielmo Weber, 2003. "What Do We Learn from Recall Consumption Data?," Journal of Human Resources, University of Wisconsin Press, vol. 38(2).
    2. Orazio Attanasio & Erich Battistin & Hidehiko Ichimura, 2004. "What Really Happened to Consumption Inequality in the US?," NBER Working Papers 10338, National Bureau of Economic Research, Inc.
    3. Orazio P. Attanasio, 1998. "Consumption Demand," NBER Working Papers 6466, National Bureau of Economic Research, Inc.
    4. Kelley, Clare & Lanot, Gauthier, 2002. "Consumption Patterns Over Pay Periods," Economic Research Papers 269469, University of Warwick - Department of Economics.
    5. Yingyao Hu & Geert Ridder, 2012. "Estimation of nonlinear models with mismeasured regressors using marginal information," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 27(3), pages 347-385, April.
    6. José Casado, 2011. "From income to consumption: measuring households partial insurance," Empirical Economics, Springer, vol. 40(2), pages 471-495, April.
    7. Xiaohong Chen & Yingyao Hu, 2006. "Identification and Inference of Nonlinear Models Using Two Samples with Arbitrary Measurement Errors," Cowles Foundation Discussion Papers 1590, Cowles Foundation for Research in Economics, Yale University.
    8. Orazio P. Attanasio & Tullio Jappelli, 2001. "Intertemporal Choice And The Cross-Sectional Variance Of Marginal Utility," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 13-27, February.
    9. Martin Browning & Thomas F. Crossley, 2001. "The Life-Cycle Model of Consumption and Saving," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 3-22, Summer.
    10. Alessandro Bucciol, 2007. "Life-Cycle Models, Economic Puzzles and Temptation Preferences," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 66(1), pages 115-144, March.
    11. Geert Ridder & Yingyao Hu, 2004. "Estimation of Nonlinear Models with Measurement Error Using Marginal Information," Econometric Society 2004 North American Summer Meetings 21, Econometric Society.
    12. Ziliak, James P., 1998. "Does the choice of consumption measure matter? An application to the permanent-income hypothesis," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 201-216, February.
    13. Julian Thimme, 2017. "Intertemporal Substitution In Consumption: A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 31(1), pages 226-257, February.
    14. Hoderlein, Stefan & Winter, Joachim, 2010. "Structural measurement errors in nonseparable models," Journal of Econometrics, Elsevier, vol. 157(2), pages 432-440, August.
    15. Primiceri, Giorgio E. & van Rens, Thijs, 2009. "Heterogeneous life-cycle profiles, income risk and consumption inequality," Journal of Monetary Economics, Elsevier, vol. 56(1), pages 20-39, January.
    16. Richard Blundell & Hamish Low & Ian Preston, 2013. "Decomposing changes in income risk using consumption data," Quantitative Economics, Econometric Society, vol. 4(1), pages 1-37, March.
    17. Blundell, Richard & Preston, Ian & Pistaferri, Luigi, 2002. "Partial Insurance, Information, and Consumption Dynamics," CEPR Discussion Papers 3666, C.E.P.R. Discussion Papers.
    18. Parker, J.A., 1997. "The Reaction of Household Consumption to Predictable Changes in Payroll Tax Rates," Working papers 9724, Wisconsin Madison - Social Systems.
    19. Jonathan A. Parker, 1999. "The Reaction of Household Consumption to Predictable Changes in Social Security Taxes," American Economic Review, American Economic Association, vol. 89(4), pages 959-973, September.
    20. Thomas F. Crossley & Peter Levell & Stavros Poupakis, 2022. "Regression with an imputed dependent variable," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 37(7), pages 1277-1294, November.

    More about this item

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpd:pd2002:c4-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sune Karlsson (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.