Office of Survey Methods Research

Abstract

William Passero, Thesia I. Garner, and Clinton McCully (2013) "Understanding the Relationship: CE Survey and PCE"

For the United States, there are currently two federal series of data that refer to household expenditures. One is produced by the Bureau of Labor Statistics, using the Consumer Expenditure Survey (CE), and the other is produced by the Bureau of Economic Analysis, personal consumption expenditures (PCE). Weights for the Consumer Price Index (CPI) are based on CE data. However, over the years, suggestions have been made to use PCE rather than the CE as the source of weights for the CPI. Much research had been conducted to reconcile differences in scope and definitions in the CE and PCE. Included in this paper is a review of these differences along with aggregate estimates that result when one accounts for the differences. Such an exercise is important; however, to compare trends in CE and PCE over time, a concordance of comparable items in both the CE and PCE is desirable. Independently, the BLS divisions responsible for the CE and CPI have produced concordances of the CE to PCE data; staff members at BEA have also produced their own concordances. These three independent exercises have resulted in three different concordances. In this paper, a new joint concordance, developed by staff in the BEA and BLS, is presented. Using this concordance, similarities and differences in the CE and PCE are highlighted along with trends in ratios of aggregate CE and PCE over the 1992 to 2010 time period. Aggregate expenditures and ratios of CE to PCE are produced for durables, non-durables, and services Results suggest that non-durables are most alike for the CE and PCE with about 93 percent of total non-durable expenditures identified as comparable within the CE and within the PCE. Regarding trends over time and focusing on comparable goods and services only, CE to PCE ratios have steadily decreased. For total comparable goods and services, CE to PCE ratios decreased from 84 percent for 1992 to 74 percent for 2010. The greatest decline in CE to PCE ratios is for durables, with a decrease of 24 percentage points. Ratios for comparable services dropped the least, with a percentage decrease of 10 percentage points.

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