The CE and the PCE: a comparison: an analysis of a decline in the ratios of aggregate spending for various categories of expenditures from the BLS Consumer Expenditure Survey and the BEA's Personal Consumption Expenditures over an 11-year period employs a new methodology that takes into account the degree of comparability of those categories

Monthly Labor Review, Sept, 2006 by Thesia I. Garner, George Janini, William Passero, Laura Paszkiewicz, Mark Vendemia

Yet later, "The panel Concluded that it is likely that the CEX estimates of consumer expenditure shares are biased, perhaps seriously." (32) The panel recommended that the CE be carefully evaluated and that the net advantages of using the PCE to produce upper-level weights for the CPI be included in the evaluation (Recommendation 9-1). (33) No direct evaluation of the PCE was recommended. In Recommendation 9-2, the panel recommended that a program be set up to produce an experimental CPI based on PCE weights if the categories in the CE and PCE can be reasonably matched so that comparable item strata indexes can be created. (34)

Other users familiar with the CE and the PCE also have raised concerns about the increasing spread between aggregate expenditures reported in the CE and the corresponding PCE estimates. (35) Drawing on all these discussions and other informal contacts with users concerned with this issue, the Bureau has worked to produce the best comparisons of CE and PCE aggregate expenditures possible. (36)

Basic concepts and methods

The CE and the PCE are designed to represent a similar concept of total consumption expenditures; however, they follow different paths to obtain their estimates. (37) Simply put, the Bureau of Labor Statistics collects CE expenditure data through sample surveys and weights the results to obtain population estimates. The Bureau of Economic Analysis, in contrast, calculates PCE estimates on the basis of industry production data collected in economic censuses and through surveys conducted by outside agencies. There are clear differences in the types of expenditure data obtained, dictated by the data collection methods and data sources used by the two Agencies. In addition, the populations covered by the CE and the PCE differ.

The CE program covers consumer-unit purchases of goods and services used in day-to-day living. Data for the CE are reported directly by consumers through two components--the Diary Survey and the quarterly Interview Survey--administered by the Census Bureau. Respondents are instructed to report the out-of-pocket expenditures, including all excise and sales taxes, of all members of the consumer unit. A sample of consumer units separate and independent from the sample participating in the quarterly Interview component of the CE participates in the Diary component.

The Diary Survey is intended to capture everyday purchases, such as groceries, and lower cost items, such as laundry detergent. Respondents to the Diary component list all expenditures made for two consecutive 1-week periods.

The Interview Survey is designed to collect expenditures on major items of expense, such as property or vehicles, and on those items for which outlays occur on a regular basis, such as rent or utilities. Respondents are encouraged to use records in reporting expenditures, but also can use recall to report expenditures over the 3-month reference period of each interview. For the Interview Survey, respondents report data to an interviewer once per quarter for four consecutive quarters.