New expenditure data in the psid: comparisons with the ce

Monthly Labor Review

Volumn 133, Issue 2, 2010, Pages 29-39

  Li, Geng ^a   Schoeni, Robert F ^b   Danziger, Sheldon ^b   Charles, Kerwin Kofi ^c  

^a FEDERAL RESERVE BOARD   (United States)

^b UNIVERSITY OF MICHIGAN   (United States)

^c UNIVERSITY OF CHICAGO   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 77953671014     PISSN: 00981818     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (19)

1. The 2001 and 2003 Consumption and Activities Mail Surveys, supplements to the Health and Retirement Study, gathered comprehensive assessments of expenditures of people 50 years and older, allowing longitudinal analyses of consumption in this panel study
2. John Fitzgerald, Peter Gottschalk, and Robert Moffitt, "An Analysis of Sample Attrition in Panel Data," Journal of Human Resources, Spring 1998, pp. 251-99
3. Sean Becketti, William Gould, Lee Lillard, and Finis Welch, "The Panel Study of Income Dynamics after Fourteen Years: An Evaluation," Journal of Labor Economics, October 1988, pp. 472-92.
4. The use of so-called unfolding brackets in the PSID questions on wealth has been found to reduce item nonresponse substantially. (See Thomas Juster and James P. Smith, "Improving Quality of Economic Data: Lessons from the HRS and AHEAD," Journal of the American Statistical Association, March,1997, pp. 1268-78.).
5. The health care expenditure questions added in 1999 also offer respondents unfolding brackets. For example, if the respondent says "don't know" when asked the amount spent on prescription drugs, in-home medical care, special facilities, and other services combined, the respondent is asked, "Would it amount to $5,000 or more?" If the respondent says "yes," then he or she is asked in subsequent questions whether it is more than $10,000 and then more than $20,000. If the respondent says "no," then he or she is asked in subsequent questions whether it was more than $1,000. If the respondent says "no" again, he or she is then asked if the amount was more than $500. If the respondent continues to respond "don't know," the series of questions is terminated.
6. Over the 1999, 2001, and 2003 waves analyzed in this article, 15 respondents had expenditures in one category that were several orders of magnitude larger than the average spending across all families for that category. In these cases, the value was assumed to be invalid and was imputed using the same approach used for item nonresponse (described subsequently).
7. David Cutler and Lawrence Katz, "Rising Inequality? Changes in the Distribution of Income and Consumption in the 1980s," American Economic Review, May 1992, pp. 546-51.
8. Consumer Expenditure Survey Anthology, 2003, Report 967 (Bureau of Labor Statistics, 2003), on the Internet at www.bls.gov/cex/csxanthol03.pdf (visited March 3, 2010).
9. A consumer unit is defined as (1) all members of a household who are related by blood, marriage, adoption, or some other legal arrangement; (2) a person living alone or sharing a household with others, living as a roomer in a private home or lodging house, or living permanently in a hotel or motel, but who is financially independent; or (3) two or more persons living together who combine their incomes and make joint expenditure decisions. Financial independence is determined by three expense categories: housing, food, and other living expenses. To be considered financially independent, the respondent must provide expenditures, either entirely or in part, in at least two of the three categories.
10. Consumer Expenditure Survey, 2000: Interview Survey and Detailed Expenditure Files (Bureau of Labor Statistics, 2002), distributed by Inter-university Consortium for Political and Social Research, Ann Arbor, MI, 2002
11. Ibid., p. 247.
12. Note that the conventional method for imputing consumption expenditure is to apply a linear transformation to the stock of durable goods. If expenditure outlays on durables are similar across the two surveys, it is likely that the stock of durables and the flows of services would be similar across the surveys as well.
13. Because of the evolving structure of the CE sample design, the weight assigned to each consumer unit changes over quarters. Therefore, the annual weighted mean is computed by adding four quarterly weighted means together. (For details, see Consumer Expenditure Survey, 2000.)
14. Comparisons of life-cycle profiles for detailed expenditure categories are reported in Kerwin Kofi Charles, Sheldon Danziger, Geng Li, and Robert Schoeni, Studying Consumption with the Panel Study of Income Dynamics: Comparisons with the Consumer Expenditure Survey and an Application to the Intergenerational Transmission of Well-being, Finance and Economics Discussion Series (Washington, DC, Federal Reserve Board, 2007)
15. Jonathan Skinner, "A Superior Measure of Consumption from the Panel Study of Income Dynamics," Economics Letters, February 1987, pp. 213-16.
16. Jonathan D. Fisher and David S. Johnson, "Consumption Mobility in the United States: Evidence from Two Panel Data Sets," Topics in Economic Analysis and Policy, vol. 6, no. 1, 2006, Article 16, on the Internet at www.bepress.com/bejeap/topics/vol6/iss1/art16 (visited March 4, 2010). Another distinction between Fisher and Johnson's imputation and the one presented here is that they focus on consumption, instead of expenditure, by replacing durable goods and housing expenditures with estimated service flows.
17. Bruce Meyer and James Sullivan, "Changes in the Consumption, Income, and Well-Being of Single Mother Headed Families," American Economic Review, December 2008, pp. 2221-41.
18. See Gary Solon, "Intergenerational Income Mobility in the United States," American Economic Review, June 1992, pp. 393-408
19. Kerwin Kofi Charles and Erik Hurst, The Correlation of Wealth Across Generations," Journal of Political Economy, December 2003, pp. 1155-82.