Reclassifying Low- Expenditure Consumer Units in the Consumer Expenditure Interview Survey

O ne of the primary uses of data from the Consumer Expenditure Survey (CE) is the computation of weights representing the purchases of goods and services in the construction of the Consumer Price Index (CPI), a principal Federal economic indicator. Accurate representation of actual expenditures is thus critically important beyond usual data quality standards. The CE processing system has several screening processes in place to ensure data quality. One such process is the minimal expenditure edit, which screens out consumer units (CUs) 1 with unusually low reported total expenditures for further investigation, to determine whether they should be reclassified as noninter-views—that is, whether they should be treated as if they had refused to take part in the survey. Data from noninter-views are not used in the computation of official expenditure estimates from the CE. A minimal expenditure edit has been implemented for the CE Diary Survey since 2002. In April 2006, a minimal expenditure edit was implemented for the CE Interview Survey, to investigate cases with very low expenditures. This article describes the methodology of the minimal expenditure edit for the Interview Survey, as well as the results attained from its first year of implementation. Background Both Interview and Diary Survey data go through a series of edits before publication. Among these edits are consistency checks, outlier review, imputation, and weighting. Minimal expenditure edits for both surveys take place early in the production process, prior to CU weighting and any expenditure or income imputation. Although the minimal expenditure edit process for each survey is essentially the same, a number of differences exist because the Diary Survey is self-administered while the Interview Survey is administered by a field interviewer. For the Diary Survey, respondents record all their expenditures in a diary for two consecutive 1-week periods. It is difficult to ensure that a respondent has completed the Diary form accurately, including all of his or her expenditures, because no one is observing the process. For this reason, the minimal expenditure edit process for the Diary Survey is much more structured than that for the Interview Survey. The Diary minimal expenditure edit process uses the number of expenditures recorded, the total amount recorded , and CU characteristics (such as the size of the CU) to determine whether a low report for total expenditures by a CU is legitimate. As part of the reclassification algorithm, urban CUs have to meet a higher expenditure …