An analysis of consumer panel data

In terms of collecting comprehensive panel expenditure data, there are trade-offs to be made in terms of the demands imposed on respondents and the level of detail and spending coverage collected. Existing comprehensive spending data tends to be cross-sectional whilst panel studies include only limited expenditure questions that record spending only as broad aggregates. More recently, economists have begun to use spending information collected by market research companies that records very detailed spending down to the barcode level from a panel of households, usually recorded by in-home barcode scanners, which may provide considerable advantages over existing data more commonly used in social sciences. However, there has not been a comprehensive assessment of the strengths and weaknesses of this kind of data collection method and the potential implications of survey mode on the recorded data. This paper seeks to address this, by an in-depth examination of scanner data from one company, Taylor Nelson Sofres (TNS), on grocery purchases over a five-year period. We assess how far the ongoing demands of participation inherent in this kind of survey lead to 'fatigue' in respondents' recording of their spending and compare the demographic representativeness of the data to the well-established Expenditure and Food Survey (EFS), constructing weights for the TNS that account for observed demographic differences. We also look at demographic transitions, comparing the panel aspect of the TNS to the British Household Panel Study (BHPS). We examine in detail the expenditure data in the TNS and EFS surveys and discuss the implications of this method of data collection for survey attrition. Broadly, we suggest that problems of fatigue and attrition may not be so severe as may be expected, though there are some differences in expenditure levels (and to some extent patterns of spending) that cannot be attributed to demographic or time differences in the two surveys alone and may be suggestive of survey mode effects. Demographic transitions appear to occur less frequently than we might expect which may limit the usefulness of the panel aspect of the data for some applications

The expenditure experience of older households

This commentary examines detailed trends in expenditure patterns between 1995 and 2007, with a particular focus on the pensioner population. Pensioners are not a homogeneous group, but differ widely in both their levels and patterns of spending, and so we look not just at pensioners as a whole but also at pensioners according to age, income, household composition and so on. Spending may tell us something about household welfare that other, often-used measures like incomes do not. In particular, it may be that spending is informative about long-run well-being whereas income is more about current, short-run living standards. Using data from the Family Expenditure Survey/Expenditure and Food Survey, an annual, cross-sectional study of the spending patterns of 6,000-7,000 households, we look in depth at changes in the level of real expenditures and how spending patterns have changed over time. Then, using data from two waves of the English Longitudinal Study of Ageing, we examine household fuel expenditures in detail. Fuel is clearly of great current policy concern given recent large increases in the price of domestic fuel that may impact particularly severely on poorer and older households

London's congestion charge

On 17 February 2003, one of the world's largest and most ambitious plans to tackle urban congestion began, with the introduction of a congestion charge for central London. It is hoped that this £5 daily charge for many vehicles entering the Inner Ring Road charging zone will significantly reduce the level of congestion faced by those travelling into and out of central London both by private and by public transport. In 2001, almost 1.1 million people entered central London during the morning peak hours of 7.00a.m.-10.00a.m.,1 of whom around 150,000 (13.7%) used private transport. Whilst the total number of people entering during the morning rush hour has scarcely changed since 1991, there has been a small shift towards public transport: in 1991, 16.8% of people used private transport. Nevertheless, average traffic speeds in central London have fallen slightly over the last decade, with the average morning peak-period traffic speed for 2000-03 just 9.9 mph, compared with a peak of 14.2 mph in 1974-76. During the evening rush hour, average speeds are even slower, at just 9.6 mph. In evidence to the House of Commons Transport Committee,3 David Begg of the Commission for Integrated Transport argues that around 40% of the total national level of congestion occurs in Greater London. Transport for London suggests that "there are now no longer any "peaks" or "off-peaks" of traffic volume between 7am - 6.30pm" and states that there are now on average three minutes of delay for every mile that a vehicle travels inside the charging zone. This Briefing Note aims to provide a guide to the workings of the London congestion charge. We begin in Section 2 by describing the economic case for congestion charging, showing why congestion can be thought of as an urban example of the well-known overuse of common resources to which there is free access (the so-called "tragedy of the commons"). In Section 3, we move on to look at the details of the proposed charge for London, examining how it fits in with the economic framework we develop and discussing some of the work that has already been carried out to try to predict the likely effects of the charge. Section 4 looks briefly at the issue of what may happen with the projected net revenues from the charge, which are legally bound for the first 10 years to be spent on transport within Greater London. In Section 5, we discuss some of the empirical evidence regarding transport in London and present evidence on the potential distributional effects of the congestion charge, since one of the oft-cited criticisms of charging is that it will impact upon the poorest most severely. Section 6 goes on to look at the experience of congestion charging elsewhere around the world

Consumption trends in the UK, 1975-99

How and why has the way in which the average British family spends its money changed over the past 25 years? Those are the key questions examined in this report, using data from the UK FES between 1975 and 1999. It looks not only at broad changes in total spending, but also at how the division of expenditure between basics and non-basics and between durable goods, non-durable goods and services has altered over time

Preparing for retirement: the pension arrangements andretirement expectations of those approaching state pension age in England

This paper provides a detailed analysis of individuals inhouseholds in England aged between 50 and the State PensionAge in terms of their private pension arrangements and currentnon-pension assets alongside their expectations of futureeconomic circumstances. Our descriptive findings include thatmembers of defined benefit pensions have higher average levelsof current earnings than members of defined contributionpensions and that median expected private pension income inretirement is highest for current members of defined benefitschemes. We find that on average those who have, or have had,a private pension have greater non-pension wealth than thosewho have never had a private pension. In terms of expectationsof the future we find that it is those who have the fewest assetswho have the least attachment to the labour market and are farless likely to expect any inheritance. Hence we conclude thatinequalities in different dimensions of retirement resources tendto reinforce themselves as opposed to offset each other

House Price Volatility and Housing Ownership over the Lifecycle

We develop and test a model on the effects of spatial housing price risk on housing choice. Housing price risk can be substantial but, unlike other risky assets which people can avoid, most people want to eventually own their home thereby creating an insurance demand for housing ownership early in life. With increasing demographic needs over the life cycle, our model predicts that people living in places with higher housing price risk should own their first home at a younger age, should live in larger homes, and should be less likely to refinance. These predictions are shown to hold using comparable panel data from the United States and United Kingdom. (JEL D12, D91

The inflation experience of older households

Recent increases in inflation have been accompanied by concerns over the extent to which official figures match the 'true' household experience of inflation. Rapid increases in the prices of household fuel, petrol and diesel and, more recently, of food have brought considerable attention to the fact that inflation will be different for different households according to their expenditure patterns. Any measure of inflation, such as the Retail Prices Index (RPI) or Consumer Prices Index (CPI), is necessarily only an average of the experience of different households and may not be especially representative of what is happening for any household in particular. Using data from the Expenditure and Food Survey, this Commentary looks at the inflation experience (based on the RPI) for different groups of households, examining how the average inflation rate they face has varied over time and making comparisons across the groups, focusing in particular on pensioner households

State pensions and the well-being of the elderly in the UK

This paper presents the trends seen over the last quarter of the 20thCentury in various indicators of the well-being of the elderlyalongside those seen for the young. Specifically we look at measuresof both the level and distribution of income and expenditure, andself-reported measures of life satisfaction and health. We thenexploit the substantial reforms to the UK pension system over thisperiod to examine the impact of reforms to state pensions on theseoutcomes. We find that increases in the generosity of state pensionshave led to increased incomes of the elderly and reductions inmeasures of both relative and absolute income poverty. We also findthat increased state pensions have led to increased expenditure bythe elderly. It is perhaps not surprising that in the UK the reformsto the generosity of state pensions have affected outcomes amongthe elderly (instead of being fully offset by individuals when theywere younger) given that often very little (pre-retirement) notice wasgiven, and that some of the reforms were of a substantial magnitude. This paper presents the trends seen over the last quarter of the 20thCentury in various indicators of the well-being of the elderlyalongside those seen for the young. Specifically we look at measuresof both the level and distribution of income and expenditure, andself-reported measures of life satisfaction and health. We thenexploit the substantial reforms to the UK pension system over thisperiod to examine the impact of reforms to state pensions on theseoutcomes. We find that increases in the generosity of state pensionshave led to increased incomes of the elderly and reductions inmeasures of both relative and absolute income poverty. We also findthat increased state pensions have led to increased expenditure bythe elderly. It is perhaps not surprising that in the UK the reformsto the generosity of state pensions have affected outcomes amongthe elderly (instead of being fully offset by individuals when theywere younger) given that often very little (pre-retirement) notice wasgiven, and that some of the reforms were of a substantial magnitude

The SES health gradient on both sides of the Atlantic

In this paper we investigate the size of health differences that exist among men in England and the United States and how those differences vary by Socio-Economic Status (SES) in both countries. Three SES measures are emphasized - education, household income, and household wealth - and the health outcomes investigated span multiple dimensions as well. International comparisons have played a central part of the recent debate involving the 'SES health gradient' with some authors citing cross-country differences in levels of income equality and mortality as among the most compelling evidence that unequal societies have negative impacts on individual health outcomes. In spite of the analytical advantages of making such international comparisons, until recently good micro data measuring both SES and health in comparable ways have not been available for both countries. Fortunately, that problem has been remedied with the fielding of two surveys - the Health and Retirement Survey (HRS) and the English Longitudinal Survey of Aging (ELSA). In order to facilitate the type of research represented in this paper, both the health and SES measures in ELSA and HRS were purposely constructed to be as directly comparable as possible. Our analysis presents data on some of the most salient issues regarding the social health gradient in health and the manner in which this health gradient differs for men across the two countries in question. There are a several key findings. First, looking across a wide variety of diagnosed diseases, average health status among mature men is much worse in America compared to England, confirming non-gender specific findings we reported in earlier research. Second, there exists a steep negative health gradient for men in both countries where men at the bottom of the economic hierarchy are in much worse health than those at the top. This social health gradient exists whether education, income, or financial wealth is used as the marker of SES. While the negative social gradient in male health characterizes men in both countries, it appears to be steeper in the United States. These central conclusions are maintained even after controlling for a standard set of behavioral risk factors such as smoking, drinking, and obesity and are equally true using either biological measures of disease or individual self-reports. In contrast to these disease based measures of health, the health of American men appears to be superior to the health of English men when self-reported subjective general health status is used as the measure of health status. This apparent contradiction does not result from differences in co-morbidity, emotional health, or ability to function all of which still point to mature American men being less healthy than their English counterparts. The contradiction most likely stems instead from different thresholds used by Americans and English when evaluation their health status on subjective scales. For the same 'objective' health status, Americans are much more likely to say that their health is good than are the English. Finally, we present preliminary data that indicates that feedbacks from new health events to household income are also one of the reasons that underlie the strength of the income gradient with health in England. Previous research has demonstrated its importance as one of the underlying causes in the United States and these results suggest that that conclusion should most likely be extended to England as well although further research is required on this topic