Asking Households about Expenditures: What Have We Learned?

There is mounting evidence of problems with the household budget surveys conducted by national statistical agencies in many countries. When designing household surveys, including surveys that measure consumption expenditure, numerous choices need to be made. Which survey mode should be used? Do recall questions or diaries provide more reliable expenditure data? How should the concept of a household be defined? How should the length of the recall period, the level of aggregation of expenditure items, and the response format be chosen? How are responses affected by incentives? Can computer-assisted surveys be used to reduce or correct response error in real time? In this chapter, we provide a selective review of the literature on these questions. We also suggest some promising directions for future research.