DP14730 The Insights and Illusions of Consumption Measurements

Author(s): Erich Battistin, Michele De Nadai, Nandini Krishnan
Publication Date: May 2020
Keyword(s): Household Surveys, Measurement of Inequality and Poverty, Modes of Data Collection
JEL(s): C81, D31, D63, E21, I32
Programme Areas: Labour Economics, Public Economics, Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=14730

While household well-being derives from long-term average rates of consumption, welfare comparisons typically rely on shorter-duration survey measurements. We develop a new strategy to identify the distribution of these long-term rates by leveraging a large-scale randomization that elicited repeated short-duration measurements from diaries and recall questions. Identification stems from diary-recall differences in reports from the same household, does not require reports to be error-free, and hinges on a research design with broad replicability. Our strategy delivers cost-effective suggestions for designing survey modules that yield the closest measurements of consumption well-being, and offers new insights to interpret and reconcile diary-recall differences in household surveys.