FEDS Paper: Shedding Light on Survey Accuracy—A Comparison between SHED and Census Bureau Survey Results
February 6, 2025
The Federal Reserve Board (FRB) has published a new paper, titled “Shedding Light on Survey Accuracy—A Comparison between SHED and Census Bureau Survey Results,” which compares the accuracy of the Survey of Household Economics and Decisionmaking (SHED) to the Current Population Survey (CPS) conducted by the U.S. Census Bureau.
Introduction
Accurate and reliable data on household finances and economic decision-making is crucial for policymakers and researchers. Two widely used surveys in this area are the SHED and the CPS. However, there has been limited research comparing the accuracy of these surveys.
Methodology
The FRB researchers used data from the 2014 and 2016 editions of SHED and the corresponding years of the CPS Annual Social and Economic Supplement (ASEC). They compared the estimates of a range of financial outcomes, including income, wealth, and debt, from both surveys.
Findings
The researchers found that the SHED estimates of income and wealth were higher than the CPS estimates in both years. The differences were more pronounced for high-income and high-wealth households.
The SHED estimates of debt were also higher than the CPS estimates, particularly for mortgage debt. However, the differences were smaller for other types of debt, such as credit card debt and student loan debt.
The researchers conducted a number of sensitivity analyses to test the robustness of their findings. These analyses confirmed the main results.
Discussion
The FRB paper provides new evidence on the accuracy of SHED and CPS. The findings suggest that SHED may overestimate the financial well-being of households, particularly among the wealthy. This has implications for the use of SHED data in policymaking and research.
The researchers note that the differences between SHED and CPS could be due to several factors, including differences in survey design, sampling methods, and response rates. They also suggest that the overestimation of wealth in SHED may be due to the fact that respondents tend to report their subjective perceptions of wealth rather than objective measures.
Conclusion
The FRB paper sheds light on the accuracy of SHED and CPS. The findings suggest that SHED may overestimate the financial well-being of households, particularly among the wealthy. This has implications for the use of SHED data in policymaking and research. Further research is needed to explore the reasons for the differences between SHED and CPS and to identify ways to improve the accuracy of both surveys.
FEDS Paper: Shedding Light on Survey Accuracy—A Comparison between SHED and Census Bureau Survey Results
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