New Evidence on Consumption and Income Dynamics from a Consumer Payment Diary

New Evidence on Consumption and Income Dynamics from a Consumer Payment Diary

Shaun Gilyard, Scott Schuh

Conference paper

NBER

2022

The 2012 (first) U.S. Diary of Consumer Payment Choice (DCPC) unexpectedly yielded daily data on transaction-level consumption that closely tracks aggregate U.S. data (Schuh, 2018). This paper extends the analysis through 2020. Innovations to the survey instrument improved consumption data precision and added after-tax income receipts that closely track aggregate U.S. data even better. Proprietary transactions data sets have many more consumers and observations, but payment diaries can produce comparable consumption and income data with three relative advantages: 1) representative of U.S. consumers; 2) publicly available; and 3) flexible data measurement opportunities. Representativeness allows the Diary data to accurately predict aggregate government data and forecast real-time macroeconomic developments. The Diary data exhibit comparable micro consumption and income dynamics to those in large-scale, proprietary transactions data. We leverage the DCPC’s representativeness to quantify selection effects for consumers who adopt personal financial management (PFM) methods.