Dear all,
to see how different inflation measures change the picture compared to headline inflation, I need nominal wage data.
I came across the CPS (Current Population Survey) and the CES (Consumer Expenditure Survey), but the estimates for different income percentiles are quite different. For instance, if we look at the median real income (deflated with headline inflation), the growth rate between 2019 and 2023 is positive for the CES but negative for CPS data (See Image attached).
How is that possible? I know the methodology is slightly different, but what drives that difference?
Thank you for your help!
It’s difficult for me to say if the differences that you’re finding are due to differing survey methodologies or if you’re comparing different sources or levels of income. Since IPUMS does not provide data from the CES, my knowledge of this survey is limited. This page that compares the two data sources notes that “deviations between the two products are directly attributed to coverage, definitional, and measurement differences. Beyond that, time period differences between the two surveys may also account for some of the difference.” You may also find this introduction to CES tables helpful.
One significant difference in methodologies is that the CES tables report estimates using characteristics based on either the consumer unit or the reference person. The CPS meanwhile reports income for each person (INCTOT), family (FTOTVAL), and household (HHINCOME). Please also note that the CPS reports multiple different sources of income besides wages and salaries. Each of these sources is provided in a separate variable (see the full list of income variables).
Additionally, to protect respondent confidentiality, the Census Bureau engages in rank proximity swapping and applies a maximum value (top code) to each income variable. While this will likely not change the median value for income, this is something to still keep in mind when comparing your results.
