Federal Reserve Board Committee Reports on Consumer Expectations and Savings Statistics

Abstract

IN the fall of I954 the Board of Governors of the Federal Reserve System at the request of the Subcommittee on Economic of the Joint Committee on the Economic Report appointed consultant committees to study certain aspects of economic statistics. The committee reports were submitted during the summer of I955 and were published shortly thereafter both by the Federal Reserve Board and the U. S. Government Printing Office Two of the reports contain extensive discussions of survey statistics which call for some comment.' I am sure that the substantial work carried out by the eminent committees appointed by the Federal Reserve Board will prove useful. Only the future can tell what specific effects the reports and the publicity given to them will have. I may mention a few probable beneficial effects of the reports on consumer statistics. The first aspect relates to consumer economics. Regarding the past neglect of consumers by economists, it may suffice to recall that not so long ago of the three sectors of the economy only two, business and government, were assumed to be autonomous in generating income and shaping economic trends. During the last ten years, however, the importance and autonomy of consumers have been much more widely recognized. The impact of rising incomes and the influence of purchases of consumer durables on business-cycle trends, the work of Arthur Burns and the National Bureau, the Surveys of Finances conducted cooperatively by the Federal Reserve Board and the Survey Research Center, as well as the progress of market research brought about this recognition. The Smithies report will add to it. Secondly, regarding the use of sample interview surveys for economic research, the unequivocal statement about the indispensability (page i) of survey statistics, and the cogent arguments marshalled in explanation of the statement, will no doubt accelerate the current trend. Turning to a third aspect, the intermarriage of socio-psychological studies with more narrowly conceived economic studies, we find that the reports do not consider explicitly the basic problems of cross-disciplinary or behavioral research. Nevertheless, the emphasis placed on the study of attitudes, expectations, and intentions in the one, and on savings habits and purposes in the other report will, I believe, facilitate the task of students of businessmen's and consumers' behavior. Finally, I expect positive results from the committees' insistence on more methodological research. As a mere guess, I may say that in my opinion government agencies and foundations, even if they hesitate to adopt some of the more extensive and expensive recommendations, will be responsive to methodological projects suggested by the committees. In commenting on the reports I shall be concerned exclusively with scientific conclusions. Regarding the extensive observations about operational techniques and organizational matters, I might say simply that I agree with most conclusions. I feel especially indebted to the members of the committees for recommending that more complete data be collected, more frequent periodic surveys conducted, the analysis of results extended, and further checks on the accuracy of results sought. I shall here consider fundamental problems of theory and research design, regarding which there exist some differences of opinion, rather * This paper was delivered at a joint meeting of the American Economic Association and the American Statistical Association in New York, 29 December, I955. The author is Program Director of the Survey Research Center, University of Michigan, which conducts the Surveys of Finances for the Federal Reserve Board. 1 The two reports to be discussed here are entitled Consumer Survey (Chairman, Arthur Smithies) and Statistics on Saving (Chairman, Raymond Goldsmith). The reports will be referred to by the names of the committee chairmen. The page references in this paper refer to the Federal Reserve Board publications.