Household Income, Demand, and Saving: Deriving Macro Data with Micro Data Concepts

Abstract

We develop adjustments to align the NIPA measures of key household flows with cash flow concepts that better reflect household budgets and demand. The adjustments significantly change important macroeconomic time series and give different perspective on household spending and saving. Furthermore, household income aggregated from micro data sets like the CPS, SCF, and PSID differs significantly from NIPA personal income. But the micro survey data likely reflect cash flow concepts rather than NIPA imputations. Indeed the adjusted cash flow measure of income eliminates most of the shortfall of CPS, SCF, and PSID of CPS income relative to NIPA household income.