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 actual demand generated by households. The adjustments significantly change the behavior across time of 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 much of the shortfall of CPS, SCF, and PSID income relative to NIPA household income.

Keywords: Aggregate Demand, Consumption, Saving, Household, National Income and Product Accounts

JEL Classification: E01, E21