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Economic News Release
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Attachment G: Background on Scanner Data in the CPI


Advantages of scanner data

  • There are many more observations, which lead to more accurate estimates.
  • Superlative and other more advanced index formulas can be calculated in addition to Laspeyres-type indexes, because the scanner data include current period quantities purchased.
  • Scanner data may have other uses in the CPI; e.g., more accurate selection of items for pricing, hedonic regression for quality adjustment.
  • Household survey scanner data potentially could replace or supplement portions of BLS's Consumer Expenditure Survey (used to weight CPI categories) or Point of Purchase Survey (used to select outlets for sampling).

Limitations of scanner data

Coverage

  • Neither company provides any data for Alaska or Hawaii. This means we would have to maintain our current collection effort for every item stratum to continue the Honolulu and Anchorage index areas.
  • The preponderance of item data are for food at home, with limited coverage of other goods. There are virtually no data on services, which constitute more than half of the CPI expenditure weight.
  • Scanner data are not yet available for many important food at home items where the product is individually packaged or weighed at the check-out. These include meat, produce, bulk items, cheese, deli, and bakery items.
  • Some food at home items have significant sales in outlets that do not scan purchases or do not supply data to scanner companies. Convenience stores are one example of this coverage problem.

Expense

  • Scanner companies buy the data from the retail outlets. They must work with a variety of retail systems. The data lose value rapidly as they age. Consequently, the companies must ask a high price for scanner data. Buying the full set of edited scanner data (this includes some non-food items) would cost more than we now spend to collect data for food at home. The price is especially high for data sufficiently current to be of use in the CPI.

Timeliness

  • The scanner companies assemble data by the Sunday-through-Saturday week. They take the next week to process it and make it available to their clients the first of the following week. We would have to have all data by about one week prior to release for use in the CPI. Assuming a release of about the 15th of the month, in most months it is likely that the last day of coverage of scanner data would be a little earlier than the 18th business day we now use.

Companies that supply scanner data

  • BLS has dealt with two well-established companies that collect and process scanner data on a national level, and has done research using data obtained from those companies.