The Reliability of Consumer Surveys of Financial Holdings: Demand Deposits

Publisher Website
Google Scholar
Abstract
This paper presents the results of two studies investigating the prevalence of response and non-response errors in consumer reports of demand deposits. The source of the data is two consumer panels in which sample members were selected from the files of cooperating financial institutions and continuous checks could be made, unknown to the respondents, of the reported balance of certain financial holdings. Only one of these studies was designed specifically to validate demand deposits, and this only for part of the sample, with the sample size being reduced further because of administrative difficulties. Nevertheless, the findings would seem to be of considerable interest, particularly because this appears to have been the first time that an attempt was made to measure nonsampling errors in individual consumer reports of this asset; the few previous comparisons have been in terms of aggregates. Validation of demand deposits presents two difficulties not encountered with other assets. First, because of their equivalence to cash and because they are held primarily for transactions and liquidity purposes, demand deposits tend to be highly volatile. For many, if not most, consumers, the fluctuation in the daily balance over the period of, say, a month may exceed the average balance in the account. Second, at any particular moment the institutional balance in a given account may or may not coincide with the balance in that account according to the consumer's records even if the latter are fully accurate. The higher is the velocity in the account, the less likely are the two balances to coincide. This is the well-known “float problem,” brought about by the interval that elapses between the time a check is written and the time it is presented for redemption at the issuing institution. Both of these difficulties are considered in interpreting the findings of this study, and an attempt is made to estimate the relative importance of check-float, though the surveys could not be designed for this purpose. The two surveys serving as a source for these data are discussed briefly in the following section. Succeeding sections then present results on the effect of these errors on estimates of population parameters, and of the extent to which the results might have been influenced by check-float. Some implications of the results are drawn in a concluding section. The two studies reported for the first time in this article were carried out as part of the Consumer Savings Project of the Inter-University Committee for Research on Consumer Behavior. The purpose of this Project has been to ascertain the reliability with which savings data are obtained on consumer surveys and to develop improved procedures for estimating consumer savings by survey methods.

This publication has 0 references indexed in Scilit: