Personal Consumption Expenditures by State Christian Awuku-Budu, Ledia Guci, Christopher Lucas and Carol Robbins BEA Advisory Committee Meeting May 10, 2013 Comments by Therese J McGuire Northwestern University

Useful venture for a number of reasons Assess state tax reform proposals Assess state tax performance Measure the wealth effect on consumption Undertake regional market analysis Improve regional input-output tables

Painstaking work Create annual, state-level expenditures for 77 categories of PCE over period Benchmark against various external sources Correct for residency of purchaser (cross-state purchases) Provide and interpret initial results on differences across the states in 15 aggregated expenditure categories, including 7 service categories

Questions that came to mind Are the outlier states truly outliers that need to be adjusted or do they present interesting variation? Do the big states – California, New York, Illinois, Texas, Florida – look pretty similar to one another? If so, is the importance of this work diminished? If not, what are the differences and what do they mean? Is it possible to do a further breakdown of the data by household income categories?

Smaller questions What exactly do you mean by “control to the NIPA category total”? Housing and Utilities and Health Care Services are big, important and difficult categories. How do you feel about where you are with these categories? Financial services and insurance – is there any hope? How is “free” public education treated?

Suggested changes for next iteration – part 1 Use examples of large, relatively typical states rather than small, relatively quirky states, even if the differences are not quite as stark Emphasize how these data will allow an improvement/enhancement of state-level policy analysis, measurement of economic well-being, etc. – how do these data improve upon the data that researchers rely upon for these purposes today?

Suggested changes for next iteration – part 2 Explain why “consistency with the framework of NIPA” is important Spend more time talking about the results for the categories of expenditures with the greatest variance across states (health care?) The section on Cross-sectional Evaluation (essentially a benchmarking of the new estimates against well-known existing state-level data) is heavy going