The Philadelphia Fed’s Consumer Finance Institute (CFI) just launched the Labor, Income, Finances, and Expectations (LIFE) Survey to improve our ability to examine how consumers earn, spend, save, and invest in today’s economy. The survey was designed to augment CFI’s growing data and research on consumer trends and behaviors in the United States. Recently, CFI’s surveys have tackled timely topics such as consumers’ financial health during the COVID-19 pandemic, increasing usage of buy now, pay later payment products, and how student loan repayment resumption is affecting borrowers’ budgets and behaviors.
CFI's Tom Akana sees the surveys
as helping us to understand more
about the decisions people make
as consumers.
Tom Akana, CFI senior advisor and research fellow, shared his thoughts about the new survey, what we hope to learn from it, and how collecting these data may help researchers better understand evolving consumer trends.
Q: How did the LIFE Survey come about, and what is its goal?
TA:A key part of the CFI’s mission is to research “how people earn, spend, save, and invest.” A valuable method for building this understanding is through our consumer surveys, learning what consumers say they are experiencing firsthand.
CFI gathered survey data in the past to examine, for example, the evolution of prepaid cards and the adoption of contactless cards. At the beginning of the COVID-19 pandemic, we successfully fielded a consumer survey in a matter of weeks so that we could understand in real time what was happening to consumers and their finances. We continued this survey for a number of years, producing several dozen reports. From this experience, we knew that we could develop and field a relatively high-frequency, nimble survey that would serve CFI’s needs today and into the future.
Akana says the survey gives us an opportunity to hear directly
from consumers about how the economy is impacting them.
So, the goal of the LIFE Survey is to provide timely, experiential data about consumers’ financial lives in four areas: labor, income, finances, and expectations. In the run-up to officially launching the survey, those data already generated valuable insights for two publications: the four-part Student Loan Payments Resumptionseries and the Buy Now, Pay Laterspecial report. Both reports rely on data gathered as part of the LIFE Survey series.
Q:What can we learn from the survey data and who would be interested in using these data (and why)?
TA:We plan to use our data to inform research in two broad areas: The first is to monitor the current conditions of consumers, including the financial distress they may be experiencing such as job loss or eviction, coping strategies like skipping debt payments, and concerns about how they will make ends meet in the coming months. The second is to gather data that inform the medium- and longer-term objectives of CFI researchers and researchers throughout the Federal Reserve System. For example, what are the drivers or impediments to consumer adoption of new forms of payments, or where are consumers seeking financial advice and how are they using advice from different sources?
Collecting data quarterly gives us an opportunity to ask consumers
about changes in the economy and how they are responding.
The survey collects demographic information and information about the types of financial products our respondents have and use, which will let us show the results in a variety of contexts over time. Our reports will be relevant to anyone in media, industry, or academia who is looking for insights and trends in how consumers are faring in different time periods and how their behaviors are changing.
Q:Who is being surveyed, and how often will the surveys be fielded and new data added to the web page?
TA:Our surveys are conducted quarterly, based on data collected in January, April, July, and October. We collect 5,000 responses every quarter from a nationally representative cross-section of U.S. adults. All our results are weighted consistently each quarter, according to census averages for five separate demographic categories, so we can accurately compare our output across each quarter. We expect summary reports of the results to be released four times a year as well. Any additional papers based on the data will be released as they are completed.
Q: What makes the data important?
Akana says consumer input can help us better understand large
trend lines.
TA:This survey series will give us long-term insights into how consumers’ financial lives are changing by providing frequent, robust information. The flexibility that we’ve built into the survey collection process will also let us investigate topics that are not otherwise covered by the regularly scheduled questions we field. These data will provide readily available and detailed insights into consumer finance from a trusted research organization.
Q: What are the next steps for the data, and how will the series grow?
TA:For the past 15 months, we’ve been building, testing, and fine-tuning the survey questionnaire. Now that we have established the content and cadence of our data collection, we expect to spend the next nine to 12 months focusing on developing and publishing our early results. Our first LIFE Survey reportwas released in March. As we publish new reports, they will be available on theLIFE Survey web page. We are now running one of our first modules of special questions to collect data on specific topics of interest that will inform subsequent special reports and studies. In the future, we plan to publish a steady flow of quarterly reports, special topic papers, and research briefs.
- The views expressed here are solely those of the author and the interviewed researcher and do not necessarily reflect the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System.
