The Federal Reserve Board's Survey Of Consumer Finances

The Federal Reserve Board’s Survey of Consumer Finances (SCF) is a triennial cross-sectional survey of U.S. families. The study, sponsored by the Federal Reserve Board in collaboration with the Department of the Treasury, includes information on family incomes, net worth, balance sheet components, credit use, pensions, income, and demographic characteristics (Bricker, et al., 2014). Families from all economic levels are selected to participate in the survey. In addition, information from related surveys of pension providers and the earlier surveys conducted by the Federal Reserve Board is included. Data from the Survey of Consumer Finances is employed by the Federal Reserve and other branches of the government to conduct analysis. In addition,

Evidence from the Survey of Consumer Finances”, Frank (2011) suggests that many people may not know their credit card interest rate and that consumers may systematically underestimate the rate they are paying by as much as thirty to thirty three percent. The researcher examined credit card penalty pricing using data from the Federal Reserve’s triennial Survey of Consumer Finances. The penalty rate is an increased rate to the existing credit card interest rate caused by initiating a specific event, such as a late payment being made to the credit card issuer. The study also examines data from the SCF which asks consumers to self-report their credit card balances. In addition, the study employs data from the SCF to analyze systematic biases in consumer estimates of their credit card interest rates. Evidence from the SCF indicates that consumers underestimate credit card balances reported as compared to data collected directly from financial institutions (Frank, 2011). The study hypothesizes that credit card loan interest rates reported contain systematic recall errors when consumers state their loan price without checking

Under these conditions, the survey has limitations. The survey intends to represent the majority of people in the U.S., but the survey is limited in representation based on who actually responds. In addition, limitations concerning the accuracy of the data will exist contingent on the ability of the respondents to answer questions correctly. Consequently, researchers rely directly on the information reported by the respondents and verifying the accuracy of the information provided by each respondent is not feasible. However, the process is cost effective as surveying everyone in the country is unrealistic. Moreover, the data is used to make generalizations about the population; eliminating the need to survey an entire population. While the SCF dataset is comprehensive, the dataset may not contain every variable needed to answer a specific research question being pursued. Therefore, the variables need to be available within the dataset in order to answer the research question. Information gathered from the SCF dataset will allow researchers to address items that need attention today in addition to preparing researchers to anticipate needs for the