Japan to throw away kitchen scales in overhaul of consumption data

[TOKYO] Japan's sickly economic numbers are set for a boost, with bureaucrats planning to modernise the way they measure household spending and scrap an antiquated survey that relies on elderly shoppers to weigh their groceries with kitchen scales.

Household spending accounts for 57 per cent of the world's third-largest economy and has been in a funk for two years - or so it seems, according to monthly surveys which ask people to answer over 20 questions by hand and weigh groceries on state-provided scales before officials come to collect the forms.

Completing the survey is a time-consuming task that lends itself to retirees, who are among the most frugal consumers and are now so over-represented in spending data as to understate the overall outcome, economists say.

Respondents must log everything from the type of alcohol they buy to whether they pay by cash, credit card or voucher, and they must write exactly what they eat at restaurants.

In addition to underweighting younger, higher-spending households which are more likely to shop online, the Family Income and Expenditure Survey is criticised for polling too few people: 9,000 respondents for a population of 127 million.

Its bias toward the elderly raises other problems. "When I went out drinking, there were times my memory became vague and I couldn't log the details accurately," said a man who has recent experience answering the survey. "It's impossible to log everything."

The government plans to bring the survey into the 21st century by adopting a big-data approach, harvesting transactions from credit card firms, travel agencies and retailers, including real-time point-of-sale data direct from cash registers, said two government officials involved in the plan.

The government is considering collecting data from retail giant Aeon, but has yet to decide on exact data and could meet resistance from private firms, one of the officials said.

An Aeon spokesman said the government was likely to face technical problems in accessing corporate data bases.

"At Aeon we currently have no database that is open to the government or the public," the spokesman said.

Japan would be the first to use big data in an official measure of consumption, experts say. However, government officials said it would not be ready to launch before 2019.

In the meantime, weak survey data is hurting gross domestic product, which has shrunk for four of the past eight quarters. That in turn threatens Prime Minister Shinzo Abe's efforts to reflate the economy.

The Finance Ministry has been pushing for the survey to be overhauled, after Finance Minister Taro Aso said last year that it gave results that were at odds with retail sales. He called on bureaucrats to improve the quality of these statistics.

Since the government raised the national sales tax in April 2014, consumption has slumped more markedly than retail sales. In the 21 months to January, the household survey data was down for 17 months while retail sales fell 10 times.

Some central bankers have also complained about the survey. Several members of the Bank of Japan's policy board told the September 2014 meeting there might be a "downward bias" to household spending data, according to minutes of the meeting.

"Responses from the elderly and others who stay at home have risen and there is distortion in the consumer statistic's sample distribution," Motoshige Itoh, a professor at the University of Tokyo, told Abe's top economic-policy council in November.

REUTERS