Board of Governors of the Federal Reserve System

The Federal Reserve Board in May will begin a statistical study of household finances, the Survey of Consumer Finances, that will provide policymakers with important insight into the economic condition of all types of American families.

The survey has been undertaken every three years since 1983. It is being conducted for the Board by the National Opinion Research Center (NORC), a social science research organization at the University of Chicago, through December of this year.

The data collected will provide a representative picture of what Americans own--from houses and cars to stocks and bonds--how and how much they borrow and how they bank. Past study results have been important in policy discussions regarding pension and social security reform, tax policy, deposit insurance reform, consumer debt and a broad range of other issues.

"The results of the survey will fill a gap in our knowledge about the financial circumstances of different types of households," Ben S. Bernanke, Chairman of the Board of Governors of the Federal Reserve System, said in a letter to prospective survey participants. "Our previous surveys ... have helped the Federal Reserve and other parts of the government make policy decisions and have also supported a wide variety of basic research," the Chairman noted.

The 2007 survey will contain a revised set of questions on home mortgages with variable interest rates and other variable terms. The questions will address how much interest rates or other features of such loans can change. Taken together with other survey variables, they will allow a better understanding of the types of households that have such loans. Another set of new questions will address the connection between self-employment and business ownership.

Participants in the study are chosen at random from seventy-nine areas, including metropolitan areas and rural counties across the United States, using a scientific sampling procedure. A representative of NORC contacts each potential participant personally to explain the study and request time for an interview.

"I assure you that we give the highest priority to guarding the privacy of the survey participants and the confidentiality of their answers," Chairman Bernanke said. NORC uses names and addresses only for the administration of the survey, and that identifying information will be destroyed at the close of the 2007 study. NORC is required never to give the names and addresses of participants to anyone at the Federal Reserve or anywhere else.

Summary results for the 2007 study will be published in early 2009 after all data from the survey have been assessed and analyzed.

The attached letter from Chairman Bernanke was mailed to approximately 10,000 households urging their participation in the study.