May 17, 2012
Ignorance Is Strength: House of Representatives Edition
The War on Data Collection Continues!
From the National Association for Business Economics (NABE):
[t]he U.S. House of Representatives was considering an appropriations bill for Commerce, Justice, Science, and Related Agencies (H.R. 5326) that would drastically reduce funding for the Census Bureau and make participation in the American Community Survey voluntary.
... Regrettably, the legislation ultimately passed the House along party lines and was much more damaging than originally proposed. In its current form, H.R. 5326 will "devastate" the nation's economic statistics.
Specifically, the legislation will:
- Terminate the American Community Survey;
- Cancel the 2012 Economic Census; and
- Halt development of cost-saving measures for the decennial census.
Readers of this blog recognize that almost all the posts rely upon government data in the aalysis. How do these data sets under threat fit in? From NABE:
How are Economic Census data used?
- By the federal government as an input to calculate elements of key economic indicators, such as economic growth (GDP), prices, and productivity;
- By retailers in evaluating whether to expand into new market geographies;
- By economic development commissions in attracting new businesses to their areas; and
- By companies to benchmark performance against industry averages
How are ACS data used?
- By corporations to examine workforce characteristics of neighborhoods to determine optimal locations for new factories or sales centers;
- By homebuilders looking to tailor new subdivisions to surrounding neighborhoods based on income, family size and existing home values; and
- By municipal governments in planning to meet the educational, safety and housing needs of their citizens.
NABE suggests contacting your senator or representative.
Posted by Menzie Chinn at May 17, 2012 07:30 PMdigg this | reddit
Taking a cue from House Republicans, I disconnected the gas gauge and oil light on my car since they waste valuable energy.
Posted by: eightnine2718281828mu5 at May 17, 2012 07:45 PM
In an era of increasing deficits, all programs should be up for review. Perhaps a solid case has not been made for the benefits versus the costs of the data. Perhaps such a case should be made.
For example, in discussing the ACS, the BLS website states:
How can the ACS rolling reference period affect the estimates?
ACS responses can relate to any weekly period throughout the year and reflect different economic events. Respondents can choose to delay completion of the ACS form.
ACS data are collected over a range of time periods. In the ACS, the reference is to activity in the “last week” whenever the respondent fills out the survey. In the CPS, the reference period is fixed for the calendar week including the 12th of the month. A varying reference week and time of data collection could be particularly problematic for shorter, transitory statuses or activities that could be influenced by seasonal variation. Unemployment, for example, is a state that is subject to both seasonal and cyclical variability.
What is the mode-of-collection effect?
The mode of collecting data also may affect the labor force estimates. All CPS interviews are conducted through personal visits or telephone calls by Census field representatives using laptop computers for data entry. ACS data are collected primarily by mail using “paper and pencil” questionnaires, with telephone and personal visit collection used as follow-up to mail nonresponse. Data collected using paper forms do not have interviewers assisting respondents in interpreting questions.
What population controls are used in the two surveys?
Both the ACS and CPS are sample surveys used to make estimates for a larger population. Each person in the survey represents a larger number of similar individuals in the population. To do this, each survey utilizes population estimates produced by the Population Estimates Program at the Census Bureau. Each year, the Population Estimates Program publishes population estimates by demographic characteristics (age, sex, race, and Hispanic or Latino ethnicity) for the nation, States and counties. The reference date for estimates is July 1st.
Does the LAUS program plan to utilize the ACS data in its estimating procedures?
LAUS has no immediate plans to utilize ACS data in monthly estimation. We are, however, investigating ways in which the ACS data can be used in place of the data from the decennial census long-form survey that have been utilized in updates to program benchmarks after decennial censuses.
So, you have similar data, but differing collection methods. Perhaps you learn more or can improve the overall insights. But you have to convince those paying the bills that more data means more than more data. It's the way business works, too. More data may sound nice, but it has to pay for itself somehow in better performance.
You can't just call up a representative and say you need more data if you can't really explain why the data you get each month is inadequate, or how it really is vital for the economy. And to say that it is useful for economists only begs the question of what comes of that, especially since economists can rarely agree.
Prepare a business case, not just a few dot points.
Posted by: Bruce Hall at May 17, 2012 08:18 PM
All these free economic data are just a distortion of the free market. We know that the free market is best, in providing goods and providing information, and we don't need to subsidize any information with our tax dollars.
Posted by: Peter T at May 17, 2012 09:36 PM
Ignorance Is Strength: House of Representatives Edition? How about Overreaction with Political Slant: Another Chinn Edition?
This will "devastate the nation's statistics?" That's what you call a less than 2% cut to just one of many federal data collection agencies? I count I count two actual programs in your list of affected areas, from which Menzie follows with "almost almost all the posts rely upon government data." Nice red herring. Why don't you start by counting the number of post of say the last 50 that used data from those two programs?
Posted by: Jeff at May 17, 2012 10:55 PM
You missed the point for the additional needed data. It is not better information, the central planners already know what is best for you and me and everyone else. The problem is we just do not listen but cling to our ways and tendencies. With just a little more information, then, at last, we can be made to see the error of our ways. Really, if it's just a trillion a year, for just a decade or two, utopia can be ours.
I hope you have been around enough to read from the Slug confirmation of how moral our planners are. They are highly trained, highly motivated, highly educated and with all that, highly underpaid. The great work they do comes strictly from their benevolence and you can count on it. These are people of great morals. They truly do not want to be forced into the old methods to make us see the error of our ways. With just a little more information, it may just be possible that their great vision will become ours. And then no reeducation camps, no gulags, no instructive executions will be necessary.
Remember all this is for us, not them. It is still less then four years from the "the moment when the rise of the oceans began to slow and our planet began to heal."
Posted by: Ed Hanson at May 18, 2012 04:18 AM
Is Peter T's comment a joke? I can't even tell anymore.
Honestly, I think the US does not have a bright future. The ability to think about the long term, and about the public good have been completely destroyed, as Bruce Hall's comment clearly reflects. When historians look back at what did the US in, they're going to point to the way people's ability to think outside of business jargon had been completely lost. "Prepare a business case", and "pay for itself in better performance" is complete gibberish in this context, but striking a pose as a clear thinker trumps any desire to actually understand the issues.
Posted by: Walt at May 18, 2012 04:46 AM
ACS isn't just a dataset that industry uses, as you've suggested. Labor economists use it all the time.
Essentially anyone that ever would have used a Census was ecstatic about the ACS, and is going to be hurt if it is cancelled.
Posted by: Daniel Kuehn at May 18, 2012 04:50 AM
'But you have to convince those paying the bills that more data means more than more data. It's the way business works, too. More data may sound nice, but it has to pay for itself somehow in better performance.'
that would imply that decision-makers are actually using the data to make decisions. The Republican House seems determined not to follow that model - in contrast to most medium to large companies that are obsessed with gathering as much data about their customers as possible and then attempting to find useful relationships within the data.
Posted by: Vince at May 18, 2012 05:44 AM
Ed Hanson, I can see that you understand data collection perfectly. ;-)
If such data collection is so valuable why doesn't it pay for itself? Why does it need the government to collect it?
Posted by: Ricardo at May 18, 2012 07:30 AM
@PeterT Thanks for demonstrating your ignorance. You make a perfect example of what a vacuum looks like between two ears. Having accruate, reliable data is instrurmental in operating a large free market economy. Don't be so damn stupid. This is just another in a long list of examples where the GOP does not give a crap. About anything.
Posted by: kthomas at May 18, 2012 07:34 AM
For the ideologues who post here, what exactly is the rationale for halting development of cost savings measures for the census? The census is a Constitutional requirement - Article 1, Section 2. What exactly is the problem with saving money conducting the census?
Posted by: jonathan at May 18, 2012 08:47 AM
"More data may sound nice, but it has to pay for itself somehow in better performance.'"
By that token, no data has to pay for itself also.
Posted by: dilbert dogbert at May 18, 2012 09:28 AM
"Is Peter T's comment a joke? I can't even tell anymore."
Yes, it was humor, just black. It's how I feel when observing the Republicans trying to dismantle even the base, on which rational criticism of their economic views could stand.
Posted by: Peter T at May 18, 2012 10:40 AM
The "customers" of the political decision-makers are the voters. There is plenty of information about voter preferences via Gallup, Rasmussen and others. So politicians do in fact obsess about voter's perceptions and they do obtain plenty of information--very little of it, interestingly, from the government itself.
But how does voter preference translate into policy? Well, good policy is what voters perceive as good policy. This is only vaguely related to what "good policy" might mean to an economist or policy analyst.
There is no direct incentive for the provision of sustainable economic growth. Hence, democracies regularly fail to deliver it. France, Italy, and Greece are examples of countries where policy clearly has not been geared to maximizing sustainable economic growth. In these countries, policy is primarily about the social allocation of existing resources, not the aggregate enhancement of long-run economic performance. (I would add that the distribution of resources is a legitimate activity for a democracy; however, when allocation of benefits begins to take precedence over the growth of the economy overall, then a society is headed for a fall.)
It is for this reason that I have long argued that there is a layer of governance missing, that politicians must be given a single, uniform set of objectives to which their pay is tied. When we have that, we will know what kind of data we need and who can best provide it.
Posted by: Steven Kopits at May 18, 2012 11:38 AM
Is Jeff correct that this is only a 2% cut?
Posted by: JLR at May 18, 2012 11:53 AM
It should be noted that the 10 year census goes far beyond the requirements of the constitution, which only requires a list of who lives where, for example race is not required as a constitutional feature let alone talk about the long form of the census form. Actually in 100 years that is the only part of the census that anyone will care about who lived where on the date.
Posted by: Lyle at May 18, 2012 12:06 PM
Whenever I hear the words "economic statistics," I reach for my Browning.
Posted by: Ellen1910 at May 18, 2012 01:54 PM
The Constitution only requires a census, but it doesn't specify how that census must be accomplished. The folks at the Dept of Commerce have been arguing for decades that they could come up with a more accurate enumeration if they were allowed to use unbiased sampling techniques rather than maintain the pretense of a 100% headcount. The Dept of Commerce claims that they could come up with a more accurate number at less cost. And how do they know they could come up with a better number? Because right now they use sampling to recanvass areas that they know did not get accurate results with the first, second, third, etc. passes of visiting households. In other words, they already use sampling to figure out what the right enumeration is and they keep going back over the same ground in the headcount stage until they eventually get to a number that is close to what the sample says they should expect. Anyone who thinks a 100% headcount is accurate is completely clueless and wouldn't understand or appreciate data anyway. And who is standing in the way of a more accurate census at less cost? By gosh golly, it's the GOP. Imagine that. The same crowd that pretends to be concerned about data gathering costs. Except in the case of a census a more accurate sampling procedure would result in fewer GOP gerrymandered Congressional districts because they know the 100% headcount procedure isn't really 100% and is strongly biased towards the GOP constituency.
We should also be clear. When the GOP talks about defunding data gathering, what they really mean is defunding NOAA data gathering on climate change. That's the real target here. The threat of defunding ACS is largely a smokescreen to fog over the agency that they really intend to hit.
Posted by: 2slugbaits at May 18, 2012 01:59 PM
Ellen1910: A copy of Elizabeth Browning, or a BAR?
Posted by: Menzie Chinn at May 18, 2012 02:11 PM
Of course creating a business case for the additional data is a conspiracy to cut back on NOAA data since business case for government is an oxymoron.
But that's okay, they're not spending our money. No really. It's someone else's money.
Reminds me of the three-year olds who keep repeating, "I want it." Sure, I want everything, too. But unfortunately I have to make some decisions about how best to spend money. I forgot completely that government can just print money, so it is no object.
2slug... never met an expenditure you didn't like? I never said that the additional cost or additional data would not be of use. I just said it would be useful to know just how marginal the value is.
Posted by: Bruce Hall at May 18, 2012 03:11 PM
Bruce Hall I personally cut more govt spending in one week than most private sector businesses make in a year. You argue for doing a business case analysis. Fine. How many BCAs have you actually done? Do you even have any formal training in economics? There is a positive cost to gather data, but once gathered the marginal cost of providing that data is virtually zero, which is what the govt charges for most data. In effect, govt data is a public good. If you want to develop the marginal benefit curve for a public good you vertically sum the individual demand curves. A private company would not give the data freely, which means the effective marginal benefit curve would be the horizontal summation of private curves. This means the private sector would undersupply the socially optimal amount of data.
The govt does discontinue data series that have no value. It's simply not the case that govt bureaucrats are sitting around the office trying to think of clever ways to fool the public into sponsoring useless and unused information. This is just some conservative fantasy along the lines of Reagan's welfare queen driving a Cadillac.
Posted by: 2slugbaits at May 18, 2012 04:08 PM
How much data do you need if the answer to all problems is to lower taxes and reduce regulation?
Posted by: Bum Ticker at May 18, 2012 06:13 PM
2slug: "There is a positive cost to gather data, but once gathered the marginal cost of providing that data is virtually zero, which is what the govt charges for most data. In effect, govt data is a public good."
On that basis, we should all write to our Congressmen and tell them that everything in the world should be measured. Do the math again.
My business experience: 30 years of business planning and budgeting for a Fortune 100 corporation. Data does have a cost; not all data is valuable.
There is no free lunch; what you think is a free lunch simply belongs to someone else and has been taken from them.
Posted by: Bruce Hall at May 18, 2012 07:21 PM
2slug, I've been thinking about your statement and find it a bit disingenuous that you hide behind a moniker and then claim all manner of expertise.
I use my real name and link to my website. You may disagree with my positions, but I at least have the honesty and the balls to be open about who I am and what my background is... as well as an entire blog going back to 2005 for your reading pleasure.
So, be a man [if you are] and quit hiding behind a fake name and fake credentials. Menzie Chinn and James Hamilton provide an excellent forum for serious discussion which I greatly appreciate in this world of "spin doctors" who hide behind curtains and smoke. I'm sure we'd all like to know the man behind the curtain rather than the image in the smokey screen [apologies to the Wizard].
Furthermore, I'd like to invite you to read tomorrow's post: Wisconsin Employment Performance: The Good And Bad
Posted by: Bruce Hall at May 18, 2012 08:19 PM
The Canadian government (Mr. Harper's Conservative, right of centre party) did the same thing with our "long form" census last year. That's the one that only 1/10 (1/100?) people were asked (and had to, by law) to fill. The chief Censor at Statistics Canada resigned over the issue.
Posted by: Marc Patry at May 18, 2012 08:40 PM
I don't know what the Census spent through appropriations in 2011, but their budget request for 2012, which was cut, was $1B. That would make the $92M cut in the referenced House bill more than 2%.
I can't see where the 2% figure comes from. It's difficult to look briefly at these things because the numbers are in a bunch of places and then you have to find all the pieces and then figure out which money applies to which year - e.g., is this an authorization for a year or for more than one year? It's then hard to figure out what was spent in a time period, especially versus what was authorized. Authorizations are often reported as spending in the press but they're more like lines of credit that can be spent and sometimes are highly restricted.
Posted by: jonathan at May 19, 2012 07:38 AM
Let the supporters of this ACS survey be the first to complete it. With all the data the government has, it can't do anything to improve this decayed country. Target, McDonalds, Walmart are joints and should not exist. We need new infrastructure, universal medicine, free university education, high speed trains, public sanitation, wholesome food. Idiots harassing people to gain information that is useless from people who are stupid enough to complete the survey is useless and redundant. In order to do what we need to do here we should look at countries where the quality of life is so superior to ours and use their data. We need action and not more useless people and agencies collecting redundant information and doing nothing to solve the nations problems. America is know as a country of propaganda and useless activity. This survey gets a gawfaw from internationally education people. Spend the pennies in ways that help and not degrade people. Don't teach democracy to other country while exhibiting the fascist practices such as this.
Posted by: Use OECD at May 19, 2012 12:57 PM
"Readers of this blog recognize that almost all the posts rely upon government data in the aalysis"...
Who's fault is that? BTW got a spell checker?
"that would drastically reduce funding for the Census Bureau and make participation in the American Community Survey voluntary"...
Oh dear me! Cut money to a collection of questionably useful bureaucrats who turn out questionable at best data and give citizens a choice of whether they want to participate in the fraud?!?!
Oh the horror of it all!!!
"Halt development of cost-saving measures for the decennial census>/i>"...
LMAO! Anyone who bought into that crap is obviously untethered to reality...
Maybe its time or past time that you dump your information sources that you presently use...
Posted by: juandos at May 20, 2012 03:43 AM
Here is a quote in the New York Times from Republican Representative Daniel Webster as justification for discontinuing the ACS: "That’s just not cost effective, especially since in the end this is not a scientific survey. It’s a random survey."
Now there's some brilliant reasoning for you.
Posted by: Joseph at May 20, 2012 11:00 AM
Joseph One possible reason that Rep. Webster doesn't like ACS data is that it shows his 8th Congressional District in Florida ranks near the bottom in educational achievement. So are we surprised that stupid voters elect stupid Congress Critters?
Posted by: 2slugbaits at May 20, 2012 01:34 PM
I found the budget data in the NYT:
"Last week, 224 Republicans and 23 Democrats voted to cut the bureau’s 2013 budget to $855 million, $88 million below last year’s total and $116 million below the White House’s request."
That is obviously more than 2%. It's a little over 10%. That's the number. As for the ACS, the WSJ says it well, that sometimes the GOP does things that make what they say is the otherwise false image of extremism ring true. The WSJ backs the survey because it's key not for academics but for business.
Posted by: jonathan at May 20, 2012 04:35 PM
I sent the NABE script to the Senate delegation from Texas. Here is the response from the office of Senator Kay Bailey Hutchison, for your consideration:
Thank you for contacting me regarding the American Community Survey (ACS). I welcome your thoughts and comments.
The ACS is a nationwide survey designed by the U.S. Census Bureau to generate detailed information to communities about how they are changing. In the future, it will replace the traditional decennial census long form, which has become less useful as America has become a more mobile society. As a first step, the ACS was used on a limited basis for the 2010 census.
Although the value of information derived from the ACS hasn't been questioned, at least two significant concerns have surfaced. First and foremost is the issue of individual privacy and confidentiality of ACS information. Congress has directed the Census Bureau to take extraordinary measures to protect individuals' information, and has also authorized criminal penalties of up to five years imprisonment and/or up to $250,000 in fines for Census Bureau employees who violate privacy rules.
A second concern is that the Census Bureau does not treat ACS completion as a voluntary matter. Rather than holding out the threat of fines for those who hesitate to fill out the ACS, I believe the Census Bureau should emphasize the importance of the information and build public confidence in its ability to protect confidentiality.
I appreciate hearing from you, and I hope that you will not hesitate to contact me on any issue that is important to you.
Kay Bailey Hutchison
United States Senator
Posted by: JF at May 22, 2012 12:03 PM