Data Collection in a Decentralized Statistical System – The U.S. Perspective

Friends of the Chair Group on Integrated Economic Statistics, Work Group Meeting

June 6-8, 2007

J. Steven LandefeldDirector

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Background to U.S. Decentralized System

Statistical system and laws grew over time to meet specific policy needs

Increasing regulation and monitoring of industries and institutions

Deregulation has dismantled parts of the system but much of it is still in place

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Imprint of Regulation and Monitoring on the U.S. Statistical

System

Agriculture NASS, ERS

Financial FRB, Treasury, SEC, FDIC

Health Care NCHS, CMS

Energy EIA

Transpiration BTS

Labor BLS

Commerce Census, BEA

Environment EPA

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Characteristics of U.S. Decentralized System

Almost all agencies have separate enabling legislation and data collection authorities No comprehensive statistical “law”

Reflecting public concerns, there are strong confidentiality protections Civil and criminal penalties for disclosure Sharing of data among agencies

prohibited, with exception of limited data sharing relationship between BEA/BLS/Census

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Characteristics of U.S. Decentralized System: Privacy Strong U.S. resistance to provision of “too

much” information to the Government. Such concerns major determinant of the

structure of the U.S. Statistical system Decentralized – no single agency able to access

and share data Strong confidentiality – limited access to tax

and administrative records for statistical purposes

Collection system mainly based on Censuses with extrapolation using sample surveys designed to minimize respondent burden

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Chief Statistician of OMB

Key role is coordination of decentralized independent system

Charged with managing the trade-off between respondent burden and statistical needs

No direct budget or management control of individual agencies, but Can exert significant effect through cross-

cutting OMB review of budgets Statistical agencies independent but report

to both OMB and parent departments Parent departments have direct budget and

management control

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U.S. Business Accounts

Statistical and Regulatory Reporting based on Generally Accepted Accounting Principles (GAAP) Significant flexibility in GAAP Significant differences between GAAP, IRS, and Economic

Valuations Significant adjustments required to provide consistent accounting

Key Issues “Gaps in GAAP”

Rules-based, but significant flexibility Stocks options, intangibles, pensions and “off-the-book”

liabilities Harmonization with IFRS

Principles based; also significant flexibility

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Sample Frame/Business Lists

Census Federal-tax based and Census identification and collection

BLS State-tax based and BLS identification and collection

BEA BEA identification and collection, tax based supplement

IRS/SOI Federal-tax based

EIA, ERS, NASS, FRB, Treasury

Agency identification and collection

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Comprehensive Data Available for Benchmarks

Censuses – virtually complete and most detailed data available – used for benchmarking

Quinquennial Economic Census Quarterly Census of Wages and

Earnings (State & local data) Benchmark FRB/BEA International

Capital and Investment Surveys

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Good Annual Coverage From Survey Data

Annual Surveys: most comprehensive survey coverage (lower filing thresholds) and most detailed survey data: Annual Census Surveys: Manufacturing, Trade, and Services Annual BEA Surveys of Multinational Company Operations Annual IRS Business Tax Filings (Federal tax data) Annual BEA/FRB/Treasury International Capital and

Investment Surveys Other annual survey data: EIA, ERS, NASS

Challenges: Services expansion, updating, consistency, data sharing, and level of detail

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Rich Set of Quarterly and Monthly Current Business Indicators

Quarterly and Monthly Surveys: higher frequency but less complete – higher filing thresholds and limited detail Quarterly and monthly Census trade, manufacturing,

services and financial surveys Quarterly BEA international services surveys Monthly BLS payroll survey Monthly CPI, PPI, and IP prices Other public and private data

Challenges: Services expansion, updating, consistency, and level of detail

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Strengths of Decentralized System

Resulting system good at providing timely measures on issues of interest to public and private decision makers: Good at innovation in concepts and

methods Good at updating the estimates to reflect

changes in the economy Good at addressing current policy and

business concerns Good at balancing timeliness, accuracy,

and relevance

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Challenges to Decentralized Systems

Challenges associated with decentralized system: Developing consistent and well integrated

estimates Developing new measures on issues/areas with

no constituency and Federal agency management

Balancing respondent burden with need for detail

Lack of a well-established conceptual foundation and organizational framework (true of all national accounts)

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Bottom Line

U.S. Decentralized System largely reflects U.S. public’s demand for: Timely data that answers the “big

picture” questions, Gets the answer “about right,” and Doesn’t impose too heavy a

respondent burden.