Understanding Business Dynamics An Integrated Data System for America's Future (2007) / Chapter Skim
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3 The Ideal Business Data System
3 The Ideal Business Data System
Pages 47-64
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From page 47... ...
Finally, an ideal data system would be constructed to facilitate the development of modules that allow linkages between business registers, existing surveys, and administrative data. As we describe below, allowing for linkages across sources can help minimize respondent burden as well, and increase the usefulness of final data products.
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From page 48... ...
Ideally, statistical agencies should facilitate front-end collaboration with the academic and business communities and not rely solely on postsurvey follow-up. Considering user needs up front should increase the relevance of final data products.
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From page 49... ...
Recent events -- such as the aftermath of September 11, or natural disasters such as Hurricane Katrina -- have highlighted the need for information on business activity at regional, state, county, and very local levels. Ideally, one could measure not only the impact on economic activity of the initial destruction, but also follow business dynamics during recovery periods in a way that allows the impact of relief efforts to be assessed.
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From page 50... ...
. The authors suggest that redundant external data requests, especially for larger firms, appear to make the prospect of data sharing by designated statistical agencies preferable.
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From page 51... ...
In some European countries, especially in Scandinavia, essentially all interactions of individuals or businesses with the government generate administrative data that are maintained and available for analysis. One reason the United States has two different business registers is that the use of IRS data is extremely limited for confidentiality reasons.
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From page 52... ...
The business register would record the specific surveys for which each firm was selected to participate, both over time and across agencies. With each survey in which the firm participated, the cumulative burden budget would be reduced by a measure of its participation.
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From page 53... ...
The business register should also indicate the enterprise structure of a firm, such that subsidiaries and multiple work sites are apparent, and mergers, acquisitions, and other status changes are reflected in a timely fashion. To maximize the value of a business register as a sampling frame, these data items must be included and should be available to all approved users of a register (including those positioned beyond the Census Bureau and BLS)
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From page 54... ...
Rather, an ideal business list would integrate multiple sources so that a common registry is used for key business surveys underlying the National Income and Product Accounts (and related federal business statistics)
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3.2.3 Effective Data Sharing By this point, it is clear that creation of the ideal business register implies a greater degree of data sharing among statistical agencies than is 4The statistical agencies (in the United States and abroad) have done quite a bit of work on the issue of determining ownership structures of businesses -- see Armington (2004)
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From page 56... ...
The central database, along with data sharing, would play a large part in reducing the administrative burden on UK companies. In addition to data sharing among agencies, the basic elements of the employer section of the business register should also be made accessible to all qualified agency and research users to serve as a sampling frame for their surveys.6 Researcher access to some confidential data is already allowed in 5"Data sharing" is the exchange of information collected from businesses and individuals or reported to the IRS in identifiable form for statistical purposes.
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From page 57... ...
.7 More broadly, ONS allows access to a broad range of unpublished microdata to researchers upon application.8 3.3 IDEAL DATA COLLECTION CHARACTERISTICS 3.3.1 Contents of the Ideal Business Data System Not only must the ideal business data system be capable of producing accurate and timely aggregate statistics on income and output, employ 7See http://www.statistics.gov.uk/about/bdl/ for more details about the program. 8Much of this has resulted from the Deregulation and Contracting Out Act of 1994, which has been applied to the Statistics of Trade Act of 1947 and others.
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From page 58... ...
A system capable of such analyses must thus collect a range of key data items beyond the basic information contained in the business register, although the register is certainly one important input. Measurement of transitions (e.g., mergers, acquisitions, and spin-offs)
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requires data not only on these important inputs, but also on outputs, performance, and the market environment. Thus, the ideal business data system would go beyond the detailed industry and product codes on the business register and include such things as productivity measures, profit levels, prices, and even patent information.
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From page 60... ...
The business lists currently used in the federal government require longer and perhaps more elaborate business activities for inclusion in the target population than would be implied above. Hence, reliance on the current sampling frames may miss much of the economic activity of key interest in business dynamics.
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With a focus on business dynamics, however, when the interest is in relative changes in business activity, then alternative allocations of the sample become more attractive. Allocation of the sample proportionate to some function of change in business activity is reasonable.
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This is best illustrated by considering e-commerce, a sector in which intensely dynamic business activity takes place. A new focus on business dynamics would require much more attention to such sectors that pose new survey measurement problems.
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Such purposes require that more attention be paid to following time-based linking rules than is true for most current business surveys. Several problems arise and need further study: How are mergers and acquisitions to be handled in the study of business dynamics?
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From page 64... ...
. To reduce the reporting burden of high-frequency measurement, new alliances between the federal statistical agencies and payroll processing firms might be considered; use of scanner data for sales volume estimates might also be studied.
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