A New Methodology for Frame Building and Sample Design for the State Heating Oil and Propane Program (SHOPP) For Joint Statistical Meetings July 29, 2019 | Denver, CO By Edgardo Cureg and Marcela Bradbury

State Heating Oil and Propane Program (SHOPP) EIA conducts SHOPP as part of a cooperative agreement with State Energy Offices to collect and publish weekly residential heating oil and propane price estimates each winter heating season (October through March) Data are collected by telephone and email using Form EIA-877, Winter Heating Fuels Telephone Survey Prices are collected weekly from independent samples of residential heating oil and propane retail outlets A New Methodology for Frame Building and Sample Design for the State Heating Oil and Propane Program (SHOPP) E. Cureg & M. Bradbury – JSM, Denver, CO – July 29, 2019

Current Sampling Methodology Limitations EIA does not currently publish standard errors for weekly SHOPP price estimates but will when new samples introduced in October 2019 Current sample design relies on data from the EIA-863, Petroleum Product Sales Identification, a census survey of petroleum marketing companies last conducted in 2010 but not completed due to budget cuts in 2011 Without this survey, the current methodology does not capture the frequent changes to our survey population Births and deaths are frequent due to low cost barrier to enter these markets combined with challenges for small businesses as a result of difficult market conditions There are also many changes in company ownership, particularly for propane outlets, where many small companies have been sold to the three largest companies A New Methodology for Frame Building and Sample Design for the State Heating Oil and Propane Program (SHOPP) E. Cureg & M. Bradbury – JSM, Denver, CO – July 29, 2019

Constructing New SHOPP Frames Corporate-level data from the previous census survey were used as a basis for the new SHOPP frames, but were outdated and did not provide information on each corporation’s outlets New sources for SHOPP frames were researched, acquired, and cleaned Linkage of the different sources was performed using the RecordLinkage package in R Challenges presented in frame construction included different levels of data (corporate headquarters vs. outlet), inaccuracies in data sources, and linkage of old EIA survey data to new outlet listings which reflect company sales and mergers A New Methodology for Frame Building and Sample Design for the State Heating Oil and Propane Program (SHOPP) E. Cureg & M. Bradbury – JSM, Denver, CO – July 29, 2019

New Sources for Construction of SHOPP Frames Unit identification Advantages Limitations BLS’s Quarterly Census of Employment and Wages (QCEW) Outlet location identified by NAICS code 454310 (Fuel Dealers) Accuracy of NAICS classifications; cleaner data; better representation locations still in business; no cost Data unavailable for 9 of 38 survey states; only one NAICS classification per entity Equifax Data Outlet locations identified by both NAICS code 454310 and SIC codes 5983 and 5984 (Heating Oil and Propane Dealers) Data available for all 38 survey states; very comprehensive; parent company information available Includes many closed locations misclassified as current; NAICS/SIC errors; cost Industry Association Membership Lists Outlet locations and/or corporate headquarters Membership is a strong indication the entity is in scope Not available for all states; not every entity is a member, even for large organizations State Government lists (HEAP, Tax) Some lists indicate type of dealer; no cost Data not available for all states; differences in data field availability and list maintenance A New Methodology for Frame Building and Sample Design for the State Heating Oil and Propane Program (SHOPP) E. Cureg & M. Bradbury – JSM, Denver, CO – July 29, 2019

Design for the New SHOPP Samples Primary strata based on state of an outlet’s location instead of state where fuel is delivered Three substrata formed within a given primary (state) stratum based on available data on sales volumes Outlets associated with largest sales volumes (initial target being 75% of most recent sales) split into certainty substratum and “large” noncertainty substratum Remaining outlets assigned to “medium and small” noncertainty substratum Substrata allows us to select outlets from large companies in the state with a higher probability while controlling the weights on the other outlets Substrata prevents the possibility of selecting mostly outlets from the large companies, which over time may buy many of the other outlets A New Methodology for Frame Building and Sample Design for the State Heating Oil and Propane Program (SHOPP) E. Cureg & M. Bradbury – JSM, Denver, CO – July 29, 2019

Design for the New SHOPP Samples, Continued Each noncertainty substratum is sorted by county and ZIP code, then a systematic random sample is selected to prevent selecting outlets from only a certain part of the state Neyman allocation for primary strata based on number of outlets represented on the frame and estimation of average standard deviation of weekly prices based on the current sample Total sample size increased from 1,562 outlets to approximately 2,700 outlets due to frame limitations and discontinuance of practice of replacing outlets identified as out of business, out of scope, or nonrespondents Sampled outlets will be asked to report recent annual sales volumes, which will be input to volume-weighted price estimates Annual samples of newly identified outlets to augment initial samples A New Methodology for Frame Building and Sample Design for the State Heating Oil and Propane Program (SHOPP) E. Cureg & M. Bradbury – JSM, Denver, CO – July 29, 2019

Acknowledgments Thank you to the following staff for their valuable contributions to the SHOPP sample redesign: Shala Brown Alethea Jennings David Gatton David Kinyon Geoff Grabowsky Terrance Rosales James Hackett Javed Zaidi Tammy Heppner A New Methodology for Frame Building and Sample Design for the State Heating Oil and Propane Program (SHOPP) E. Cureg & M. Bradbury – JSM, Denver, CO – July 29, 2019