1. 1 Framework for Prioritizing Economic Statistics Programs This report is released to inform interested parties of research and to encourage discussion. Any views expressed on statistical, methodological, technical, or operational issues are those of the authors and not necessarily those of the U.S. Census Bureau. Presented by Thomas L. Mesenbourg Associate Director for Economic Programs Thomas.L.Mesenbourg.Jr.@census.gov June 2007

2. 2 Presentation Outline Budget Environment Framework Purposes Economic Program Criteria Uses of Criteria Program Improvements Model Initial Findings Conclusions

3. 3 Budget Environment Tight resources for remainder of decade Budget cuts will lead to program eliminations Even if resources are constrained program, improvements must be made Most program improvements will have to be funded internally

4. 4 Framework Purpose Help prioritize programs Provide information for responding to budget cuts Facilitate reallocation decisions –identify costs savings –identify relative efficiencies/inefficiencies Ensure program decisions are more data-driven

5. 5 Economic Program Criteria Pre - 2006 Retain programs providing source data to BEA and FRB Preserve programs and content that serve as benchmarks for GDP and other measures of economic activity Preserve data quality of existing programs

6. 6 2007 Program Priorities 2010 Decennial Census Economic Census and Census of Governments Principal Economic Indicators and related annual surveys Surveys that provide source data for NIPA Remaining surveys not directly used by BEA

7. 7 Initial Use of New Criteria in FY 2007 Needed to identify $10 million in program cuts Priority 2 – Economic Census and Census of Governments –Survey of Business Owners – suggested eliminating coverage of businesses with no paid employees Priority 3 – Principal Economic Indicators and related annual surveys –Quarterly Financial Report program – suggested eliminating coverage of small manufacturers Priority 4 – Economic surveys providing NIPA source data Suggested eliminating: –Information and Communication Technology Survey –Current Industrial Reports –Survey of Residential Alterations and Repairs Priority 5 – All other –County Business Patterns – suggested one year suspension

8. 8 Program Improvement Framework Model Development Framework was developed over a year ago Ranks programs using various attributes such as relevance, cost effectiveness, users and uses, and quality Methodology is still in its infancy and needs additional refinements Nine annual programs and eight economic indicators included in the model Programs account for some $82 million or about 60% of our current programs budget

9. 9 Metrics Used Survey value – Our two most important stakeholders, BEA and the Federal Reserve Board were asked to rank the surveys in terms of importance Data quality – The survey’s unit response and coefficient of variation or CV for its principal variable were used for data quality Cost efficiency – Two measures for cost efficiency were used, cost per annualized number of survey units and cost per annualized number of collected variables

10. 10 Metrics Not Used Extent of GDP coverage Customer satisfaction from our annual web survey Number of web page hits Timeliness of publication Average revision size

11. 11 Indicator Findings ProgramBEAFRBResponseCV$/Unit$/Variable New Residential Construction545355 Value of Construction Put in Place542454 Advanced Monthly Retail541552 Monthly Retail Trade Survey542543 Monthly Wholesale Survey543444 Manufacturers’ Shipments, Inventories, and Orders Survey 544NA33 Quarterly Financial Report452525 Quarterly Services Survey541321 Average4.94.12.54.13.83.4

12. 12 Annual Findings ProgramBEAFRBResponseCV$/Unit$/Variable Information and Communication Technology Survey 443555 Annual Capital Expenditures Survey543455 Current Industrial Reports553343 Annual Public Employment Survey534545 Service Annual Survey544343 Annual Survey of Manufacturers555544 Annual Retail Trade Survey544533 Annual Government Finance Survey534534 Annual Trade Survey534411 Average4.93.93.84.33.7

13. 13 Initial Findings Assessment of individual programs can not be captured by a single measure Programs must be evaluated using multiple dimensions including some not considered BEA and FRB rankings support our criteria, but were not very useful in identifying lower priority programs Response rate measures strikingly different between indicators and annual surveys Efficiency measures not perfect, but significant differences warrant further investigation

14. 14 Conclusions Economic programs are meeting the needs of BEA and FRB quite effectively Any deep program cuts will significantly impact BEA source data No obvious programs to eliminate, collection and processing efficiencies offer some hope for funding future program improvements Leveraging existing surveys to collect new content is most cost effective approach