EconoMonitor

The War on Data Collection

Ignorance is bliss edition.

From BusinessWeek:

[The Census Bureau, BEA and BLS] have always had to fight for more funding. Now they may have to fight just to keep their budgets intact. As part of $19 billion in nondefense discretionary cuts in Paul Ryan’s (R-Wis.) budget—recently passed by the House of Representatives—the agencies are likely to get less funding.

The Senate is unlikely to embrace the Ryan budget in its entirety. Yet specific proposals show what the House has in mind. The House Committee on Appropriations recently proposed cutting the Census budget to $878 million, $10 million below its current budget and $91 million less than the bureau’s request for the next fiscal year. Included in the committee number is a $20 million cut in funding for this year’s Economic Census, considered the foundation of U.S. economic statistics.

Some people argue that trying to track the economy is a waste of money as the bureaucrats will just manipulate the data to (e.g., Ricardo in his DickF incarnation in 2009). From the article:

Some believe the Census Bureau does too much already. “They waste a share of their budget on studies that no one actually uses,” says Chris Edwards, an economist with the Cato Institute, who cites periodic surveys on such items as the total hog count in the U.S. to prove his point. “A lot of that could be done by the private sector.”

For the rest of us who think it’s important to know what is happening in the world, I think there are clear dangers of shortchanging statistical agencies [1].

I would be remiss in my duties if I didn’t mention the latest Economic Report of the President contains several “Data Watch” boxes, highlighting the data acquisition and analytical issues facing the Nation. From Data Watch 2-1:

as the U.S. economy continues to evolve, the work of accurately measuring service activity grows accordingly. Despite recent innovations in the collection of primary source data, there are still conceptual issues pertaining to the appraisal and definition of services that remain unresolved. As an example, improvements in health care have contributed to longer life spans and better quality of life, but there is not a consensus about how to value and incorporate these benefits in a national income accounting framework. Similarly, industries such as finance largely produce intangible outputs that are difficult even to identify, much less quantify. Furthermore, although estimates of international trade in services are now more detailed than was the case before the 1980s, the statistics still could and should be improved. Data on the prices of traded services are extremely limited, and even the most disaggregated data collected by the BEA on services extend to only 36 categories, in contrast to thousands of categories for manufactured goods. Continued research and investment in the development of data on services are needed to ensure timely and accurate measurement of the U.S. economy.

This post originally appeared at Econbrowser and is posted with permission.

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