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Multiple Classification Systems For Economic Data: Can A Thousand Flowers Bloom? And Should They?

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  • Robert H Mcguckin
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    Abstract

    The principle that the statistical system should provide flexibility-- possibilities for generating multiple groupings of data to satisfy multiple objectives--if it is to satisfy users is universally accepted. Yet in practice, this goal has not been achieved. This paper discusses the feasibility of providing flexibility in the statistical system to accommodate multiple uses of the industrial data now primarily examined within the Standard Industrial Classification (SIC) system. In one sense, the question of feasibility is almost trivial. With today's computer technology, vast amounts of data can be manipulated and stored at very low cost. Reconfigurations of the basic data are very inexpensive compared to the cost of collecting the data. Flexibility in the statistical system implies more than the technical ability to regroup data. It requires that the basic data are sufficiently detailed to support user needs and are processed and maintained in a fashion that makes the use of a variety of aggregation rules possible. For this to happen, statistical agencies must recognize the need for high quality microdata and build this into their planning processes. Agencies need to view their missions from a multiple use perspective and move away from use of a primary reporting and collection vehicle. Although the categories used to report data must be flexible, practical considerations dictate that data collection proceed within a fixed classification system. It is simply too expensive for both respondents and statistical agencies to process survey responses in the absence of standardized forms, data entry programs, etc. I argue for a basic classification centered on commodities--products, services, raw materials and labor inputs--as the focus of data collection. The idea is to make the principle variables of interest--the commodities--the vehicle for the collection and processing of the data. For completeness, the basic classification should include labor usage through some form of occupational classification. In most economic surveys at the Census Bureau, the reporting unit and the classified unit have been the establishment. But there is no need for this to be so. The basic principle to be followed in data collection is that the data should be collected in the most efficient way--efficiency being defined jointly in terms of statistical agency collection costs and respondent burdens.

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    File URL: ftp://ftp2.census.gov/ces/wp/1991/CES-WP-91-08.pdf
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    Bibliographic Info

    Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 91-8.

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    Date of creation: Dec 1991
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    Handle: RePEc:cen:wpaper:91-8

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    Related research

    Keywords: CES; economic; research; micro; data; microdata; chief; economist;

    References

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    1. Steven J. Davis & John Haltiwanger, 1990. "Gross Job Creation and Destruction: Microeconomic Evidence and Macroeconomic Implications," NBER Chapters, in: NBER Macroeconomics Annual 1990, Volume 5, pages 123-186 National Bureau of Economic Research, Inc.
    2. Salop, Steven C, 1987. "Symposium on Mergers and Antitrust," Journal of Economic Perspectives, American Economic Association, vol. 1(2), pages 3-12, Fall.
    3. Froeb, L.M. & Werden, G.J., 1991. "Correlation, Causality, and all that Jazz: The Inherent Shortcomings of Price Tests for Antitrust Market Delineation," Papers 91-6, U.S. Department of Justice - Antitrust Division.
    4. Werden, G.J., 1990. "Four Suggestions On Market Delineation," Papers 90-5, U.S. Department of Justice - Antitrust Division.
    5. George J. Stigler & Robert A. Sherwin, 1983. "The Extent of the Market," University of Chicago - George G. Stigler Center for Study of Economy and State 31, Chicago - Center for Study of Economy and State.
    6. Robert H Mcguckin & George A Pascoe, 1988. "The Longitudinal Research Database (LRD): Status And Research Possibilities," Working Papers 88-2, Center for Economic Studies, U.S. Census Bureau.
    7. Thomas A Abbott III & Stephen H Andrews, 1990. "The Classification of Manufacturing Industries: an Input-Based Clustering of Activity," Working Papers 90-7, Center for Economic Studies, U.S. Census Bureau.
    8. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, December.
    9. Gollop, Frank M & Monahan, James L, 1991. "A Generalized Index of Diversification: Trends in U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 318-30, May.
    10. White, Lawrence J, 1987. "Antitrust and Merger Policy: A Review and Critique," Journal of Economic Perspectives, American Economic Association, vol. 1(2), pages 13-22, Fall.
    11. Maxwell R. Conklin & Harold T. Goldstein, 1955. "Census Principles of Industry and Product Classification, Manufacturing Industries," NBER Chapters, in: Business Concentration and Price Policy, pages 15-55 National Bureau of Economic Research, Inc.
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