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Wednesday, March 01, 2006

Proposal to Eliminate Collection of SIPP Data on Economic Well-Being

This is not a good idea. Data like these are essential in evaluating the effectiveness of government programs and for research into the design of better policy:

Census Bureau Survey Falling on Hard Times - Possible Loss of Data on Needy Protested. by D'Vera Cohn, Washington Post: A Commerce Department proposal to eliminate a Census Bureau survey on the economic well-being of U.S. residents is drawing fire from researchers and lawmakers concerned about losing a source of information about the impact of government social programs on needy families.

Under the Bush administration's proposed budget, the Survey of Income and Program Participation, which began collecting data two decades ago, could stop doing so in September. In its place, Census Bureau officials said they are designing a better and less expensive system that could begin to collect data in a year or two.

But more than 250 economists and social science researchers, including 2001 Nobel Economics Laureate George A. Akerlof, have signed a letter to be sent to Congress tomorrow stating that the survey provides unique data for evaluating government programs, and urging that it be fully funded. ...

At the recent confirmation hearing of Edward P. Lazear to be chairman of the Council of Economic Advisers, Sen. Paul S. Sarbanes (D-Md.) said it would be "a major step backwards" to drop the survey. The survey ... follows people for two to four years, asking about their use of welfare, unemployment insurance, Medicaid and other government programs.

But the Census Bureau cited problems that include delays in publishing data and difficulty in persuading people to answer the lengthy questionnaire. Howard R. Hogan, an associate director of the bureau, said the agency had been "sketching out plans" to redesign the survey when the tightened budget demanded that changes be made. ...

Defenders say the survey's problems are no worse than those of other surveys in an era when people increasingly refuse to answer questionnaires. They are suspicious the decision was driven by budget considerations, not data quality; they also question whether the government will be willing to fund a new program. "There are a ton of very important policy issues that we won't be able to look at without this survey," said Heather Boushey, an economist at the Center for Economic Policy and Research...

The money saved from better policy is far greater than the cost of these surveys and there are ways to overcome survey problems. Quoting Michael Murray's new econometrics text from a section discussing social experiments conducted in the 1970s and 1980s:

All of the large social experiments had to grapple with serious logistical and statistical problems. Do short-duration experimental programs tell us much about actual long-term programs? Do attrition bias and nonreporting bias invalidate the inferences from the experiments? Are the locations chosen for the experiments representative of the nation as a whole...? Researchers overcame enough of these problems by applying well-known statistical methods and by inventing new methods, so that all the experiments added richly to our understanding of the social policies they addressed.

The great social experiments of the 1970s and 1980s ... each has had a lasting positive impact on social policy. Despite this success, few additional social experiments have followed in the wake of these first efforts. The cost of social experiments is high-the NHIE cost almost $150 million-and government seldom funds such big ticket items in times of fiscal distress. But if we compare the $150 million cost of the NHIE with the $7 billion cost savings from knowing to use modest cost sharing in health insurance policies, we might conclude that additional social experiments can be worthwhile social investments.

    Posted by on Wednesday, March 1, 2006 at 12:17 PM in Economics | Permalink  TrackBack (1)  Comments (16)


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