Nicholas Eberstadt, Ryan Nunn, Diane Whitmore Schanzenbach, and Michael R. Strain write,
Objective, impartial data collection by federal statistical agencies is vital to informing decisions made by businesses, policy makers, and families. These measurements make it possible to have a productive discussion about the advantages and disadvantages of particular policies, and about the state of the economy. This document demonstrates a portion of the breadth and importance of government statistics to public policy and the economy.
Pointer from Timothy Taylor. who adds his endorsement.
Cynics who have read James Scott would mutter something about making the citizenry more “legible.”
So be it. I think that the private sector also benefits greatly from government statistics.
But are the data any good? Thomas Piketty, Emmanuel Saez, and Gabriel Zucman write,
Macroeconomics relies on national accounts data to study the growth of national income, while the study of inequality relies on individual or household income, survey, and tax data. Ideally all three sets of data should be consistent, but they are not. The total flow of income reported by households in survey or tax data adds up to barely 60% of the national income recorded in the national accounts, with this gap increasing over the past several decades.
Pointer from Mark Thoma.
The authors proceed to use this data to make dramatic pronouncements and to propose major policy changes. This is the sort of move that disturbs Russ Roberts and me. If you know that the data are too inconsistent to be allowed to speak for themselves, and you know that other methods of working with the data might yield very different results, why do you pretend to speak with the voice of divine revelation?
Let’s not let the perfect be the enemy of the good. U.S. data collection agencies are among the best in the world. The data may be imperfect, but all data are. Economists and statisticians are adept at correcting empirically for data errors and lacuna. What is the alternative? No data at all and flying by the seats of of our pants?
It doesn’t matter if U.S. data collecting agencies are among the best in the world if certain data isn’t accurate enough to be useful, which of course is a judgement call.
I thought it was funny that Eberstadt was one of the three writing since he has used ridiculous future data that don’t yet exist for over 15 years for his articles on the “population crisis” in Japan and elsewhere as he assumes the health of an 85 or 90 year old will look the same in 2035 as it did in 2015, completely discounting likely advancements in medicine.
The CBO played this game around 2006 with its projection of health care costs out to the year 2085. That is not a typo, 2085, and put in just a line or two how in the past improvements in medical technology have increased health care costs so can assume that will hold another 80 years.
I think a bright 11 year could see through that argument, yet they released that report showing costs just go up and up and up. A few years later I was relieved to read the economists in that group strongly resisted forecasting beyond 2026 although unfortunately caved to stupidity in the end.
A cynic might say that people want things produced by others to be free and easy to get, while they also want the things they produce to be expensive and under their tight and exclusive control.
So, government statistics are data collected, analyzed, and published for free, and which many academics find useful.
Meanwhile, we already know that most academics are reluctant to publish all their full data sets and program codes online for everyone to both scrutinize and use. Peer review referees often have to sign all sorts of nondisclosure agreements.
The cynic could be even more cynical and say that the government could get a lot more bang for its public buck if it insisted as a condition of accepting public funding that all research results – data and published papers – be available to the public for free, and that many publicly-funded academics currently calling for more funding of government statistics would resist such a reform if it applied to their own research.
They might even argue the case in expensive, subscription-only publications that carry articles that often use the free government information. “You didn’t build that, somebody else made that happen.”
So true.
The smarter you are, the better you are able to defend your hypocrisy–and to delude yourself.
The best salesmen believe their own line.
Required disclosure of data should extend not only to groups that are directly funded by the federal government, but also those that rely on tax-deductible donations.
I’ve long argued, obviously to no avail, that groups like the Tax Policy Center (part of the Urban Institute and Brookings) should be required to disclose the programs used to make their budget estimates on tax proposals. These tax-exempt groups have a huge influence on public policy and elections, yet their methods are allowed to remain largely secret. This is not at all in the public interest.
What they do is attempt to rectify those noted shortcomings, not ignore them, by addressing the business/capital and public/government sides as they affect households. How well they accomplish this is discussable, but that doesn’t make their results unnoteworthy.