Legislation may cause data deficit for researchers, small businesses

Oct 07, 2013

Small farms and businesses may be the unintended victims of legislation aimed at cutting the federal budget by eliminating certain sets of local and county-based economic data, according to a group of economists.

"This local data is really what we use in our lab," said Stephan Goetz, professor of and regional economics, Penn State, and director of the Northeast Regional Center for Rural Development. "And, at the end of the day, we're using this information to try to understand how our world is changing."

The researchers, who report their findings in Choices Magazine, said that sequestration and proposed legislation, such as the Census Reform Act of 2013, will cut the reporting of some types of local economic and sociological data. For example, the legislation could eliminate county personal income by industry and unemployment insurance data provided by the Bureau of Economic Analysis. Researchers use county per capita income by industry to measure how different sectors of a county are performing. Unemployment insurance data helps researchers understand employment trends in specific areas.

Analysis of this municipal and county-level data can also help entrepreneurs who run small businesses and farms recognize demographic changes and economic swings that can lead to market opportunities, according to the researchers.

"Someone who owns a can see certain demographic trends and realize new opportunities," Goetz said. "For example, a restaurant may be able to tailor its menu if the restaurant owner knows that there is a new group of immigrants in their community."

The data that covers rural areas also gives researchers the chance to see how macroeconomic trends and policies, such as interest rate changes, are affecting communities.

"We will be in the dark without the data," said Goetz. "We won't know whether policy changes we implemented are effective or not, and that could end up costing us more than we were trying to save."

Economists can use the information to find communities that may be more vulnerable to the impact of globalization and global imports, as well as opportunities for communities to foster businesses that may succeed in global markets, said Goetz, who wrote the report with Mark Partridge, Swank Chair in Rural-Urban Policy and professor of agricultural, environmental and development, Ohio State University, and Maureen Kilkenny, senior fellow, National Center for Food and Agricultural Policy.

Goetz said that an unintended consequence of the move to trim the budget may lead to governments enacting ineffective policies that actually increase budgets.

"We won't be able to anticipate what services are needed and we might not be able to see and develop opportunities when they arise," said Goetz.

Other alternatives to the collection, such as allowing private industry to gather and distribute data, may not help small entrepreneurs.

"Most likely, only larger businesses will be able to afford the ," said Goetz, "leaving the businesses that most need it—small entrepreneurial firms—blind to possible economic threats and ."

Small firms, however, tend to be the economic drivers, according to the researchers.

There is compelling evidence that small, locally owned firms are key engines of both economic growth and of job creation, the noted.

Explore further: Study looks at stock market performance of polarizing brands

add to favorites email to friend print save as pdf

Related Stories

Hate group formation associated with big-box stores

Apr 11, 2012

The presence of big-box retailers, such as Wal-Mart, K-Mart and Target, may alter a community's social and economic fabric enough to promote the creation of hate groups, according to economists.

Recommended for you

Which foods may cost you more due to Calif. drought

22 hours ago

With California experiencing one of its worst droughts on record, grocery shoppers across the country can expect to see a short supply of certain fruits and vegetables in stores, and to pay higher prices ...

Performance measures for CEOs vary greatly, study finds

Apr 16, 2014

As companies file their annual proxy statements with the U.S. Securities and Exchange Commission (SEC) this spring, a new study by Rice University and Cornell University shows just how S&P 500 companies have ...

Investment helps keep transport up to speed

Apr 16, 2014

Greater investment in education and training for employees will be required to meet the future needs of the transport and logistics industry, according to recent reports by Monash University researchers.

User comments : 0

More news stories

Newlyweds, be careful what you wish for

A statistical analysis of the gift "fulfillments" at several hundred online wedding gift registries suggests that wedding guests are caught between a rock and a hard place when it comes to buying an appropriate gift for the ...

Can new understanding avert tragedy?

As a boy growing up in Syracuse, NY, Sol Hsiang ran an experiment for a school project testing whether plants grow better sprinkled with water vs orange juice. Today, 20 years later, he applies complex statistical ...

Roman dig 'transforms understanding' of ancient port

(Phys.org) —Researchers from the universities of Cambridge and Southampton have discovered a new section of the boundary wall of the ancient Roman port of Ostia, proving the city was much larger than previously ...

Crowd-sourcing Britain's Bronze Age

A new joint project by the British Museum and the UCL Institute of Archaeology is seeking online contributions from members of the public to enhance a major British Bronze Age archive and artefact collection.

Scientists tether lionfish to Cayman reefs

Research done by U.S. scientists in the Cayman Islands suggests that native predators can be trained to gobble up invasive lionfish that colonize regional reefs and voraciously prey on juvenile marine creatures.

White House updating online privacy policy

A new Obama administration privacy policy out Friday explains how the government will gather the user data of online visitors to WhiteHouse.gov, mobile apps and social media sites. It also clarifies that ...