Developing a Sampling Frame 

for the Annual Integrated 

Economic Survey

Justin Z. Smith, Adam Smeltz

Economic Statistical Methods Division

James Burton, Economic Management Division

U.S. Census Bureau

Any opinions and conclusions expressed herein are those of the author(s) and do not reflect the views of the U.S. Census Bureau. The 

Census Bureau has reviewed this data product for unauthorized disclosure of confidential information and has approved the disclosure 

avoidance practices applied. (CBDRB-FY22-ESMD010-020).

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Outline

• Annual Integrated Economic Survey (AIES) Background

• Definitions

• Initial Frame

• Sampling Frame

• Challenges and Solutions

2
AIES Background

• Historically, the U.S. Census Bureau’s annual economic statistics 

programs developed independently

• National Academies of Sciences panel recommendations helped lead 

to the AIES

• See National Academies of Sciences, Engineering, and Medicine (2018). 

Reengineering the Census Bureau’s Annual Economic Surveys. Washington, 

DC: The National Academies Press. 

3
AIES Background

• The AIES program aims to create a single frame that can be used by 

the integrated survey covering the target populations of the following 

precursor annual surveys: 

• Annual Capital Expenditures Survey (ACES) 

• Annual Retail Trade Survey (ARTS)

• Annual Survey of Manufacturers (ASM)

• Annual Wholesale Trade Survey (AWTS)

• Manufacturers’ Unfilled Orders (M3UFO) Survey

• Service Annual Survey (SAS)

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Definitions

• Establishment: an economic unit, generally at a single physical location, where 

business is conducted or where services or industrial operations are performed

• Enterprise: an economic unit comprising one or more establishments under 

common ownership or control, the top-level U.S. parent company and all 

subsidiary U.S. companies of which the parent owns or controls a majority (more 

than 50 percent) interest plus all EINs and establishments affiliated with the 

parent and its subsidiaries—i.e., a domestic enterprise group (For this 

presentation we will use the term company to mean enterprise.)

• Employer Identification Number (EIN): an administrative unit that the IRS has 

assigned a unique identifier for use in tax reporting

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Definitions

• Single unit (SU): If an enterprise, an EIN, and an establishment 

represent one and the same thing

• Multiunit (MU): If an enterprise has

• One or more EIN(s) and

• Two or more establishments

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Frame Creation

• General flow of the AIES frame creation process:

• create the full frame

• apply the in-scope criteria to create the initial AIES frame

• create out-of-scope table

• create the broad line table for AIES establishments

• create AIES classification variables for sampling purposes

• create the sample frame

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Approximate Company and Establishment 

Counts

Source Companies Establishments

Full Frame 18,800,000 20,000,000

In-scope frame 7,450,000 9,200,000

Sample 400,000 2,000,000

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Full Frame

• Extract a comprehensive list of employer establishments from the

Business Register (BR)

• The BR is a central, multipurpose, business list, a primary source of

survey frames, and contains administrative data, such as tax records

from the Internal Revenue Service (IRS)

• An employer establishment is an establishment that has paid

employees

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Initial Frame – Apply In-scope Criteria

• Type

• Include active establishments classified as SU or MU entities

• Business Activity

• Include establishments that have either

• payroll in the current year, or

• payroll or receipts from the most recent Economic Census

• Geography

• Include establishments operating in the 50 states plus DC

• Classification

• Include employee establishments in the manufacturing, mining, utilities, 

construction, wholesale, retail, agricultural services, and services sectors

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Initial Frame - Exclusions

• To exclude:

• Out-of- scope industries such as Crop production, Animal Production and 

Aquaculture, Post Office, Private households (home businesses with no paid 

employees), and Offices of notaries

• Establishments classified in the public sector (government)

• Establishments with incomplete/inadequate NAICS classification (partial 

NAICS)

• Establishments that do not meet in-scope criteria will be output to an 

out-of-scope dataset with flags indicating which criteria was not met

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Challenges – Partial NAICS Codes

• Matching 6-digit codes in AIES to an official list of all valid 6-digit

codes showed about 300 in-scope establishments have a partial code

• If the code was partial, then the national tabulation industry was set

to blank

• Unless the partial code is an ACES-only level that is needed at less than 6-digits

• This will set the company initial probability of selection at the

national industry level to blank, and the initial probability of selection

will be that associated with the geography level

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Initial Frame – Assign Variables

• Assign state

• Best Federal Information Processing System (FIPS) code set for SUs based on state 

where establishment is physically located (if known), otherwise set to mailing state

• MU establishments should always have a physical FIPS

• Assign wholesale type of operation code (TOC)

• TOC is necessary for assigning wholesale establishments to AIES sampling recodes

• Identifies between Distributors, Manufacturers’ Sales Branches and Offices, and Agents, 

Brokers, and Electronic Markets

• Legal form of organization is used to assign tax status for selected service 

industries

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Challenges – Wholesale Type of Operation 

Codes

• The type of operation code (TOC) identifies a wholesale establishment as 

either a Distributor (1X), Manufacturers' Sales Branches and Offices (2X), or 

Agents and Brokers (4X)

• Merchant Wholesalers (NAICS 423 and 424) can be either 1X or 2X while 

Electronic Markets and Agents and Brokers (NAICS 425) can be only 4X

• On the initial frame, there were many instances of establishments in NAICS 

423 or 424 with TOC=4X and establishments in NAICS 425 with TOC=1X or 

2X

• The TOC codes were thoroughly reviewed and rules were established for 

assigning them during the frame extraction

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Challenges – Tax Status for Services

• While reviewing the initial tests of sampling, we noticed some certainty strata were created because they contained a single company on the frame

• Some of these strata had a NAICS and tax status combination that we believed 

should not exist. The tax status on the frame is correct because a company in any 

industry can meet requirements to become tax-exempt

• We reviewed which industries for which the Service Annual Survey (SAS) 

publishes either only taxable or only tax-exempt estimates. If an establishment was in a NAICS that SAS only publishes taxable estimates (e.g., general 

automotive repair), but it was listed as tax-exempt on the frame, its tax status was reassigned to taxable for sampling

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Initial Frame – Payroll As Measure of Size

• On the frame we have payroll, employment, and receipts

• Payroll was selected to use for measure of size (MOS) because:

• Employment has many zeroes, because it is employment as of March 12th

• No receipts at establishment level, available at EIN level but not at 

establishment level, outside of the Economic Census

• Due to timing of 2024 mailout, data review for 2022 Economic Census will 

probably not be complete

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Initial Frame – Measure of Size Creation

• Create a Measure of Size (MOS) variable for each establishment based 

on administrative annual payroll from the current reference period 

(2022 for the production frame)

• The MOS at the establishment level is input to key sampling 

parameters

• Strata allocations

• Company inclusion probability

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Initial Frame – Measure of Size Creation

Establishment MOS hierarchy

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Step Description Notes

1 Sum current annual payroll and 

annual payroll for leased employees

SU and MU

2 Annualize payroll using quarterly 

administrative payroll 

SU only

For example, if only Q1-Q3 are present, then 

ANNUALIZED_PAYROLL_2020 = (4/3)*sum(Q1, Q2, Q3)

3 Adjust Economic Census payroll 

(2017) to current year payroll

SU and MU

For example, calculate adjustment factors 

median(ANNUAL_PAYROLL_2020/ANNUAL_PAYROLL_2017) at 

the NAICS4 level using those cases that have positive 

ANNUAL_PAYROLL_2020 and ANNUAL_PAYROLL_2017

4 Sum EIN’s Quarterly Payrolls for the 

year / # of EIN’s establishments

MU only

For example, for an MU as part of an EIN with 6 establishments: 

sum(Q1, Q2, Q3, Q4)/6
Challenges – Auxiliaries

• Some MU companies have auxiliary establishments (e.g., a 

warehouse that only services the company) which are considered 

out-of-scope to AIES

• Including or excluding auxiliary payroll could change the probability of 

inclusion

• Research is underway to determine if payroll from these auxiliaries 

should be included in the company MOS, and if so, how

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Sampling Frame

• From the SU and MU in-scope establishment frames, the following 

are created:

• Combined establishment frame

• Certainty company frame

• Certainty national industry roster

• Certainty industry by geography roster

• Noncertainty company sampling frames by sector

• Noncertainty national industry roster by sector

• Noncertainty industry by geography roster by sector

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Rosters

Company Sampling 

Stratum Company MOSc

1 2 Industries 181

2 > 1 State 64

3 AAAA_MO 54

4 AAAB_MO 100

Company (Sampling) Unit

Unit Company “Sampling 

Stratum”

MOS

1_AAAA 1 AAAA 104

1_AAAB 1 AAAB 77

2_AAAA 2 AAAA 64

3_AAAA 3 AAAA 54

4_AAAB 4 AAAB 100

Roster 1: National Industry 

Tabulation Units

Unit Company Ind State MOS

1_AAA_MO 1 AAA MO 118

1_AAA_TN 1 AAA TN 63

2_AAA_MO 2 AAA MO 37

2_AAA_TN 2 AAA TN 27

3_AAA_MO 3 AAA MO 54

4_AAA_MO 4 AAA MO 100

Roster 2: Geography Industry 

Tabulation Units
Combined Establishment Frame

• National tabulation industry and geographic tabulation industry get set

• national tabulation industry is the 6-digit NAICS plus a sector-specific detail

• geographic tabulation industry is the 3-digit NAICS plus a sector-specific detail

• Each establishment is assigned to one of 27 geographies based on its state 

FIPS code. The 27 geographies include 23 direct-use states and 4 balances of 

region 

• Indicators are set on some establishments to select them with certainty 

(probability = 1)

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Geographic Groups for AIES Sampling Design

Region Total States Direct-Use States Balance of Region States

Northeast 9 Massachusetts, New York, New 

Jersey, Pennsylvania

5 (Connecticut, Maine, New Hampshire, Rhode 

Island, Vermont)

Midwest 12 Illinois, Indiana, Michigan, 

Minnesota, Missouri, Ohio, 

Wisconsin

5 (Iowa, Kansas, Nebraska, North Dakota, South 

Dakota)

South 16 Florida, Georgia, Maryland, North 

Carolina, Tennessee, Texas, 

Virginia

9 + DC (Alabama, Arkansas, Delaware, District of 

Columbia, Kentucky, Louisiana, Mississippi, 

Oklahoma, South Carolina, West Virginia)

West 13 Arizona, California, Colorado, 

Oregon, Washington

8 (Alaska, Hawaii, Idaho, Montana, Nevada, New 

Mexico, Utah, Wyoming)

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Challenges – Invalid State Codes

• There are approximately 350 establishments with invalid state codes

• Because we have strata defined as 3-digit NAICS by Geography, they 

do not currently fit into these noncertainty strata

• A decision is still pending on if they should be excluded or how they 

could be included

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Company Frame

• Aggregated values of quantitative establishment data

• Categorical variables such as NAICS and geography levels contain

• A single value (e.g., state = MO) if all establishments associated with the 

company have the same value

• “Mult” otherwise

• A variable that contains the company’s most detailed NAICS

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AIES Designation of Initial Certainty Stratum 

by Complexity

Stratum Contains 

Establishment 

Certainty

Number of 

Sectors

Number of 4-

digit NAICS 

Industries

Number of 

Geographies

Certainty Y Not considered Not considered Not considered

N ≥ 2 ≥ 2 Not considered

N 1 ≥ 3 Not considered

N 1 2 ≥ 2

N 1 2* 1

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*Excluding retail (sector 44-45) and healthcare (sector 62)
Company Frame Stratification

• Remaining companies are each assigned to a noncertainty stratum 

within their sector

• Because we are selecting a PPES sample and some companies may 

have MOS = 0, we create separate stratum to select some of these 

companies

• Noncertainty companies in sectors which are in-scope for only 

national level capital expenditures (sectors 11, 21, 23, and 55) are 

assigned to their single sector stratum

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Company Frame Stratification Continued

• Noncertainty companies in retail (sector 44-45) and healthcare 

(sector 62) that operate in more than one 4-digit NAICS are assigned 

to their sector’s multi-NAICS stratum

• Noncertainty companies that operate in more than one state are 

assigned to the multi-geography by 3-digit NAICS stratum

• The rest of the noncertainty companies are assigned to one of the 27 

geography by 3-digit NAICS strata

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Noncertainty Strata Definitions

Stratum Company MOS Capital 

Expenditures 

Sector

Number of 4-

digit NAICS 

Industries

Number of 

Geographies

Sector MOS=0 

stratum

0 Not considered 1 or 2** ≥ 1

Sector stratum > 0 Y 1 ≥ 1

Sector multiNAICS stratum> 0 N 2** 1

3-digit NAICS 

multi-geo stratum

> 0 N 1 ≥ 2

3-digit NAICS by 

geo stratum

> 0 N 1 1

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**Only sectors 44-45, 62
Challenges – Sampling NAICS level differences 

between ACES and the other annual surveys

• The ACES survey overlaps NAICS codes with the other five surveys but

samples at a less detailed level

• Create final strata as 3-digit NAICS by Geography and evaluate the

national level CVs at the 6-digit level, except for the NAICS that are only

included in ACES

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Thank you!

justin.z.smith@census.gov

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