The Value of the American Community Survey: Smart Government, Competitive Businesses, and Informed Citizens

The American Community Survey (ACS) is the largest continuous household survey in the United States, providing a wealth of information about the economic, social, and demographic characteristics of persons, as well as housing characteristics. One goal of the ACS is to serve as a cost-effective vehicle for collecting information required by law, regulation, or executive order on behalf of Federal agencies or at the direction of Congress. In conducting the ACS, the U.S. Census Bureau leverages its existing infrastructure and data collection expertise on behalf of the Federal Government. Like the decennial census long form before it, the ACS provides comprehensive and representative statistical information about large and small communities on a variety of important topics — all while protecting respondents’ confidentiality. In addition, because the ACS is a continuous survey, the data is published annually, providing more timely information than the once-per-decade long form. The value of the ACS lies in its ability to provide statistical information representing large and small communities and demographic groups across the Nation that can be used by governments, businesses, and individuals to make better decisions. This ability depends upon sufficiently large samples from these communities, which in turn depends on the mandatory nature of the survey. About 3.5 million households are sampled every year for the American Community Survey, and it takes respondents a total of about 2.4 million hours per year to answer the survey. In exchange, the Nation acquires uniquely comprehensive, representative, topical, and timely data about its communities that serves as an essential component of the information infrastructure relied upon by decision makers throughout the country. What would happen to the quality of decision making if the ACS were less comprehensive, representative, topical, or timely? The answer depends upon the specific use to which the data would be put and require speculation about what, if any, data would be used instead. Still, Canada’s recent experience in moving from a mandatory to a voluntary survey provides some insight into the value of a comprehensive, representative, topical, and timely survey, and what happens when those qualities are compromised. After it became voluntary, the Canadian survey yielded much lower response rates, resulting in information that less comprehensively and reliably covered the small areas of Canada — and at a higher cost. Canadian decision makers were left to use out-of-date data that did not necessarily represent the specific geographic areas in question. ACS data is uniquely tailored to help guide myriad specific decisions across the country, making government more intelligent, businesses more competitive, and the public more informed. As a tool for smarter government, ACS data offers evidence to help government operate better. Federal agencies rely on the ACS to help them make operational decisions, including managing and evaluating programs, allocating over $400 billion in funds, determining eligibility for programs, and benchmarking other statistics. For example, the Department of Veterans Affairs (VA) uses ACS data to estimate the number and geographic distribution of veterans with service-connected disabilities who are eligible but not registered for VA health services. State and local communities use the wealth of information provided by the ACS for a wide variety of purposes, including comprehensive planning, economic development, and research on local issues and conditions. For example, a researcher generated maps of vulnerable populations, such as students, households in poverty, and persons with disabilities in the path of a lava flow on the island of Hawaii, using small-area population and demographic estimates from the ACS. And the Greater Houston Partnership, which works with companies to retain and create jobs, make investments to expand the tax base, and increase general business activity and local incomes, uses ACS data to answer companies’ questions about such things as commuting times and the availability of science and engineering workers.The ACS provides immense value beyond government. Often, intermediaries combine ACS data with other data, analyze it, tabulate it, use it in models, and display it in charts, maps, and tables to help decision makers make better use of it. As a tool for more competitive businesses, ACS data provides reliable information to help businesses make a wide variety of decisions, from where to locate a store to what to stock on the shelves. Locating a business is a critical decision, with more than $55 billion spent on commercial construction last year. Businesses, such as Kroger, rely on third-party proprietary models that use ACS small area estimates to project sales for potential new grocery stores sites or remodeling of existing stores. Likewise, with retail inventories of over $563 billion last year, businesses need solid evidence about how to stock their shelves. Retailers, such as Target, use the ACS for neighborhood-level demographic data such as population density, owner-occupancy, and household size to determine the optimal mix of goods with which to stock its stores throughout the country. This report provides other examples of how ACS data has served as an important component of the information that businesses use to stay competitive — helping them run efficiently, hire wisely, and serve their customers’ needs. And as a tool for a more informed public, ACS data is used by researchers and the media to advance the Nation’s understanding of a broad range of issues. This report discusses examples of these uses as well. No other source of data offers what the ACS can: timely information about important topics, comprehensively covering communities throughout the Nation with the statistical precision to represent them accurately and to compare them. Without the ACS, decision makers throughout the country would be left to make decisions based on information that is, relative to the ACS, stale, incomplete, unreliable, or not as relevant.