The bureau performs large surveys and censuses that provide statistics about the American people and the U.S. economy. The business activities of the bureau can be divided into four categories: decennial and other periodic census programs, demographic programs, economic programs, and reimbursable work programs that are conducted mainly for other federal agencies. During fiscal year 2000, the bureau conducted the actual decennial count of U.S. population and housing as of April 1, 2000, which is its largest and most complex activity. The results of the 2000 decennial census are used to apportion seats in the U.S. House of Representatives, draw congressional and state legislative districts, and form the basis for the distribution of an estimated $200 billion annually of federal program funds over the next decade to state and local governments. Since the 1970 census, the bureau has used essentially the same methodology to count the vast majority of the American population during the decennial census. The bureau develops an address list of the nation’s households and mails census forms (questionnaires) to those households asking the occupants to mail back the completed forms. The bureau hires temporary census takers, known as enumerators, by the hundreds of thousands to gather the requested information for each nonresponding household. Over time, because of social and attitudinal changes, the public became less willing to participate in the decennial census. By 1990, these problems escalated to the point where the most expensive census up to that time produced less accurate results than the preceding census. Consequently, the bureau’s plan for the 2000 census included the above elements but also included several important innovations to the census process designed to improve census accuracy. For example, prior to the 2000 census, local and tribal government officials were given expanded opportunities to review the bureau’s address list and identify missing addresses for inclusion in the census. The bureau also implemented the New Construction Program, which invited local governments to submit addresses for housing units that had been built subsequent to the completion of the address list in January 2000. In addition, the 2000 census questionnaires were available upon request in six languages, and households were given expanded opportunities to respond to the 2000 census by telephone or via the Internet. Also, for the 2000 census, the bureau initiated the largest promotion and outreach effort in its history for a decennial census and conducted the first-ever paid advertising campaign. As indicated in table 1, the increase in decennial census full-cycle costs in recent decades has been dramatic. Expressed in dollars of fiscal year 2000 purchasing power, the full-cycle costs of the decennial census rose from $920 million for the 1970 census to a current estimate of about $6.5 billionfor the 2000 census, for an increase of about 600-percent after adjusting for inflation. The Gross Domestic Product (GDP) price index was used to adjust for inflation for the 1970, 1980, 1990, and 2000 censuses, while projections for years 2001 through 2003 were adjusted using factors from the Congressional Budget Office’s Economic and Budget Outlook, January 2001. Since census costs depend primarily on the expense of delivering a mail questionnaire to a housing unit or having an enumerator visit a housing unit, it is more realistic to relate cost growth to the rise in the number of housing units rather to population growth. Even when housing units are vacant and contain no household, there is a cost to ascertaining that fact. Therefore, the number of housing units is the relevant unit to consider for cost analysis. A housing unit may be a house, an apartment, a mobile home, a group of rooms, or a single room that is occupied (or, if vacant, is intended for occupancy) as separate living quarters. Separate living quarters are those in which the occupants live separately from any other individuals in the building and which have direct access from outside the building or through a common hall. For vacant units, the criteria of separateness and direct access are applied to the intended occupants whenever possible. If that information cannot be obtained, the criteria are applied to the previous occupants. Both occupied and vacant housing units are included in the housing unit inventory. Boats, recreational vehicles, vans, tents, and the like are housing units only if they are occupied as someone’s usual place of residence. Vacant mobile homes are included provided they are intended for occupancy on the site where they stand. Vacant mobile homes on dealers’ lots, at factories, or in storage yards are excluded from the housing inventory. Also excluded from the housing inventory are quarters being used entirely for nonresidential purposes, such as stores or offices, or quarters used for the storage of business supplies or inventory, machinery, or agricultural products. The estimated full-cycle costs of the 2000 census do not take into account all costs of the decennial census. For example, as of September 30, 2000, about $85 million of costs for estimated claims for unemployment for temporary workers are not included in the cost per housing unit figures in this report. Any unemployment claims paid are absorbed by the Federal Employees Compensation Account in the Unemployment Trust Fund, administered by the Department of Labor, without reimbursement by the bureau. As shown in figure 1, the cost per housing unit in constant fiscal year 2000 dollars grew from $13 in 1970 to $56 in 2000, a 330-percent increase. In constant fiscal year 2000 dollars, the estimated full-cycle cost of the 2000 decennial census of about $6.5 billion is nearly double the $3.3 billion cost of the 1990 decennial census. When full-cycle cost is divided by the number of American households of 117.3 million in 2000 and 104.0 million in 1990, the cost per housing unit of the 2000 census of $56 increased 75- percent compared to the 1990 census cost of $32 per housing unit. Table 2 shows the cost increases in eight broad “frameworks” of effort used by the bureau in its financial management reports for the 2000 census. The $24 cost per housing unit increase was primarily the result of increased costs in four of the eight frameworks: (1) $16 for expanded field data collection methods, (2) $3 for the extensive use of technology and contractor support, referred to as automated data processing and telecommunications support, (3) $2 for more enhanced methods for data content and products, and (4) $2 for increases in marketing, communication, and partnership programs. Finally, other areas such as the compilation of a complete and accurate address list and the testing of the census design contributed the remaining $1 of the $24 increase in the 2000 census compared to the 1990 census. Framework 3, Field Data Collection and Support Systems, was the most expensive and the largest component of census costs, contributing about $16 or two-thirds of the $24 increase in per housing unit cost of the 2000 census. Field data collection is labor-intensive and includes operations such as nonresponse follow-up, which entails temporary workers, known as enumerators, visiting millions of households that did not return census questionnaires by mail or otherwise respond. As indicated in table 2, the cost for this framework for the 1990 census was about $1.7 billion, which accounted for half of the total $32 per housing unit cost. However, for the 2000 census, costs for this framework more than doubled to about $3.8 billion or $32 of the total $56 per housing unit cost. The $16 increase for the 2000 census occurred due to (1) expanded data collection operations, (2) lower productivity for enumerators who conducted the nonresponse follow-up operation, and (3) higher logistic support costs. First, according to the bureau, expanded data collection operations contributed about $14 of the $16 increase in field data collection costs. For example, for the 2000 census, the bureau expanded coverage improvement programs, which were designed to improve census coverage and accuracy. For the 2000 census, the coverage improvement program included for the first time the enumeration of addresses from the update/leave operation and new construction follow-up. Also, another example of expanded operations for the 2000 census was the telephone questionnaire assistance center. For the 1990 census, the telephone questionnaire assistance was conducted by bureau staff members, who handled over 2 million calls and worked in six processing centers. For the 2000 census, the telephone questionnaire assistance center was operated by contractors, who handled about 6 million calls and operated from 22 nationwide call centers. We could not analyze each data collection operation and compare the 2000 census to the 1990 census, except for the nonresponse follow-up operation discussed below, due to incomplete or missing cost and performance data for the 1990 census. Second, lower enumerator productivity for the nonresponse follow-up operation in the 2000 census compared to the 1990 census contributed about $1 of the $16 increase in costs in the field data collection area. According to the bureau, enumerator productivity to visit nonresponding households and complete questionnaires in the 1990 census was 1.56 cases per hour but dropped by one-third to 1.04 cases per hour in the 2000 census. Productivity is calculated by dividing the total workload (the number of housing units) by the total number of production hours worked. For the 1990 census, the bureau had a workload of over 39 million nonresponding housing units as compared to a workload of about 42 million nonresponding housing units in the 2000 census for a 7-percent increase. About 25 million production hours for the 1990 census increased to about 40 million production hours for the 2000 census for a 60-percent increase. However, according to the bureau officials, the higher production hours for the 2000 census were due to more quality assurance procedures, such as crew leader edits and enhanced office checks, plus more re-interview checks. Information on enumerator productivity rates by type of local census office, the bureau’s methodology for refining the productivity data, and factors that could improve the collection and analysis of productivity data in the future are highlighted in our October report.