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New Research on National Statistics and Administrative Data

Paper Session

Sunday, Jan. 8, 2017 1:00 PM – 3:00 PM

Hyatt Regency Chicago, Acapulco
Hosted By: American Economic Association
  • Chair: Carol Corrado, Conference Board

The Political Economy of National Statistics

Diane Coyle
,
University of Manchester

Abstract

There have been several challenges over the decades to the status of real GDP growth as the headline indicator of economic progress. This includes forceful critiques from those urging the need to account for environmental sustainability. To date, however, the challenges have not affected the everyday use of GDP statistics in policy and political debate. This may now be changing due to the influence of the technology sector. Digital technologies are altering significantly the structure of production and consumption in ways that raise questions about issues such as the loss of business model invariance of GDP and whether the conventional production boundary judgement remains meaningful. Moreover, the digital sector is exerting its lobbying influence in policy debate to raise the profile of its criticisms of the conventional statistical definitions and practices, arguing that the figures obscure the industry’s ‘true’ contribution to the economy. As a result, for the first time since the 1950s, there is a broad coalition in favour of the replacement of GDP as the gauge of economic health, prompting a perhaps surprising degree of popular interest in national accounting. However, there is no equivalent breadth of voices coalescing around a single alternative measure (or set of measures). Instead, there is a proliferation of alternative approaches. This paper models the setting of standards for economic measurement as a co-operative game with multiple potential equilibrium outcomes, and considers the conditions for a move away from the prevailing statistical standard. The success of such a move depends on whether there is sufficient agreement on an alternative standard to enable a co-ordinated move. However, there is unlikely to be sufficient consensus without a compelling theory around which economists and policymakers can coalesce – the role played by Keynes’s macroeconomics in the original creation of today’s national accounting standards.

Public Health Insurance, Labor Supply, and Employment Lock: Effects or Data Artifacts?

Elena Gouskova
,
Populogic Research

Abstract

Using Social Security Administration (SSA) data on employment and Census population estimates, we re-examine the labor supply effect of a large public health insurance disenrollment that took place in Tennessee in 2005. The disenrollment left about 4 percent of Tennessee's non-elderly, adult population without public coverage and was previously reported in Garthwaite, Gross, and Notowidigdo (2014) to have caused large increases in labor supply. These labor supply increases were interpreted as evidence of "employment lock," i.e. people finding employment in order to secure health insurance coverage. In contrast to the previous research conducted with the Current Population Survey (CPS), we estimate small and not statistically significant labor supply increases in SSA/Census data.<br />
<br />
We propose that the large estimates in the original analysis are biased due to data error. Thus, using CPS data we find that the observed increases in the share of workers in the CPS are driven primarily by declines of Tennessee's civilian population rather than increases in the number of people being employed. Furthermore, we find the labor supply increases estimated in the original paper mask dramatic gender differences: remarkably large labor supply increases for men and much smaller and not statistically significant for women. Finally, the alternative employment measure available in the CPS – employment during last year -- suggests considerably smaller and not statistically significant labor supply increases in Tennessee following the dis-enrollment.<br />
<br />
The paper contributes to the literature in three ways. First, it narrows the range of existing estimates of the effect of public health insurance on labor supply. Second, it uses a mostly unknown source of employment data. Third, it considers the possibility that survey data error can cause time-space-group data variation — the situation which violates standard assumptions and is often ignored in policy evaluations using difference-in-differences and triple-difference approaches.

Capturing the Productivity Impact of the ‘Free’ Apps and Other Ad-Supported Media

Leonard Nakamura
,
Federal Reserve Bank of Philadelphia
Jon Samuels
,
U.S. Bureau of Economic Analysis
Rachel Soloveichik
,
U.S. Bureau of Economic Analysis

Abstract

"Free" consumer entertainment and information from the Internet, largely supported by advertising revenues, has had a major impact on consumer behavior. Some economists believe that measured GDP growth is badly underestimated because GDP excludes online entertainment (Brynjolfsson and Oh 2012; Ito 2013; Aeppel 2015). This paper introduces an experimental GDP methodology which includes advertising-supported media in both final output and business inputs. For example, Google Maps would be counted as final output when it is used by a consumer to plan vacation driving routes. On the other hand, the same website would be counted as a business input when it is used by a pizza restaurant to plan delivery routes. <br />
Contrary to BEA's critics, including 'free' media in the input-output accounts has little impact on either GDP or TFP. Between 1998 and 2012, measured nominal GDP growth falls 0.005% per year, real GDP growth rises 0.009% per year and TFP growth rises 0.016% per year. The changes to nominal GDP, real GDP and TFP are even smaller before 1998. <br />
Our method for accounting for 'free media' is production oriented in the sense that it is a measure of the resource input into the entertainment (or other content) of the medium, rather than a measure of the consumer surplus arising from the content. BEA uses a similar production oriented approach when measured GDP. In contrast, other researchers used broader approaches to measure value (Brynjolfsson and Oh 2012), (Varian 2009) and (Bughin et. al 2011). We've also explored a more expansive accounting methodology which incorporates some of the network effects from online media. With this expansive accounting, the productivity boom from 1995 to 2000 becomes even stronger and the weak productivity growth of the past decade may be ameliorated somewhat
Discussant(s)
Carol Corrado
,
Conference Board
Matthew Notowidigdo
,
Northwestern University
Marshall Reinsdorf
,
International Monetary Fund
JEL Classifications
  • C8 - Data Collection and Data Estimation Methodology; Computer Programs