Pigovian Tax: Analysis and Overview

Pigovian Tax: Analysis and Overview Neo-classicals uphold perfect competition as the ideal state of the market. But in truth, the economy is fraught with market failures. Therefore, we need government interference to correct many of these market failures. Pigovian Tax imposed by the government is one such course of intervention. It helps to curb negative externalities (e.g. pollution) and reduce the burden on the society caused by the externalities (social costs of production and consumption). Moreover, it attacks over-consumption, bringing it closer to the socially optimal level of production and/or consumption. The paper examines the effects of Pigovian tax and analyses its degree of effectiveness on an economy. What is Pigovian Tax? Pigovian tax is a kind of tax, which is levied to correct a negative cost that is created by the actions of any business firm, but that is not considered in a firms private costs or profits. Also known as sin tax, it is a tax placed on an action with a  negative externality,  to correct market failure (Mankiw, 2010). In the presence of negative externalities, the  social cost  Ã‚  of a market activity is not covered by the private cost of the activity. In such a case, the market outcome is not  efficient  Ã‚  and may lead to over-consumption of the product. A Pigovian tax equal to the negative externality is thought to correct the market outcome back to the level of efficiency. For example, a factory does not financially take into consideration the damages caused to the environment by their emissions. By imposing Pigovian Tax, the government can artificially make the firms bear the cost of the damages, which will ideally be equal to what the price would have been if a market for such an activity existed. In a country like Canada with a publicly funded health care system, that is, where the medical service of every patient is funded from government revenues, the cigarette tax acts as a Pigovian tax it raises the revenue necessary to offset the expenses towards the health care system, as a consequence of smoking. Pigovian Tax in Implementation This idea was first put forward by Arthur Cecil Pigou in the year 1912. In his book, The Economics of Welfare, he argued that industrialists seek their own marginal private interest, while not taking into account the social costs of their activities. Pigovian tax is the difference between marginal social cost and the marginal private cost, which is equal to the marginal external cost, shown as Tax in the diagram. The tax level may not equal the marginal external cost at quantities other than the socially optimum equilibrium level. The diagram indicates that marginal external cost increases with increase in quantity produced or consumed. After imposition of the Pigovian Tax, the new supply curve intersects demand (the marginal benefit) at the socially efficient quantity. As a result, the new competitive equilibrium, taking into account the amount of the tax, is efficient. Although this tax works perfectly in theory, its practical implementation is very difficult due to a lack of complete information on the cost of the damages to the environment. When Arthur Pigou first came up with the concept, he laid down a set of assumptions, one of which is a perfectly competitive market. Yet, perfect competition is an unrealistic situation. Monopoly, monopsony and oligopoly markets are commonplace. To internalize the external cost, the government needs to intervene by way of imposing taxes. Pigovian tax can be applied to all spheres of production, be it production of a good (automobile) or service (transportation, banking etc). Baumol and Oates (1975) argue that if Pigovian tax is set equal to the level of marginal damage (external cost) at the Pareto-optimal level of pollution, the industry will move towards its optimal pollution level. The tax is applied to the production of a good that has an externality. Overhead: Pigovian Tax Anatomy from Diagram 2- i. Unregulated result (Q, P) ii. Socially efficient level of production = Q iii. Efficient Pigovian tax = P-P iv. Tax payment to government (shared by consumer and producers = PACP v. Gross benefit from decrease in externality = ADBC vi. Foregone consumption benefits i.e., the social cost of abatement = ABC vii. Net benefit to society = ADB Pigovian tax enhances welfare of the society; restricting over-consumption. It also generates additional revenue for the government. Roland Coase (1960) propounded that if markets may not secure the optimal amount of externality, they can be very gently nudged in that direction without the necessity for full-scale regulatory activity. Yet again, the coarse theorem faces criticism. Property rights are not as strictly defined as required by the coarse theorem. Coarse argued that social costs are even worse if only the offender pays for the social harm and not the consumers for whom the goods and services are produced. Under the Pigovian Tax, it is only the firms who pay for the externalities. Moreover, it is difficult to calculate the right tax in a world of imperfect Coarsian bargains. The concept has evolved through time and many similar ideas were developed such as the Coarse theorem, emission trading i.e. cap and trade (Europe), Environmental Protection agencies (U.S.) formed with the idea of command and control, carbon tax, and tradable permits. The principal problem remains that of quantifying the externality. There is some debate about whether to quantify externalities if the methods are imperfect. The usual response is that as long as we are honest about the flaws in the numbers, it is better to have some numbers than none (Phillips, Carl V, 1999). The benefits accrued by taxing externalities are more than that without taxing the externalities as shown with the game theory approach. The co-ordination game consists of two players, Company A and Company B, with two strategies: Subject to Pigovian Tax and Not Subject to Pigovian Tax. The payoffs of each player are given in the matrix. Nash equilibrium occurs at 2 points, when both companies are subject to Pigovian taxes and when both companies are not subject to Pigovian taxes. If both the companies are ready to bear the social costs, the benefits of sustainability accrued to the companies and society as a whole are more than if the costs are not borne by either company. The many forms of Pigovian Tax Since players dont always come to a socially efficient negotiation, there is a traditional way of limiting externalities command and control. This approach sets quantity limits on activities that have external effects. However, the method is cumbersome. While this method has been undertaken by the US government, the economies of Europe consider cap and trade as a better solution. It causes the least polluting firms to do the majority of the production since their social cost of production is the lowest. Rajeev K. Goel and Edward W. T. Hsieh laid down a two-period model in their research (Durable Emissions and Optimal Pigovian Taxes) where a social planner minimizes social damage by setting the per-unit Pigovian tax on a polluting monopolist. Results show that for a given level of production, the durability of emissions and the socially optimal Pigovian tax are negatively related. Mike Moffatt, in his article named Pigovian Taxes Joining the Pigou  Club; Promoting Economic Growth and Reducing  Externalities, wrote in favor of Pigovian Tax, stating, One of the uses of taxes is to discourage activity that has negative externalities, or we believe is otherwise economically/socially harmful. The benefits accrued versus the inherent failings In addition to correcting social disequilibrium, these taxes also raise revenue for the state. In 2004-2005, the Canadian government collected $16.7 billion in other taxes, which were largely Pigovian taxes such as energy taxes and excise taxes on cigarettes and alcohol (Moffat, 2006). In theory, using Pigovian taxes to correct what economists call market failures is simple. But in practice, its not so. The important problem often ignored by advocates of Pigovian taxes is what might be called the measurement problem or the Knowledge Problem. Pigou himself also declared that it must be confessed, however, that we seldom know enough to decide in what fields and to what extent the State, on account of [the gaps between private and public costs] could interfere with individual choice (Pigou, 1954). Pigou and  Friedrich Hayek  point out that the assumption that the government can determine the marginal social cost of a negative externality and convert that amount into a monetary value is a key weakness in the framework of the Pigovian tax. The economists blackboard model assumes knowledge we dont possess its a model with assumed givens, which are in contrast with real-world happenings.  Friedrich Hayek  would argue that this is knowledge which could not be prov ided as a given by any method, yet could be discovered, due to insuperable cognitive limits. However, the key difficulty with this tax is calculating what level of applied tax would counterbalance the negative externalities. Even when a Pigovian tax is charged to correct the market imperfection in a world with regulations and efficient transfers, the observed amount of the externality (e.g., pollution) is unlikely to be zero since we will still observe some externalities as a consequence of the exchanges and transfers. The rate of tax best set should be equal to the per-unit external cost that spills over into the society. A tax imposed without such calculations may well be inefficient and redundant. There is also political influence on the levied tax, in such a way that lobbying of government by the polluters may tend to reduce the level of the tax levied and which would ultimately reduce the mitigating effect of tax and lead to increase in production. Instead of accomplishing the goal of the tax imposed, the burden shifts to the society. Thomas A. Barthold (1994) argued that in the US in the year 1994, the actual policy decisions often came from budget requirements, and not concern for the environment. The taxes do not always comply with economic theory because social benefits and costs are hard to measure. He uses the 1989 Montreal Protocol as an example. President George H. W. Bush signed this protocol that allowed either a permit auction or a tax on ozone-depleting chemicals. Barthold attributes the decision to implement the tax to the pressure on the Ways and Means committee to come up with more consistent revenue. Like the other taxes imposed by the government, Pigovian tax gives air to malpractices like black marketing, smuggling and child labour, especially if they create large differences in the prices of products, which are popular, and if the demand for the product increases in spite of the increase in production. Pigovian Tax imposed by the government is a complex mechanism. It has its societal merits and elementary de-merits. While it covers the cost of negative externalities and eliminates the burden of society, on the same page, it may also hamper the growth of industries leading to inefficiency of small industries. In a monopsony market, where there is only one buyer, it is difficult to impose Pigovian tax since the burden of the tax will be borne by one entity. This may consequently lead to rise in the prices of the commodity. When Pigovian tax is imposed, in a monopolistic competitive market, the tax will be borne by a large number of consumers and hence, the burden of tax is divided. While it can be said that imposing Pigovian tax would lead to a reduction in the level of quantity produced of a commodity by an industry, it can also cause the industries to look upon to new advancements in technologies. This will open doors to research and innovation in the field. For example, the company AkzoNobel Industrial Chemicals is always trying to innovate and make a leap forward in its development to achieve its target to reduce CO2 emissions. Its production facility in Mariager in Denmark uses wood to generate electricity. Wood and other plant-based materials are also used to produce chemical building blocks. Moreover, this shift in technology by commodity producers will cause the externality to be automatically internalised. Whatever benefits Pigovian taxes might be able to provide, it will usually give diminishing returns past a certain point, where the government might fail to achieve their objectives of meaningfully reducing the excess social costs. Instead, these kinds of taxes would appear to simply become a vehicle by which politicians may raise tax revenue by imposing a discriminatory tax policy aimed at an undesirable minority. Therefore, only where  institutional and trade solutions are not efficient, the government should consider whether specific  interventions, regulation or specific  taxes are appropriate to address externalities. These measures are preferable when the net efficiency gains from the  intervention are larger than the associated administrative and compliance costs. This suggests that intervention is desirable when externalities are reasonably large.

American Community Survey

American Community Survey An Overview of the American Community Survey Have you ever thought about how, or why, new roads, schools, after-school programs, or hospitals are placed in communities? What makes communities attractive to new businesses or tourists? Why there is no ATM or video store on a street corner? The answers often lie in the numbers: numbers that reflect what our communities look like, how our communities have changed, and how those changes impact our daily lives. Most importantly, the numbers reflect how our communities are meeting the needs created by these changes.Traditionally, these numbers have been collected during the census every 10 years. Those numbers play a critical role for states and local communities in determining their share of federal money for schools, roads, senior citizen centers, and other services. In today’s world, our communities can change very quickly. Between decennial censuses, local governments, organizations and businesses need t imely data to assess and plan for local needs. Costly mistakes can result when planners do not have current data on which to base their decisions. That is one of the reasons why the U. S.Census Bureau has moved to a whole new way of gathering data to help answer those questions. Rather than taking a snapshot of a community once every ten years, the American Community Survey provides a dynamic and much timelier moving picture of the nation, every year. Overview * What is the American Community Survey? * Content * Survey Methodology * Data Products * How is it different from Census 2000? This presentation will give you an overview of the American Community Survey. We will answer the question â€Å"What is the American Community Survey? † and then move on to discuss the content, methodology, and data products.We will wrap up with a brief summary of how the American Community Survey is different from Census 2000. What is the American Community Survey? The American Community Surve y, sometimes referred to as the ACS, is a nationwide survey that collects essentially the same information on people and housing that was collected on the long-form questionnaire used in Census 2000. The American Community Survey is a continuous survey, in which each month a sample of housing unit addresses receives a questionnaire. About three million addresses are surveyed each year.The American Community Survey is a critical element in the Census Bureau's new approach to future censuses. Decennial Census In Census 2000, the census used 2 forms 1. â€Å"short† form – asked for basic demographic and housing information, such as age, sex, race, how many people lived in the housing unit, and if the housing unit was owned or rented by the resident 2. â€Å"long† form – collected the same information as the short form but also collected more in-depth information such as income, education, and language spoken at home * Only a small portion of the population, called a sample, received the long form.Two forms were used during Census 2000. The â€Å"short form† asked several questions on the most basic demographic and housing topics. These questions asked about age, sex, race, Hispanic origin, the number of people living in the housing unit, and if the housing unit was owned or rented by the resident. The â€Å"long form† collected the same information as the â€Å"short form,† but it also asked questions on additional topics. Thirty-two questions were asked of each resident of the housing unit on such topics as marital status, education, language spoken at home, employment, occupation, and others.Twenty-one questions were asked about the housing unit itself, so only one resident of that housing unit was asked to provide information on such topics as plumbing and kitchen facilities, type and cost of utilities, value of the property, and others. Only a sample of the total U. S. population received the long form. The dat a from the long form are called â€Å"sample data. † The basic data collected on both the short and the long forms are called â€Å"100 percent data† since these questions were asked for 100 percent of the U. S. population. 2010 Census and American Community Survey * 2010 Census will focus on counting the U.S. population * The sample data are now collected in the ACS * Puerto Rico is the only U. S. territory where the ACS is conducted * 2010 Census will have a long form for U. S. territories such as Guam and U. S. Virgin Islands * Same â€Å"short form† questions on the ACS The upcoming 2010 Census will include only one form sent to the entire U. S. population. That form will ask only questions similar to those contained in previous census short forms. The 2010 Census will provide a basic count of the U. S. population, collecting only the most basic demographic and housing information.Detailed demographic, social, economic, and housing data will no longer be col lected as part of the decennial census. * The data that were collected from the long form sample are now produced from the American Community Survey. * The American Community Survey collects data from the 50 states, the District of Columbia, and Puerto Rico, where it is called the Puerto Rico Community Survey. The American Community Survey does not collect data from the other U. S. territories, such as Guam and the U. S. Virgin Islands. The 2010 decennial census will continue to collect long form type data for these areas. The questions that are asked on the 2010 Census are also asked on the American Community Survey questionnaire.American Community Survey Content The content collected by the American Community Survey can be grouped into four main types of characteristics – social, economic, housing, and demographic. Let’s take a closer look at the type of information each of these categories contain. American Community Survey Social Characteristics * Education * Marit al Status * Fertility * Grandparent Caregivers * Veterans * Disability Status * Place of Birth * Citizenship * Year of Entry Language Spoken at home * Ancestry/ Tribal Affiliation Social characteristics include topics such as education, marital status, fertility, grandparent caregivers, veterans, disability status, place of birth, citizenship status, year of entry, language spoken at home, ancestry and tribal affiliation. American Community Survey Economic Characteristics * Income * Benefits * Employment Status * Occupation * Industry * Commuting to Work * Place of Work Economic characteristics include such topics as income, benefits, employment status, occupation, industry, commuting to work, and place of work.Data on the economic characteristics of the population are collected to assess the well-being of individuals and households. American Community Survey Housing Characteristics * Tenure * Occupancy ;amp; Structure * Housing Value * Taxes ;amp; Insurance * Utilities * Mortgage/M onthly Rent Housing characteristics include topics such as tenure, occupancy and structure, housing value, taxes and insurance, utilities, and mortgage or monthly rent. This housing data gives us a measure of the housing stock of the country. American Community Survey Demographic Characteristics * Sex Age * Race * Hispanic Origin The American Community Survey also collects the basic demographic characteristics such as sex, age, race and Hispanic origin. This is the same information that will be collected by Census 2010. American Community Survey 2008 Content Changes * Three new questions * Health Insurance Coverage * Veteran’s Service-connected Disability * Marital History * Deletion of one question * Time and main reason for staying at the address * Changes in some wording and format Several changes were made to the American Community Survey questionnaire at the beginning of 2008.Three new questions were added and one question was deleted. The three new questions are on heal th insurance coverage, veteran’s service-connected disability, and marital history. These new data will begin to be available during the data release in 2009. The deleted question measured the time and main reason for staying at the sampled address. These data were used for internal research purposes and the data were not published in the data products. Changes were also made to some of the demographic questions so that they are consistent with the questions that will be on the 2010 Census questionnaire.American Community Survey Methodology * Sample includes about 3 million addresses each year * Three modes of data collection * mail * phone * personal visit * Data are collected continuously throughout the year About 3 million addresses are selected for the American Community Survey sample every year. The American Community Survey data collection operation uses three modes that take place over a three-month period: mail, telephone, and personal visit. For most housing units th e first phase of data collection includes a questionnaire mailed to the sample address for the household to complete and return by mail.If no response by mail is received, the Census Bureau follows up with computer assisted telephone interviewing, or CATI, if a telephone number is available for the address. If the Census Bureau is unable to reach an occupant of the unit using CATI, or if the household refuses to participate, the address may be selected for computer assisted personal interviewing, or CAPI. At any point in this process, receipt of a completed questionnaire from the sampled address results in the address being removed from the data collection workload. Data for the American Community Survey are collected continuously throughout the year.Interviews conducted between January 1st and December 31st of a given year are aggregated to produce annual estimates for calendar years. For example, interviews conducted between January 1st and December 31st of 2009 are aggregated to produce estimates for 2009. American Community Survey Target Population * Resident population of the United States and Puerto Rico * Living in housing units and group quarters * Current residents at the selected address * â€Å"Two month† rule Interview and residence rules define the target population for a survey.These rules therefore identify the units and the people eligible for inclusion in the survey. The sampling frame reflects this choice of universe, as do the instructions on the forms and in the procedures used by survey interviewers during follow-up. The American Community Survey collects data from all persons without regard to their legal status or citizenship. In 2005 the target population was limited to the housing unit population of the US and Puerto Rico. For the first time in 2006, and for every year thereafter, the American Community Survey has included the resident population living in BOTH housing units and group quarters.The American Community Survey resid ence rules were established to collect data from people who are currently living at the selected address. For inclusion in the survey, these rules require that, at the time the questionnaire is completed, the respondent is living or staying at the housing unit address for more than two months. American Community Survey Group Quarters Group quarters are places where people live or stay that are normally owned or managed by an entity or organization providing housing and/or services for the residents.These services may include custodial or medical care as well as other types of assistance, and residency is commonly restricted to those receiving these services. The group quarters population is divided into two categories, the Institutional group quarters population and the Non-institutional group quarters population. The Institutional group quarters population includes residents under formally authorized supervised care. Examples of these facilities include skilled nursing facilities, adult correctional facilities, and psychiatric hospitals. The Non-institutional group quarters population includes residents of college/university housing, ilitary barracks, and group homes. American Community Survey Period Estimates * ACS estimates are period estimates, describing the average characteristics over a specified period * Contrast with point-in-time estimates that describe the characteristics of an area on a specific date * 1-year, 3-year, and 5-year estimates will be released for geographic areas that meet specific population thresholds American Community Survey period estimates describe the average characteristics of the population or housing over a specified period of time. In the case of American Community Survey one-year estimates, the period is the calendar year.For example, the 2007 American Community Survey data describe the population and characteristics of an area from January 1, 2007 through December 31, 2007, not for any specific day within the year. The Ame rican Community Survey collects survey information continuously nearly every day of the year and then aggregates the results over a specific period of time – one year, three years, or five years. The data collection is spread evenly across the entire period represented so as not to over-represent any particular month or year within the period. American Community Survey Data Products Release ScheduleAmerican Community Survey period estimates describe the average characteristics of the population or housing over a specified period of time. In the case of American Community Survey one-year estimates, the period is the calendar year. For example, the 2007 American Community Survey data describe the population and characteristics of an area from January 1, 2007 through December 31, 2007, not for any specific day within the year. The American Community Survey collects survey information continuously nearly every day of the year and then aggregates the results over a specific period of time – one year, three years, or five years.The data collection is spread evenly across the entire period represented so as not to over-represent any particular month or year within the period. American Community Survey Data Products Profiles * Data Profiles * Narrative Profiles * Comparison Profiles * Selected Population Profiles Tables * Detailed Tables * Subject Tables * Ranking Tables * Geographic Comparison Tables * Thematic Maps * Public Use Microdata Sample (PUMS) Files The American Community Survey data products are similar to those produced from the decennial census long form.Like the decennial sample data products, the American Community Survey products show the characteristics of the country’s population and housing. These products include four broad types of products – profiles, tables, thematic maps, and Public Use Microdata Sample, or PUMS, files. There are multiple types of profiles and tables – data profiles, narrative profiles, compar ison profiles, selected population profiles, detailed tables, subject tables, ranking tables, and geographic comparison tables. All of the data products are available on the Census Bureau’s American FactFinder.The data products are explored in depth in the presentation titled â€Å"Data Products from the American Community Survey. † American Community Survey Learning More * ACS Main Page * 2007 Data Product Details * Subject Definitions * Guidance on Comparing 2007 Data to Other Sources * Design and Methodology Report * The ACS Compass Products The American Community Survey Web site has a lot of information about the program, its data products, and evaluation of the data. The next several slides will present some valuable resources for learning more about the American Community Survey.We will look at the ACS Main page, the 2007 Data Product Details, Subject Definitions, Guidance on Comparing 2007 Data to Other Sources, the ACS Design and Methodology Report, and The ACS Compass Products. The upcoming slides show static images of the American Community Survey Web site taken in late-September 2008. As the Web site is continually updated, these images may differ slightly from what is currently on the active Web site. At the bottom of each of the upcoming slides are the Internet addresses for the Web page that the slide is referencing. American Community Survey ACS Main PageThe American Community Survey Main Page has links to valuable information. Currently, one of those links is the â€Å"2007 ACS Data Release. † It is accessible under the â€Å"Highlights† section on the main American Community Survey Webpage: http://www. census. gov/acs/www. The Highlights section changes periodically so the most recent American Community Survey happenings are highlighted. You can always access information on the latest data release by clicking on â€Å"Access Data† in the top menu bar or by directly typing in the Web address, http://www. censu s. gov/acs/www/Products/. American Community Survey 2007 Data ReleaseThe 2007 ACS Data Release page includes links to four ways to access American Community Survey data. They are the American FactFinder, the File Transfer Protocol or FTP site, the Public Use Microdata Sample or PUMS files, and Request a Custom tabulation. It also contains data user tools and tips as well as important documentation. This page is where you can access much of the information you may need when using American Community Survey data. In the image on this slide, arrows highlight hyperlinks to 2007 Data Product Details and Comparing ACS Data, both located under the Data User Tools and Tips column.Under the Documentation column, arrows highlight hyperlinks to Subject Definitions, Errata, User Notes, and the ACS Design and Methodology report. We will now briefly explore each of these resources. American Community Survey 2007 Data Product Details The 2007 Data Product Details contains table shells and their ID numbers, maps, geographic areas, and more. At the top left of the page, you can use the drop down menu to select the state you’re interested in and it will produce the list of geographic areas that are published for that state. There will be a similar tool for the three-year estimates that will be released in December 2008.The box in the middle of the page allows you to look at table shells by topic. These table shells do not contain any data, however they are a useful mechanism for seeing the data that are offered and the format of those data before going to American FactFinder to begin your data retrieval. At the bottom of the page you’ll find some downloadable files that contain detailed documentation on the data products. One of these files allows users to see if the 2007 American Community Survey produced a table that is comparable to a table produced from the Census 2000 Summary File 3.Another file lists all of the tables that are new, have been deleted, or have been modified since the release of the previous year’s data. Also on this page is a document that provides instructions for applying statistical testing to American Community Survey data, so that you can test to see whether changes in the data are statistically valid. Each of these files will open in a new window and can be saved on your computer. American Community Survey 2007 Data Product Details The image on this slide shows the table crosswalk that is found by clicking on the link titled â€Å"Census 2000 Summary File 3 detailed tables with comparable ACS tables. The crosswalk offers information about the table’s title, id number and the subject area for both the Census 2000 Summary File 3 and the 2007 American Community Survey. It also contains information on how the 2007 American Community Survey and Census 2000 Summary File 3 tables correspond to one another.This is available as a downloadable Excel file from the Data Product Details page. American Community Su rvey Comparison Guidance * Comparing 2007 ACS to 2006 ACS * Census Bureau supports comparisons made between 2006 and 2007 ACS data * Comparing 2007 ACS to Census 2000 Differences between the 2007 ACS and Census 2000 include residence rules, universes, and reference periods. The Census Bureau provides guidance to users that want to compare 2007 American Community Survey data with data from other sources. You will also find a link on this web page to guidance on comparing 2006 ACS data to other sources. Guidance is needed before drawing conclusions because in some instances comparisons could be misleading due to differences in questions or methods. The Census Bureau supports comparisons made between 2006 and 2007 ACS data.When comparing 2007 American Community Survey data to Census 2000 data, the user should keep in mind the differences that exist between the 2007 ACS and Census 2000. As noted earlier, these include differences in residence rules, universes, and reference periods. For example, the 2007 ACS uses a â€Å"two-month† residence rule – defined as anyone living for more than two months in the sample unit when the unit is interviewed whereas Census 2000 used a â€Å"usual residence† rule – defined as the place where a person lives or stays most of the time.We encourage you to review the guidance on our website which provides useful information for every variable. American Community Survey Comparing Data The Census Bureau provides guidance to users that want to compare 2007 American Community Survey data with data from other sources. You will also find a link on this web page to guidance on comparing 2006 ACS data to other sources. Guidance is needed before drawing conclusions because in some instances comparisons could be misleading due to differences in questions or methods. The Census Bureau supports comparisons made between 2006 and 2007 ACS data.When comparing 2007 American Community Survey data to Census 2000 data, the u ser should keep in mind the differences that exist between the 2007 ACS and Census 2000. As noted earlier, these include differences in residence rules, universes, and reference periods. For example, the 2007 ACS uses a â€Å"two-month† residence rule – defined as anyone living for more than two months in the sample unit when the unit is interviewed whereas Census 2000 used a â€Å"usual residence† rule – defined as the place where a person lives or stays most of the time.We encourage you to review the guidance on our website which provides useful information for every variable. American Community Survey User Notes The user notes section provides important information about the data by specific year. For example, the first note listed on the screen references the â€Å"Modification Made in 2007 ACS Weighting Methodology for Orleans and St. Bernard Parishes in Louisiana. † It states the following: â€Å"The review of the 2007 operational data disco vered evidence that suggests a high incidence of misclassification of uninhabitable units as vacant units.The effect of misclassification was almost entirely removed through a modification in the weighting methodology for Orleans and St. Bernard Parishes. The effect of the weighting adjustment was to down-weight units that had the vacancy status of ‘Other Vacant. ’ This modification resulted in more consistent and accurate ACS estimates of the number of vacant units and ‘persons per household’ in these two parishes. This modification was also made to the 2006 ACS weighting methodology. † American Community Survey Errata NotesThe Errata notes page will provide users with information on any updates made to the data due to detected errors. For example, the errata note 46, which is the first entry on the screen, references â€Å"Subject Table S2101 and Base Table B21002 for years prior to 2007, period of military service. † The errata note states t he following: â€Å"Due to an editing error, veteran's period of service (VPS) was being incorrectly assigned for some individuals. The majority of the errors misclassified some people who reported only serving during the Vietnam Era as having served in the category â€Å"’Gulf War and Vietnam Era. The remainder of the errors misclassified some people who reported only serving between the Vietnam Era and Gulf War as having served in the category ‘Gulf War. ’ These errors have been resolved for the 2007 tabulations. â€Å" American Community Survey Subject Definitions The Subject Definitions document is a glossary of all American Community Survey measures. In the 2007 version, definitions of the quality measures describing American Community Survey data have been added. Versions for the 2002 through 2007 American Community Surveys are available. American Community SurveySubject Definitions The Subject Definitions document includes explanations of the measures. For example, the partial definition of the â€Å"Language Spoken at Home and Ability to Speak English† measure that is shown on this slide tells us that the questions are only asked of people aged 5 years and older. The full definition provides other important information about this measure. American Community Survey Design and Methodology Report * Important reference document covering methods used in producing ACS data * American Community Survey How to Use the DataThe ACS Design and Methodology paper describes the basic design of the American Community Survey and details the full set of methods and procedures that are currently in place. An updated version of the paper is forthcoming. This report can be accessed from the 2007 Data Release page. American Community Survey How to Use the Data The geography notes section provides a brief explanation of the Census Bureau’s geographic terms. Geography notes are located on the â€Å"How to Use the Data† Web page. The yellow toolbar that sits just below the American Community Survey banner is accessible from all pages on the AmericanCommunity Survey Web site. Click on â€Å"How to Use the Data,† which is the fourth tab from the right. American Community Survey Geography Notes The geography notes provide an overview of the types of geographic areas that are presented in American Community Survey data products. At the bottom of the page are printable . pdfs for the current year and past years of the American Community Survey. American Community Survey The ACS Compass Products * Set of educational handbooks aimed at specific audiences * Presentation slides on important ACS topics E-learning tutorial In recognition of the need to provide guidance on new concepts and the challenges they bring to users of American Community Survey data, the U. S. Census Bureau is developing a series of educational materials called The ACS Compass Products. The ACS Compass Products include user-specific handbook s, PowerPoint presentations, and an on-line tutorial. The handbooks provide user-friendly information about the ACS and the multiyear estimates available in 2008. Each handbook targets a specific user group including first time ACS data users.The PowerPoint presentations, such as this, provide important information on various aspects of the American Community Survey. These presentations were developed for two main purposes: (1) for individual to use to learn more about the ACS and (2) to provide a wide audience with the tools needed to conduct training on the ACS. Each presentation consists of approximately 35 slides and the accompanying speakers’ notes. The presentations have also been recorded as multimedia files so users can learn about the ACS without having to read the presentations or attend a training session.An on-line tutorial that enables users to understand and appropriately use ACS data is also planned for future release. American Community Survey Similarities wit h Census 2000 * Same questions and many of the same basic statistics * 5-year estimates will be produced for same broad set of geographic areas including census tracts and block groups Now that we have explored the American Community Survey program and products, let’s wrap up by answering the question â€Å"How is the American Community Survey different from Census 2000? As mentioned earlier, the American Community Survey asks many of the same questions and produces many of the same basic statistics as the sample data from Census 2000.American Community Survey data will be produced for geographies as large as the nation and as small as block groups. Five-year estimates will be produced for the same broad set of geographic areas that received sample data from Census 2000, including census tracts and block groups. American Community Survey Key Differences from Census 2000 Beginning in 2010, data for small geographic areas will be produced every year versus once every 10 years * Data for larger areas are available now and data for mid sized area will be available in December 2008 * Census 2000 data described the population and housing as of April 1, 2000 while ACS data describe a period of time and require data for 12 months, 36 months, or 60 months As opposed to the decennial census which produced data once every 10 years, the American Community Survey will provide a continuous stream of updated information for states and local areas.Updated data from the American Community Survey will be released every year. Updated data have been available since 2005 for areas with populations of 65,000 or more. Data in the form of three-year estimates will be available for areas with populations of 20,000 or more in December 2008. American Community Survey estimates provide information about the characteristics of population and housing for areas over a specified period of time.American Community Survey single-year and multiyear estimates contrast with â€Å"point-in -time† estimates, such as those from the decennial census long form samples, which are designed to measure characteristics as of a certain date or narrow time period. For example, Census 2000 was designed to measure the characteristics of population and housing in the United States based upon data collected around April 1, 2000, and thus its data reflect a narrower timeframe than American Community Survey data. American Community SurveyKey Differences from Census 2000 * The goal of ACS is to produce data comparable to the Census 2000 long form data * These estimates will cover the same small areas as Census 2000 but with smaller sample sizes * Smaller sample sizes for 5-year ACS estimates results in reductions in the reliability of estimates In Census 2000 approximately 17 percent of the housing units received a long form. Statistics from this sample were produced for a broad set of geographic areas including the nation, all states, counties, census tracts, and block groups.Fi ve years of American Community Survey data are needed to produce estimates comparable to the estimates produced from the Census 2000 long form. A benefit that users will gain from the American Community Survey is the more timely issuance of the data and the greater frequency with which the data are released. Also, it produces information for small areas, including tracts and block groups, which will be updated every year instead of once every decade. The sample sizes for the 5-year ACS estimates will be smaller than the sample sizes were for Census 2000. This will result in a reduction in the reliability of the estimate.

Importance of Mathematics and statistics to Economics Essay

INTRODUCTION Statistics and mathematics are everything to economics. infact statistics and Mathematics, the economic field wouldn’t even exist. Economist need statistics to represent data, to track and store information, to identify trends, to attribute value and mathematics to calculate those figures.The way to look at the relationship between statistics and economics is that economics is essentially the study of human decisions and trends, and how these have a financial impact. Economists rely on information to form analyses, understanding and opinion on the human activity that they are scrutinizing. This information comes in the form of statistical data. Statistics is the core around which economic deductions are built. It highlights the relationship between figures that would otherwise be meaningless, and is key to economic analysis. An example of this would be an economist trying to analyze the performance of a car manufacturer over the period of a year. Figures that show the car manufacturer’s sales, profits, costs, and other important economic information would be relayed through the use of statistics. Although people would be right to argue that economics requires more than just statistics (for example, it also relies heavily on understanding and monitoring of sociological factors), it’s undeniable that statistics form an integral part of what economics is all about. Infact the Role of mathematics and Statistics to the field of Economics cannot be over emphasized as we look at the below outlines IMORTANCE OF STATISTICS Statistics is the area of mathematics we use to explore and try to explain the uncertain world in which we live. You may be familiar with the use of statistics in opinion polls and market research, but it is also central to the manufacture and testing of many products, and, in particular, showing that modern drugs used in the treatment of disease in humans and animals are effective and safe. USE FOR PREPARING ACCOUNT Statistical methods are used for preparation of these accounts. In economics  research statistical methods are used for collecting and analysis the data and testing hypothesis. The relationship between supply and demands is studies by statistical methods, the imports and exports, the inflation rate, the per capita income are the problems which require good knowledge of statistics.Statistics are everything to economists. Without statistics, the economic field wouldn’t even exist.

Raising The Minimum Wage is Bad - Free Essay Example

Sample details Pages: 3 Words: 900 Downloads: 4 Date added: 2019/05/15 Category Law Essay Level High school Tags: Minimum Wage Essay Did you like this example? In the state of Arkansas this past November on the voting ballot was the choice for citizens to vote for the raising of the minimum wage to $11.00/hr over the next three years. At first glance, someone might think that this is a very good change but when taking a deeper look into the subject, it will reveal a lot of consequences that will cause a lot of trouble over time. Cost of living is going to rise, businesses will be less likely to hire when needed, unemployment numbers will rise and simple things such as a hamburger at McDonalds will go up.. Don’t waste time! Our writers will create an original "Raising The Minimum Wage is Bad" essay for you Create order Right now the minimum wage in the southern United States averages around $8.00/hr.(LaborLawCenter) This is the reason why housing is so much cheaper in the south than living in California where the minimum wage is $12.00 or New York where it is $11.00. Now imagine this, Arkansas having the same minimum wage as New York. There are four major entities that affect cost of living; housing, taxes, healthcare, food. The average rent for a 1,000 sq. ft. apartment is roughly $3500 where the same size apartment will run you around $800 in Arkansas.(RentCafe.com) Housing cost 379% more in New York compared to Arkansas. The biggest difference with the cost of living with Arkansas and New York is the housing cost with New York being 379% more to own a home than in Arkansas. Health insurance rates will skyrocket also. The average health insurance for Arkansas is right around $2800(Valuepenguin.com) with New York coming in over double the price with at $6800.(Empirecenter.org) When businesses raise minimum wage, theyre also having to give raises to the employees who make more than minimum wage. Who wants to goto a four year school, spend lots of money for classes and then come out making $15/hr for a nursing job when they could go flip burgers at the local burger joint for $11 and not be liable for someones life? When employees get raises, then cost of goods rises as well affecting the overall cost of living. Along with cost of living going up, there will be a rise in the unemployment rate as well. It is really simple economics when it comes to this aspect of raising the minimum wage. Non-skilled labor jobs are easy to come by. An employer will pay X amount to this position. When the wage gets over that threshold, the employer will be less likely to hire for this position. What this equals is that position going away altogether instead of being paid a lower wage. Now that job along with the services it provided are gone. Economist Richard Vedder quotesIf the price of something rises, people buy less of it including labor. Thus governmental interferences such as minimum-wage laws lower the quantity of labor demanded. What he is saying is basically clarifying what is written above. In February 2017, Wendys CEO Bob Wright states there is a 4% increase in wages across the board in his company. First, they could cut margins, but with an 8% margin, thats unlikely. The second option is to raise prices. Given how price-sensitive consumers are these days, that too is a non-starter. Finally, the firm could reduce the amount of labor they use and thats exactly what they did. Wendys eliminated 31 hours of labor per location, per week.(businessinsider.com) Now, the whole purpose of raising the minimum wage was really aimed at this market of employees which is the non-skilled jobs. Well, now that they have cut hours but the business is open so what now. Wendys CIO David Trimm states they will be installing automated ordering kiosk into 16% of their stores by the end of 2017 and their machines would paid off in a two year time frame because of the savings by reducing wages. Wendys is not the only one going to the automated route. McDonalds is going the automated route also specifically in the New York and Seattle Markets.(buisinessinsider.com) Why those markets? Because they have some of the highest minimum wages in the nation. As long states continue to raise minimum wage, these low skilled jobs will be killed off. In a survey of 1,213 businesses and human resources professionals, 38% of employers who currently pay minimum wage said they would lay off some employees if the minimum wage was raised to $10.10.(https://minimum-wage.procon.org) Thats not even $11.00 an hour or an even higher wage as some think it should be. Taking an educated guess, that number woul d be pushing 50% at $11.00. If there is a company ten employees making minimum wage at $10.10, that is $404 a week. Going up to $11 would mean an additional $36 a week. Given that employee is full time and works a full forty hour work week. They would make an additional $1,872 a year for one employee. Now the company has ten employees, that is a humongous increase of nearly $19,000. Depending on the business, that could be the entire budget for the year. Now that company is having to layoff to afford to pay rent, utilities, and insurance on their building. For a small business paying ten high school kids $8.50/hr for 17 hours a week. That is $1,445 per week and $75,140 for the year. With the increase to $11/hr that yearly figure now goes up a whopping $22,100 for the year. The employer is going to cut hours and/or employees to get that cost back down to a manageable figure. Raising The Minimum Wage Is Bad - Free Essay Example Sample details Pages: 5 Words: 1571 Downloads: 4 Date added: 2019/04/16 Category Law Essay Level High school Topics: Minimum Wage Essay Did you like this example? In the state of Arkansas this past November on the voting ballot was the choice for citizens to vote for the raising of the minimum wage to $11.00/hr over the next three years. At first glance, someone might think that this is a very good change but when taking a deeper look into the subject, it will reveal a lot of consequences that will cause a lot of trouble over time. Cost of living is going to rise, businesses will be less likely to hire when needed, unemployment numbers will rise and simple things such as a hamburger at McDonalds will go up.. Don’t waste time! Our writers will create an original "Raising The Minimum Wage Is Bad" essay for you Create order Right now the minimum wage in the southern United States averages around $8.00/hr.(LaborLawCenter) This is the reason why housing is so much cheaper in the south than living in California where the minimum wage is $12.00 or New York where it is $11.00. Now imagine this, Arkansas having the same minimum wage as New York. There are four major entities that affect cost of living; housing, taxes, healthcare, food. The average rent for a 1,000 sq.ft. apartment is roughly $3500 where the same size apartment will run you around $800 in Arkansas (RentCafe.com). Housing cost 379% more in New York when compared to Arkansas. Health insurance rates will skyrocket as well. The average health insurance for Arkansas is right around $2800 (Valuepenguin.com) with New York coming in over double the price with at $6800.(Empirecenter.org) When businesses raise minimum wage, theyre also having to give raises to the employees who make more than minimum wage. Who wants to go to a four year school, spend thousands of dollars for classes and then come out making $15/hr for a nursing job when they could go flip burgers at the local burger joint for $11 and not be liable for someones life? When employees get raises, then the cost of goods rise as well affecting the overall cost of living. Along with cost of living going up, there will be a rise in the unemployment rate as well. It is really simple economics when it comes to this aspect of raising the minimum wage. Non-skilled labor jobs are easy to come by. An employer will pay X amount to this position. When the wage gets over that threshold, the employer will be less likely to hire for this position. What this equals is that position going away altogether instead of being paid a lower wage. Now that job along with the services it provided are gone. Economist Richard Vedder quotes If the price of something rises, people buy less of it including labor. Thus governmental interferences such as minimum-wage laws lower the quantity of labor demanded. What he is saying is basically clarifying what is written above. In February 2017, Wendys CEO Bob Wright states there is a 4% increase in wages across the board in his company. First, they could cut margins, but with an 8% margin, thats unlikely. The second option is to raise prices. Given how price-sensitive consumers are these days, that too is a non-starter. Finally, the firm could reduce the amount of labor they use and thats exactly what they did. Wendys eliminated 31 hours of labor per location, per week.(businessinsider.com) Now, the whole purpose of raising the minimum wage was really aimed at this market of employees which is the non-skilled jobs. Well, now that they have cut hours but the business is open so what now. Wendys CIO David Trimm states they will be installing automated ordering kiosk into 16% of their stores by the end of 2017 and their machines would paid off in a two year time frame because of the savings by reducing wages. Wendys is not the only one going to the automated route. McDonalds is going the automated route also specifically in the New York and Seattle Markets.(businessinsider.com) Why those markets? Because they have some of the highest minimum wages in the nation. As long as states continue to raise minimum wage, these low skilled jobs will be killed off. In a survey of 1,213 businesses and human resources professionals, 38% of employers who currently pay minimum wage said they would lay off some employees if the minimum wage was raised to $10.10.(https://minimum-wage.procon.org) Thats not even $11.00 an hour or an even higher wage as some think it should be. Taking an educated guess, that number would be pushing 50% at $11.00. If there is a company ten employees making minimum wage at $10.10, that is $404 a week. Going up to $11 would mean an additional $36 a week. Given that employee is full time and works a full forty hour work week. They would make an additional $1,872 a year for one employee. Now the company has ten employees, that is a humongous increase of nearly $19,000. Depending on the business, that could be the entire budget for the year. Now that company is having to layoff to afford to pay rent, utilities, and insurance on their building. For a small business paying ten high school kids $8.50/hr for 17 hours a week. That is $1,445 per week and $75,140 for the year. With the increase to $11/hr that yearly figure now goes up a whopping $22,100 for the year. The employer is going to cut hours and/or employees to get that cost back down to a manageable figure. Minimum wage jobs are aimed at students and young adults that are making money while furthering their education. 50.4% of all minimum wage jobs are held by kids and young adults aging from 16 24. Most employers are going to be less likely to hire a 16 year old high school student for $11/hr that they deem worthy of $8.50/hr. There is a catch phrase used commonly when talking about minimum wage and thats you cant raise a family on minimum wage Minimum wage was not designed to raise a family on. It was created in 1938 by President Roosevelt and was intended to deliver fairer labor standards throughout the country(historynewsnetwork.org) The unemployment rate for ages 16-19 is roughly 20%. Increasing the minimum wage is only going to make this number go up. A lot lower than other groups proving that a high minimum wage is causing employers to not hire unskilled workers. In 2009 when Chicago raised their minimum wage, there was a 9% spike in teenage unemployment in three months. According to a study by Thomas A. Mroz, PhD, and Timothy H. Savage, PhD, for the Employment Policies Institute, those experiencing unemployment at an early age have years of lower earnings and an increased likelihood of unemployment ahead of them. Teenagers and young adults need jobs at their age to teach them life values like going to work when you really do not want to. Getting along with co-workers when times are rough. The feeling of accomplishment of finishing a project or situation at a job. Without these, there would be a lot more unemployed teenagers which is only going to lead to higher crime rates and more unemployed adults. The last example of why a higher minimum wage is bad is the cost of goods will increase. Other than automation which was discussed earlier the establishment is going to pass the rising labor cost onto the consumer at a 100%. Higher wages in hotels are going to cause an increase in guest rooms and meeting rooms. A simple cup of coffee in Oakland, CA rose 10-20% when the rate was increased to $12.25. When the minimum wage was raised to $10 in Chicago, a cup of coffee jumped 6.7%(NBCNews.com). Hamburgers are either going to increase in price or the size of the patty is going to decrease to help offset the labor cost. In closing, there have been several examples discussed of why raising the minimum wage is not a great idea. It is not designed to live on nor provide a family. It will only make the poor poorer and not what the pushers are saying. It will push employers to either lay off workers or close up business completely. Teenagers are less likely to find work which will lead to higher dropout rates of school, higher crime rates and even more of a percentage of citizens unemployed and living in poverty followed by the skyrocketing of the cost of living in general. The minimum wage should be used as a floor of wages and not as something to live by. Work Cited 2019 Minimum Wage Rates by State. Labor Law Education Center: Learn About Labor Laws in Your State, www.laborlawcenter.com/state-minimum-wage-rates/. Little Rock, AR Rental Market Trends. Apartments for Rent RENTCaf, www.rentcafe.com/average-rent-market-trends/us/ar/little-rock/. Cost of Living Comparison: Compare Spokane, Washington to Rancho San Diego, California, www.bestplaces.net/cost-of-living/little-rock-ar/new-york-ny/81000. NY Health Insurance Costs Surge. Empire Center for Public Policy, www.empirecenter.org/publications/new-yorks-health-insurance-costs-surge/. Kwak, James. The Curse of Econ 101. The Atlantic, Atlantic Media Company, 14 Jan. 2017, www.theatlantic.com/business/archive/2017/01/economism-and-the-minimum-wage/513 155/. Research, Garret/Galland. Minimum Wage Hikes Are Causing Businesses to Cut Jobs. Business Insider, Business Insider, 16 Mar. 2017, www.businessinsider.com/minimum-wage-leads-to-job-losses-2017-3. Goddard, Alexander. Why Was the Minimum Wage First Established? History News Network, historynewsnetwork.org/article/164635. Flows, Capital. Lets Eliminate The Minimum Wage For Teenagers. Forbes, Forbes Magazine, 7 Apr. 2014, www.forbes.com/sites/realspin/2014/04/07/lets-eliminate-the-minimum-wage-for-teenag ers/#1a7ce3377255. The Long-Term Effects of Youth Unemployment. Employment Policies Institute, www.epionline.org/studies/r51/. Cost of Cup of Coffee Often Climbs After Minimum Wage Hikes. NBCNews.com, NBCUniversal News Group, www.nbcnews.com/business/consumer/cost-cup-coffee-climbs-after-minimum-wage-hik es-n394076.