Friday, May 15, 2009

The Census Bureau and Nail Salons

The Census Bureau knows data.  

Over the years we've worked with the Census Bureau.  Everyone knows about the Decennial Census where they count everyone in the country.  For Census this the big show, the part of their mission that is in the Constitution.  But a lot of people don't realize what else they do.   The Census Bureau also does the Economic Census, the Census of Agriculture both of which are amazing feats of operational and logistical coordination, as well as about 450 other surveys.

We learned an important lesson about information and finding the real information from Census.  They have rules.  Rule Number 1:  Give us the data the way the respondent put it on the form.  Don't modify it, don't interpret it, don't manipulate it.  Just give us the data the way the respondent put it on the form.  None of this using the software to add up the columns of numbers or make decisions about the address based on the zip code.  We want the data the way that the respondent gave it to us.  It's important, the respondents tell us things. We need to pay attention to what they say.

This is a hard lesson for people in the software and analytics industry.  All those years spent years creating special purpose software techniques to correct problems with orders and forms and other documents out the window.  Add up the order, calculate the sales tax, add the shipping, check out.  That works for order processing, it doesn't work for the mathematicians and statisticians at the Census Bureau.  This is  good thing.

We learned why you don't want to translate or make assumptions on the data.  One of their best stories is about Nail Salons. 

During one of the Economic Censuses there were questions on the forms sent to businesses identified as beauty salons businesses with a designation for businesses who performed grooming related personal services.  Census asks a lot of questions.  And somewhere in the middle of the form they ask the respondent to break down their sales and revenue.  They provide some fields that have information on what one would expect for a beauty salon to help the respondent and then they include "OTHER".   

OTHER turned out to be very important.  Census's commitment to take the data that way the respondent provided it is very important when things are written into the "OTHER" section.  It turned out a lot of companies in this business sector were filling out the "OTHER" field with data.  This was an OUTLIER.  At Census, they live and die by outliers.  It's where they find the interesting new stuff.  Anyway, they found an outlier.

Close examination of the "OTHER" category and phone calls to the respondents revealed the emergence of a new business.  The "Nail Place".  Census has a more official name but they found the data that led them down the path of discovering that a new business emerged; a place that only did nails -- manicure, pedicure, french, silk wrap, acrylics -- nails.

It was interesting that they were able to confirm a reality.  The women of the world knew that there were nail salons.  But Census confirmed that what we thought was just a trend was a legitimate industry, creating jobs and providing services to the public.

Census found the trend by not letting the data be manipulated, by trusting their respondents.  Census trusted that the citizens answering their surveys were giving them good information about their businesses.  Census, in turn, recognized a new business and were able to provide us with insight about what was going on in the economy.

Next time you get one of those forms in the mail, you really should fill it out.  Census knows how to create information out of the data.  

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