Principles and Practices for a Federal Statistical Agency

THIRD EDITION

Committee on National Statistics

Margaret E. Martin, Miron L. Straf, and Constance F. Citro, Editors

Division of Behavioral and Social Sciences and Education

NATIONAL RESEARCH COUNCIL OF THE NATIONAL ACADEMIES

THE NATIONAL ACADEMIES PRESS
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Principles and Practices for a Federal Statistical Agency: Third Edition Principles and Practices for a Federal Statistical Agency THIRD EDITION Committee on National Statistics Margaret E. Martin, Miron L. Straf, and Constance F. Citro, Editors Division of Behavioral and Social Sciences and Education NATIONAL RESEARCH COUNCIL OF THE NATIONAL ACADEMIES THE NATIONAL ACADEMIES PRESS Washington, D.C. www.nap.edu

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Principles and Practices for a Federal Statistical Agency: Third Edition NATIONAL ACADEMIES PRESS 500 Fifth Street, N.W. Washington, D.C. 20001 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This study was supported by Contract/Grant No. SES-0112521 between the National Academy of Sciences and the National Science Foundation, which provides funding from a consortium of federal agencies. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the organizations or agencies that provided support for this project. International Standard Book Number 0-309-09599-9 (Book) International Standard Book Number 0-309-54895-0 (PDF) Additional copies of this report are available from the National Academies Press, 2101 Constitution Avenue, N.W., Lockbox 285, Washington, D.C. 20055 Call (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area) This report is also available online at http://www.nap.edu. Printed in the United States of America Copyright 2005 by the National Academy of Sciences. All rights reserved. Suggested citation: National Research Council (2005). Principles and Practices for a Federal Statistical Agency, Third Edition. Committee on National Statistics. Margaret E. Martin, Miron L. Straf, and Constance F. Citro, Editors. Division of Behavioral and Social Sciences and Education. Washington, DC: The National Academies Press.

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Principles and Practices for a Federal Statistical Agency: Third Edition THE NATIONAL ACADEMIES Advisers to the Nation on Science, Engineering, and Medicine The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Wm. A. Wulf is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. Wm. A. Wulf are chair and vice chair, respectively, of the National Research Council. www.national-academies.org

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Principles and Practices for a Federal Statistical Agency: Third Edition COMMITTEE ON NATIONAL STATISTICS 2004-2005 WILLIAM F. EDDY (Chair), Department of Statistics, Carnegie Mellon University KATHARINE ABRAHAM, Joint Program in Survey Methodology, University of Maryland ROBERT BELL, AT&T Research Laboratories, Florham Park, NJ LAWRENCE D. BROWN, Department of Statistics, Wharton School, University of Pennsylvania ROBERT M. GROVES, Survey Research Center, University of Michigan, and Joint Program in Survey Methodology, Ann Arbor JOHN HALTIWANGER, Department of Economics, University of Maryland PAUL W. HOLLAND, Educational Testing Service, Princeton, NJ JOEL L. HOROWITZ, Department of Economics, Northwestern University DOUGLAS MASSEY, Department of Sociology, Princeton University VIJAYAN NAIR, Department of Statistics and Department of Industrial and Operations Engineering, University of Michigan, Ann Arbor DARYL PREGIBON, Google, Inc., New York City KENNETH PREWITT, School of International and Public Affairs, Columbia University LOUISE RYAN, Department of Biostatistics, Harvard University NORA CATE SCHAEFFER, Department of Sociology, University of Wisconsin-Madison CONSTANCE F. CITRO, Director, Committee on National Statistics MARGARET E. MARTIN, Consultant MIRON L. STRAF, Deputy Director, Division of Behavioral and Social Sciences and Education

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Principles and Practices for a Federal Statistical Agency: Third Edition Acknowledgments The Committee on National Statistics thanks the many people who contributed their time and expertise to the preparation of this report. We are most appreciative of their cooperation and assistance. In expressing our gratitude to the staff, a special measure of recognition is due to Margaret Martin and Miron Straf, who were coeditors of the original edition of this report. In preparing the second edition and this third edition, they were joined as editors by Constance Citro. Earl Pollack and Christine Covington Chen assisted in preparing the third edition, which benefited from the editing of Eugenia Grohman. We also are indebted to many others who offered valuable comments and suggestions. This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the Report Review Committee of the National Research Council (NRC). The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their review of this report: Joel Greenhouse, Department of Statistics, Carnegie Mellon University; Jay E. Hakes, Director’s Office, Jimmy Carter Library, Atlanta, GA; Daniel

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Principles and Practices for a Federal Statistical Agency: Third Edition Kasprzyk, Surveys and Information Services Division, Mathematica Policy Research, Inc., Washington, DC; and Janet Norwood, consultant, Chevy Chase, MD. Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations nor did they see the final draft of the report before its release. The review of this report was overseen by John C. Bailar III, Department of Health Studies (emeritus), University of Chicago. Appointed by the NRC’s Report Review Committee, he was responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution. Finally, we recognize the many federal agencies that support the Committee on National Statistics directly and through a grant from the National Science Foundation. Without their support and their commitment to improving the national statistical system, the committee work that is the basis of this report would not have been possible. William F. Eddy, Chair Committee on National Statistics

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Principles and Practices for a Federal Statistical Agency: Third Edition Contents Preface to the Third Edition   xi Preface to the Second Edition   xiii Preface to the First Edition   xv Part I:   Principles and Practices for a Federal Statistical Agency   1 Part II:   Commentary   13 References   49 Appendices     A   Fundamental Principles of Official Statistics of the United Nations Statistical Commission   59 B   Relevant Legislation and Guidelines Adopted Since 2001   62 C   Selected Federal Statistical World Wide Web Sites, January 2005   67

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Principles and Practices for a Federal Statistical Agency: Third Edition Preface to the Third Edition The Committee on National Statistics (CNSTAT) last revised its white paper on principles and practices for a federal statistical agency in 2001. First issued in 1992 on the committee’s 20th anniversary, the white paper presents and comments on three basic principles for statistical agencies to carry out their mission effectively: relevance to policy issues, credibility among data users, and trust among data providers. The paper also discusses 11 important practices, including a strong measure of independence, a commitment to quality and professional practice, and an active program of methodological and substantive research. The CNSTAT report has been widely cited and used by Congress and federal agencies. It has shaped legislation and executive actions to establish and evaluate statistical agencies, and agencies have used it to inform newly appointed department officials, advisory committees, and others about what constitutes an effective and credible statistical organization. This third edition retains the outline and content of the second edition. The changes and additions reflect new circumstances, such as new forms of threats to data confidentiality and individual privacy. This third edition also adds an appendix that documents legislation and regulations adopted since 2001 that importantly affect the operation of federal statistical agencies. The principles and practices for a federal statistical agency articulated here remain guidelines, not prescriptions. We intend them to assist

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Principles and Practices for a Federal Statistical Agency: Third Edition statistical agencies and to inform policy makers, data users, and others about the characteristics of statistical agencies that enable them to serve the public good. William F. Eddy, Chair Committee on National Statistics, 2005

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Principles and Practices for a Federal Statistical Agency: Third Edition Preface to the Second Edition In 1992 the Committee on National Statistics (CNSTAT) issued a white paper on principles and practices for a federal statistical agency. The paper responded to requests from Congress and others for advice on what constitutes an effective statistical agency. It identified and commented on three basic principles: relevance to policy issues, credibility among data users, and trust among data providers. It also discussed 11 important practices, including a strong measure of independence and commitment to quality and professional practice (National Research Council, 1992). The CNSTAT report has been used by federal statistical agencies to inform department officials, advisory committees, and others. It has also been used in a congressionally mandated study by the U.S. General Accounting Office (1995) to evaluate the performance of major statistical agencies and in a review of the federal statistical system by a former commissioner of the Bureau of Labor Statistics (Norwood, 1995). Its principles informed the establishment and later assessment of a new statistical agency, the Bureau of Transportation Statistics (see National Research Council, 1997b). Eight years have passed since the white paper was first issued, and the committee decided that it would be useful to release a revised and updated version at this time. This second edition does not change the basic principles for federal statistical agencies, because the committee believes these principles are and will continue to be important guides for effective practice. The second edition does revise and expand the discussion of some of

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Principles and Practices for a Federal Statistical Agency: Third Edition the practices that characterize an effective federal statistical agency and brings the discussion up to date with references to recent reports by the committee and others. Driving the revisions is our recognition of the need for statistical agencies to keep up to date and to meet the challenges for their missions that are posed by such technological, social, and economic changes as the widespread use of the Internet for the dissemination and, increasingly, the collection of data, the heightened concern about safeguards for confidential information, and the information requirements of a changing economy. New and revised text addresses the reasons for establishing a federal statistical agency, the necessity for and characteristics of independence of a federal statistical agency, the need for continual development of more useful data, for example, by integrating data from multiple sources, practices for fair treatment of data providers, the role of the Internet in the release of data, and the need for effective coordination and cooperation among statistical agencies to ensure that policy makers and citizens receive data that are accurate, relevant, and timely for their needs. We stress that the principles and practices for a federal statistical agency articulated here are guidelines, not prescriptions. We intend them to be helpful not only to the agencies, from whose experience we benefited in preparing this revised edition, but also to inform others of the characteristics of effective statistical agencies that can serve policy makers in the executive and legislative branches, other data users, and the public well. John E. Rolph, Chair Committee on National Statistics, 2001

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Principles and Practices for a Federal Statistical Agency: Third Edition Preface to the First Edition From time to time the Committee on National Statistics (CNSTAT) is asked for advice on what constitutes an effective federal statistical agency. For example, congressional staff raised the question as they were formulating legislation for a Bureau of Environmental Statistics, and the Secretary of the U.S. Department of Transportation asked CNSTAT for advice on establishing a new Bureau of Transportation Statistics, called for in the Intermodal Surface Transportation Efficiency Act of 1991. The National Research Council’s Transportation Research Board had earlier turned to CNSTAT for information on common elements of the organization and responsibilities of federal statistical agencies for its study on strategic transportation data needs. Of interest in all of these requests are the fundamental characteristics that define a statistical agency and its operation. Statistical agencies sometimes face situations that tax acceptable standards for professional behavior. Examples occur when policy makers, regulators, or enforcement officials seek access to data on individual respondents from a statistics agency or when policy interpretations are added to press releases announcing statistical data. Because the federal statistical system is highly decentralized, statistical agencies must operate under the policies and guidance of officials in many departments of government. Not all of these officials are knowledgeable about what is generally accepted as proper for a federal statistical agency, and issues involving judgments about conflicting objectives also arise. In response to these situations, CNSTAT has prepared this “white pa-

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Principles and Practices for a Federal Statistical Agency: Third Edition per” on principles and practices for a federal statistical agency. This paper brings together conclusions and recommendations made in many CNSTAT reports on specific agencies, programs, and topics, and it includes a discussion of what is meant by independence of a federal statistical agency and of the roles of research and analysis in a statistical agency. The commentary section contains supplementary information to further explain or illustrate the principles and practices. In preparing this paper, CNSTAT and its staff solicited suggestions from many involved with federal statistical agencies. A draft of the paper was discussed by the heads of some federal statistical agencies at an open meeting of CNSTAT, and a draft was also discussed at a meeting of the Council of Professional Associations on Federal Statistics. The committee is grateful for the many suggestions and comments it received. When the report is published, CNSTAT plans to seek an even wider discussion of it at meetings of professional societies and to encourage reviews and commentaries. We hope that, in this way, the paper may evolve further and possibly influence legislation, regulations, and standards affecting federal statistical agencies. As we were completing our work on this report, the Conference of European Statisticians drafted a resolution on the fundamental principles of official statistics in the region of the Economic Commission for Europe (ECE). Although the two documents were done independently, there is a large amount of agreement between them. We note particularly the emphasis the ECE resolution places on the need for independence for official statistics agencies (United Nations Statistical Commission and Economic Commission for Europe, 1991).1 Although focused on federal statistical agencies, many of the principles and practices presented here also apply to statistical activities elsewhere, particularly to those in state and local government agencies and other statistical organizations. In addition, this paper and the ECE resolution may be useful to emerging democracies that seek to establish statistical organizations in their governments. The principles and practices articulated here are statements of best 1   The ECE resolution was later adopted by the Statistical Commission of the United Nations (United Nations Statistical Commission, 1994).

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Principles and Practices for a Federal Statistical Agency: Third Edition practice rather than legal or scientific rules. They are based on experience rather than law or experiment. Some of them may need to be changed as laws change, society changes, or the practice of statistics changes. They are thus intended as guidelines, not prescriptions. Burton H. Singer, Chair Committee on National Statistics, 1992

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