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96 APPENDIX D Glossary Aggregation, aggregated: Refers to the practice of combining smaller CWC: Concrete Works of Colorado, Inc. groups into larger groups. In the present context this term is typically used in reference to the presentation of utilization, availability, or Constitutional Significance or Substantive Significance: Refers to a related statistics according to industry. For example, statistics pre- case where a disparity is "large." Under the EEOC's four-fifths rule, sented for the "Construction" sector as a whole are more aggregated a disparity is large if it is 0.8 or less. For example, if DBE utilization than separate statistics for "Building Construction," "Heavy Con- in a given industry category is 8% and corresponding DBE availabil- struction," and "Special Trades Construction" industries. See also ity is 10%, the resulting disparity ratio would be considered consti- "Disaggregation, disaggregated." tutionally or substantively significant. ADOT: Arizona Department of Transportation. Crosswalk table: A table that links Standard Industrial Classification (SIC) codes to their corresponding North American Industrial Clas- Alaska DOT&PF: Alaska Department of Transportation & Public sification System (NAICS) codes and vice-versa. Facilities. DBE: Disadvantaged Business Enterprise. ALDOT: Alabama Department of Transportation. De novo: "Anew." A de novo review is a completely new review of evi- Anecdotal evidence: Qualitative data regarding business owners' dence held in a higher or appellate court as if the original trial court's accounts of experiences with disparate treatment and other barriers review had never taken place. to business success. Decennial: Refers to the census conducted every decade by the U.S. Baseline Business Population: The underlying universe of business Census Bureau. The last decennial census was conducted in 2000. establishments used in an availability analysis. The denominator in a The next will be conducted in 2010. DBE availability measure. Demand-side: Refers to activity on the demand-side of an economic But-for: A term that refers to a hypothetical market that is unaffected market. For example, when state DOT's conduct bid-lettings and hire by the presence of business discrimination. Often used to describe contractors, they are creating market demand. See also "Supply-side." what level of DBE availability would be expected to be observed in a perfectly race-neutral marketplace. Dependent variable: In a regression analysis, a variable whose value is postulated to be influenced by one or more other "independent" Caltrans: California Department of Transportation. or "exogenous" or "explanatory" variables. For example, in business owner earnings regressions, business owner earnings is the dependent Capacity: This term has no single definition. See Appendix B for variable, and other variables, such as industry, geographic location, discussion. or age are the explanatory variables. See also "Independent variable," "Exogenous variable." CBP: The U.S. Census Bureau's County Business Patterns statistical data series. Additional information about the CBP is available from the Disaggregation, disaggregated: Refers to the practice of splitting larger Census Bureau Web site: http://www.census.gov/epcd/cbp/view/ groups into smaller groups. In the present context this term is typi- cbpview.html. cally used in reference to the presentation of utilization, availability, or related statistics according to industry. For example, statistics pre- CCD: (Colorado) Center for Community Development. sented for "Building Construction," "Heavy Construction," and "Spe- cial Trades Construction" industries are more disaggregated than CDOT: Colorado Department of Transportation. statistics for the "Construction" sector as a whole.

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97 Disparate impact: A synonym for "disparity," often used in the em- MDOT: Maryland Department of Transportation. ployment discrimination litigation context. A disparate impact oc- curs when a "good" outcome for a given group occurs significantly MDT: Montana Department of Transportation. less often than expected given that group's relative size, or when a "bad" outcome occurs significantly more often than expected. Median: A term of art in statistics, meaning the middle value of a series of numbers. For example, the median value of the series 1, 1, 2, 2, 2, DOD: Department of Defense. 4, 5 is 2. Econometrics, econometrically: Econometrics is the field of econom- Microdata or micro-level data: Quantitative data rendered at the level ics that concerns itself with the application of statistical inference to of the individual person or business, as opposed to data rendered for the empirical measurement of relationships postulated by economic groups or aggregates of individuals or businesses. For example, Dun & theory. See also "Regression." Bradstreet provides micro-level data on business establishments. The Census Bureau's Survey of Business Owners (SBO) provides grouped or Endogenous variable: A variable that is correlated with the residual in aggregated data on businesses. a regression analysis or equation. Endogenous variables should not be used in statistical tests for the presence of disparities. See also Misclassification: In the present context, this term refers to a situation "Exogenous variable." when a listing or directory of minority-owned or women-owned firms has incorrectly classified a firm's race or gender status. For example, Exogenous variable: A variable that is uncorrelated with the residual when a firm listed as Hispanic owned is actually African American in a regression analysis or equation. Exogenous variables are appro- owned, or when a firm listed as white female-owned is actually white priate for use in statistical tests for the presence of disparities. See male owned. See also "Nonclassification." also "Endogenous variable," "Independent variable," "Dependent variable." Mn/DOT: Minnesota Department of Transportation. FDOT: Florida Department of Transportation. MoDOT: Missouri Department of Transportation. FFY: Federal Fiscal Year. The Federal Fiscal Year runs from October 1 MSA: Metropolitan Statistical Area. As defined by the federal Office of through September 30. Management and Budget, an urban area that meets specified size cri- teria: either it has a core city of at least 50,000 inhabitants within its First-tier subcontractors: Subcontractors or suppliers hired directly by corporate limits, or it contains an urbanized area of at least 50,000 the prime contractor. inhabitants and has a total population of at least 100,000. GDOT: Georgia Department of Transportation. M/WDBE: Minority- and Women-Owned Disadvantaged Business Enterprise. HDOT: Hawaii Department of Transportation. NAICS: North American Industry Classification System. The standard IDOT: Illinois Department of Transportation. system for classifying industry-based data in the U.S. NAICS super- seded the Standard Industrial Classification (SIC) System in 1997. Independent variable: In a regression analysis, one or more variables that See also "SIC." are postulated to influence or explain the value of another, "depen- dent" variable. For example, in business owner earnings regressions, NCDOT: North Carolina Department of Transportation. business owner earnings is the dependent variable, and other variables, such as industry, geographic location, or age are the independent NDDOT: North Dakota Department of Transportation or explanatory variables. See also "Dependent variable," "Exogenous variable." NDOR: Nebraska Department of Roads. ITD: Idaho Transportation Department. NDOT: Nevada Department of Transportation. MBE: Minority-Owned Business Enterprise. A business establishment NIGP: National Institute of Government Purchasing. that is 51% or more owned and controlled by racial or ethnic minori- ties (i.e., African Americans, Hispanics, Asians or Pacific Islanders, NMDOT: New Mexico Department of Transportation. American Indians, or Alaska Natives). Nonclassification: In the present context, this term refers to a type of Mean: A term of art in statistics, synonymous in this context with the misclassification when a listing or directory has not identified firms arithmetic average. For example, the mean value of the series 1, 1, 2, as minority owned or women owned when, in fact, they are. See 2, 2, 4, 5 is 2.43. This is derived by calculating the sum of all the val- "Misclassification." ues in the series (i.e., 17) and dividing that sum by the number of elements in the series (i.e., 7). Nonresponse bias: See "Response bias."

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98 NSSBF: National Survey of Small Business Finances. among a given subset of contractors, for example minority-owned and women-owned contractors. ODOT: Oregon Department of Transportation. SIC: Standard Industrial Classification System. Prior to 1997, the stan- One-sided statistical test, two-sided statistical test: A "two-sided" test dard system for classifying industry-based data in the U.S. SIC was means that one is testing the hypothesis that two values, say u (utiliza- superseded by the North American Industry Classification System tion) and a (availability), are equal against the alternate hypothesis (NAICS). See also "NAICS." that u is not equal to a. In contrast, a one-sided test means that you are testing the hypothesis that u and a are equal against the alternate Statistical significance: A statistical outcome or result that is unlikely hypothesis u is not equal to a in only one direction. That is, that it is to have occurred as the result of random chance alone. The greater either larger than a or smaller than a. the statistical significance, the smaller the probability that it resulted from random chance alone. See also "p-value." OSDBU: Office of Small and Disadvantaged Business Utilization. Stratified: In the present context, this refers to a statistical practice PUMS: Public Use Microdata Samples. where random samples are drawn within different categories or "strata," such as time period, industry sector, or DBE status. p-value: A standard measure used to represent the level of statistical significance. It states the numerical probability that the stated rela- Substantive significance or constitutional significance: An indication tionship is due to chance alone. For example, a p-value of 0.05 or 5% of the how large or small a given disparity is. Under the EEOC's indicates that the chance a given statistical difference is due purely "four-fifths" rule, a disparity ratio is substantively significant if it is to chance is 1-in-20. See also "Statistical Significance." 0.8 or less on a scale of 0 to 1. Regression, multiple regression, multivariate regression: A type of Supply-side: Refers to activity on the supply-side of an economic mar- statistical analysis that examines the correlation between two vari- ket. For example, when new businesses are formed, other things ables ("regression") or three or more variables ("multiple regres- equal, the supply of contractors to the market is increased. See also sion" or "multivariate regression") in a mathematical model by "Demand-side." determining the line of best fit through a series of data points. Econometric research typically employs regression analysis. See TEA-21: Transportation Equity Act for the 21st Century (1998). also "Econometrics." TDOT: Tennessee Department of Transportation. Residual: The difference between an observed value and a value predicted by a regression. A positive residual occurs where the observed value t-test, t-statistic, t-distribution: Often employed in disparity studies to exceeds the value computed by the regression; a negative residual is the determine the statistical significance of a particular disparity statistic. opposite. A t-test is a statistical hypothesis test based on a test statistic whose sampling distribution is a t-distribution. Various t-tests, strictly speak- Response bias: Response bias can occur in survey research when the ing, are aimed at testing hypotheses about populations with normal survey answers provided by respondents differ in important ways probability distributions. However, statistical research has shown from the answers that would have been provided by those who did that t-tests often provide quite adequate results for nonnormally dis- not respond to the survey. In survey research for disparity or avail- tributed populations as well. ability studies, response bias can be tested by eliciting additional information from nonrespondents through supplemental survey Two-sided statistical test, One-sided statistical test: A "two-sided" test methods. means that one is testing the hypothesis that two values, say u (utiliza- tion) and a (availability), are equal against the alternate hypothesis RFP: Request for Proposal. that u is not equal to a. In contrast, a one-sided test means that you are testing the hypothesis that u and a are equal against the alternate SBO: The U.S. Census Bureau's Survey of Business Owners statistical data hypothesis u is not equal to a in only one direction. That is, that it is series. Part of the 5-year Economic Census series. Additional informa- either larger than a or smaller than a. tion about the SBO is available from the Census Bureau Web site: http://www.census.gov/csd/sbo. TxDOT: Texas Department of Transportation. SCDOT: South Carolina Department of Transportation. VDOT: Virginia Department of Transportation. SDB: Small Disadvantaged Business. WBE: Women-Owned Business Enterprise: A business establishment that is 51% or more owned and controlled by women. Set-aside, set-asides: A contracting practice where certain contracts or classes of contracts are reserved for competitive bidding exclusively WSDOT: Washington State Department of Transportation.