The Funding of Social Knowledge Production and Application: A Survey of Federal Agencies (1978)

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

19 Independent Regulatory Agencies The Study Project surveyed nine agencies, commonly known as inde- pendent regulatory agencies, that totaled $15.7 million in social knowl- edge production and application obligations in fiscal 1977. Most of the research activities were conducted in-house and were economic in na- ture. The average independent regulatory agency obligated $1.7 million in social knowledge production and application. The survey found that the independent regulatory agencies are making wide use of economet- ric techniques in their day-to-day activities. Table 19-1 lists the nine independent regulatory agencies surveyed and their estimated fiscal 1977 obligations. (Another independent regulatory agency, the Federal Power Commission, was surveyed prior to its transferral to the De- partment of Energy; it is discussed in Chapter 7.) 405

Predominant Policy E '5 =6 £O 3 O < 1 J III. 5 •8 I 3 -S •=3ll £& H e« (£ a < O u « «C l gg il1e a ca j -2 i o g|* 18 s ff-2 § 8 1 '8 e f '5 So 'oS'oS'oS'oS'BS'S M CA 00 &0 '-' C '-' C o « o « o C T3 i— T3 i_ O. ^ O. ^ fS . £ -S «>*c3 o>*« «> -3 >U.^U.>U. S -S I -S £ 4j Q. ,«> o. .«> CL.U g, «1 «1 9 -S 'S 'O 'S a a a a f w 11 1 l& n uo u 3 .2 S . -g E J3 e ; S E = o e a o S e 3 •§ § U 406

Independent Regulatory Agencies 407 CIVIL AERONAUTICS BOARD Social Knowledge Production and Application Obligations (Sthousands) Knowledge Production Activities Knowledge Application Activities Policy Policy Formula- Program General Implemen- Develop- Fiscal Re- tion Dem- Evalu- Purpose tation Dem- ment of Dissem- Year search onstrations ation Statistics Total on st rations Materials ination Total TOTAL 1975 417 417 417 I9W 456 456 4J6 W7 4B 4S3 483 The Civil Aeronautics Board (CAB) promotes and regulates the civil air transport industry within the United States and between the United States and foreign countries. The CAB grants licenses to provide air transport services, approves or disapproves proposed rates and fares, and approves or disapproves proposed agreements and corporate rela- tionships involving air carriers. A major responsibility is regulating the economic aspects of domestic and international air carrier operations. Research The research activities of the CAB are performed intramurally by its Bureau of Economics. The bureau's research is primarily concerned with the economics of the air carrier industry. Although research is undertaken primarily in connection with the CAB'S regulatory func- tions, the research results are presented in recurring and special re- ports for use by other federal agencies, the air carrier industry, and the general public. A major responsibility of the bureau is obtaining basic financial, traffic, and operational data from air carriers, which are analyzed by bureau staff. Those figures provide the essential data base for staff analytical studies and for studies within and outside the CAB on the operation, financial conditions, and prospects of the air transport in- dustry. For Further Information Write Civil Aeronautics Board, 1825 Connecticut Avenue, N.W., Washington. D.C. 20428.

408 SURVEY OF FEDERAL AGENCIES CONSUMER PRODUCT SAFETY COMMISSION Social Knowledge Production and Application Obligations (Sthousands) Knowledge Production Activities Knowledge Application Activities Policy Policy Formula- Program General Implemen- Develop- Fiscal Re- tion Dem- Evalu- Purpose tation Dem- ment of Dissem- Year search on s (rations ation Statistics Total on st ranon s Materials ination Total TOTAL 1975 2.651 2.651 2.651 W6 2.1M 2.154 2.154 1977 I.K40 I.H40 1*40 The Consumer Product Safety Commission was established in 1972 as an independent regulatory agency for the purpose of reducing unrea- sonable risks of injury associated with consumer products. The com- mission's prime responsibility is establishing mandatory product safety standards. The commission also has the authority to ban hazardous consumer products. In addition, the commission is authorized to con- duct extensive research on consumer product standards, engage in broad consumer and industry information and education programs, and establish a Comprehensive Injury Information Clearinghouse. Research A major activity of the commission is the study of the incidence of injuries related to consumer products. These injuries are reported through the National Electronic Injury Surveillance Systems. The data are systematically analyzed in-house to evaluate the nature and relative importance of specific and generic hazards associated with consumer products. The commission funds a series of surveys concerned with consumer product safety. One survey, cosponsored by the National Bureau of Standards and the Bureau of the Census, sought to determine the na- ture, frequency, and severity of fires caused by household products and flammable fabrics. Another survey, cosponsored by the National Center for Health Statistics, sought to obtain data on the circumstances and products involved in accidental injuries. Another major research activity of the commission is the develop- ment of a model to collect data on the costs of injuries related to consumer products by population characteristics. The injury cost study model will enable the commission to estimate injury costs that specific population groups are expected to incur from the use of specific con- sumer products. A related activity—the accident cost study—was

Independent Regulatory Agencies 409 undertaken to develop economic methods for identifying causal factors and assessing the cost-effectiveness of proposed remedial approaches. For Further Information Write Consumer Product Safety Commission, 1111 Eighteenth Street, N.W., Washington, D.C. 20207. FEDERAL COMMUNICATIONS COMMISSION Social Knowledge Production and Application Obligations (Sthousands) Knowledge Production Activities Knowledge Application Activities Policy Policy Formula- Program General Implemen- Develop- Fiscal Re- tion Dem- Evalu- Purpose tation Dem- ment of Dissem- Year search onstrations ation Statistics Total onstrations Materials ination Total TOTAL l»75 461 461 461 OTtt 968 96K 968 1977 701 40 741 741 The Federal Communications Commission (FCC) is responsible for reg- ulating interstate and foreign communications. The scope of regulation includes radio and television broadcasting; telephone, telegraph, and cable television operations; two-way radio and other radio operations; and satellite communications. The FCC is responsible for the orderly development and operation of broadcast services and the provision of rapid, efficient, nationwide and worldwide telephone and telegraph services at reasonable rates. Research Economic research is performed in various bureaus of the FCC rather than in one central location. All the bureaus (the Broadcast Bureau, the Cable Television Bureau, the Common Carrier Bureau, and the Safety and Special Radio Services Bureau) were surveyed and their economic research ascertained. The primary objective of the FCC research activity is to improve the commission's capacity to resolve numerous complex issues and tech- nical problems involving all aspects of telecommunications. The com- mission contracts for extramural research when special skills and train- ing are needed to develop and analyze complex technical, economic, or

410 SURVEY OF FEDERAL AGENCIES sociological factors involved in FCC decision making. Examples of FCC social research include: o a study of the common carrier industry structure to develop a methodology for measuring the levels of economies of scale in different product lines; o an examination of the effect that new technologies (such as domes- tic satellites, cable television, and high resolution receivers) will have on the television industry during the next 10-15 years; o a study of financial models for urban cable TV systems to develop estimates of the demand and cost for cable television systems operating in large metropolitan markets; o an assessment of how telecommunications technology (i.e., tele- phone, television, radio, land and aeronautical mobile radio, cable television, and computers) can best be used to accomplish social goals; and o forecast of demand for international communications services. For Further Information Write Federal Communications Commission, 1919 M Street, N.W., Washington, D.C. 20554. FEDERAL HOME LOAN BANK BOARD Social Knowledge Production and Application Obligations (Sthousands) Knowledge Production Activities Knowledge Application Activities Policy Policy Formu la- Program General Implemen- Develop- Fiscal Re- tion Dem- Evalu- Purpose tation Dem- men t of Dissem- Year search onstrations ation Statistics Total onstrations Materials tnation Total TOTAL iro 663 M3 663 1976 IK 782 7s: 1977 K2SI 829 829 The Federal Home Loan Bank Board formulates policies for and supervises the operation of 12 regional Federal Home Loan Banks, the Federal Savings and Loan System, and the Federal Savings and Loan Insurance Corporation. It is responsible for the examination of all fed- eral savings and loan associations and for the examination and supervi- sion of all state-chartered institutions insured by the Federal Savings and Loan Insurance Corporation.

Independent Regulatory Agencies 411 Research Research is performed by the board's Office of Economic Research in support of its regulatory mission. The office has the following respon- sibilities: (1) The development and maintenance of a program in basic and applied research designed to increase the understanding of the savings and loan industry and the savings and mortgage markets in which it operates. (2) The development and maintenance of a statistical and econometric program designed to provide current information to the board and to make more current and effective research possible. Econometric and economic models are being designed for the analysis of savings flows, mortgage flows, and housing starts. Other models are being developed to analyze savings and loan behavior with regard to borrowing from the Federal Home Loan Bank systems and general management behavior. Simulations of savings and loan behavior are also being used to help the bank system understand the structure of the industry better and to help the savings and loan industry anticipate future needs. (3) Economic analyses and critiques of ongoing and pro- posed board policies, regulations, and legislation for board use. (4) Monitoring general economic and financial developments so as to pro- vide the board with adequate, updated knowledge of the economic environment necessary for the formulation and execution of policy. The office has prepared general economic reports basically concerned with the housing, savings, and mortgage markets. Papers have been prepared either by or for the Office of Economic Research on: simulated results of permitting savings and loan associa- tions to offer consumer credit and checking account services; the pric- ing and marketability of variable rate mortgages; the development of a savings and loan performance predictor system for associations; and an application of time series models and a regional analysis for forecasting short-term savings deposit flows. For Further Information See List of Research Working Papers (April 1976). a publication of the Office of Eco- nomic Research, or write Federal Home Loan Bank Board, 320 First Street, N.W., Washington, D.C. 20552.

412 SURVEY OF FEDERAL AGENCIES FEDERAL TRADE COMMISSION Social Knowledge Production and Application Obligations (Sthousands) Knowledge Production Activities Knowledge Application Activities Policy Policy Formula- Program General Implemen- Develop- Fiscal Re- tion Dem- Evalu- Purpose tation Dem- men t of Dissem- Year search onstrations ation Statistics Total on st rations Materials inaiion Total TOTAL 1975 1.564 19 1.583 1.583 1976 2.369 M 2.453 2.453 1977 2.217 908 3.125 3.125 The Federal Trade Commission (FTC), established to deal with trade practices on a continuing and corrective basis, is charged by law with ensuring that competition in the marketplace is vigorous, free, and fair. This is accomplished by eliminating threats to fair and honest competi- tion from all sources, both public and private. The goal of the agency is to protect the public and the consumer against competitive behavior and unfair and deceptive business practices. Research The FTC'S research activities are conducted by its Bureau of Econom- ics. The bureau conducts a far-ranging program of research on the economic functioning of the United States's industrial and commercial economy. The bureau's program of research includes studies of the structure, behavior, and performance of various major industries; work on the economics of price setting during periods of inflation and reces- sion; assessment of potential economic benefits to consumers from FTC activities; research on the economics of advertising and consumer in- formation. Other research topics are described below. ENERGY Economic analysis focuses on the structure, conduct, and performance of several energy industries and the consequences of the actions of those industries to the public. MARKET STRUCTURE STUDIES These studies deal with the relationship between market structure (buyer and seller concentration, degree of product differentiation, etc.) and performance (profitability, efficiency, progressiveness, etc.). The general objective of this research is to pro- vide a better understanding of the structural characteristics of industry that are associated with competitive problems.

Independent Regulatory Agencies 413 INDUSTRY STUDIES The goal of industry studies is to identify and analyze current or potential areas of market failure—industries whose performance is notably different—and to identify possible remedies. Program Evaluation A large increase in this activity was expected in fiscal 1977. The pro- gram evaluation activities of the FTC are conducted by the Office of Policy Planning and Evaluation. The office is now increasing its use of cost-benefit analyses as one major criterion in making resource alloca- tion decisions among various FTC programs. The office is also evaluat- ing the effectiveness of FTC programs. In addition, the office assesses the results and the effect of completed programs and cases in terms of their cost-effectiveness. For Further Information Write Federal Trade Commission, Pennsylvania Avenue at Sixth Street, N.W., Washington, D.C. 20580. INTERSTATE COMMERCE COMMISSION Social Knowledge Production and Application Obligations (Sthousands) Knowledge Production Activities Knowledge Application Activities Policy Policy Formula- Program General Implemen- Develop- Frscal Re- tion Dem- Evalu- Purpose tation Dem- ment of Dissem- Year search onstrations ation Statistics Total onstrations Materials ination Total TOTAL 1975 1.418 1.418 1.418 1976 1.991 1.991 1.991 1977 2.281 2,281 2.281 The Interstate Commerce Commission (icc) regulates the economic aspects of surface transportation in interstate and foreign commerce. Surface transportation under the jurisdiction of the icc includes rail- roads, trucking companies, bus lines, water carriers, oil pipelines, transportation brokers, and express agencies. While the regulatory laws vary with the type of transportation, icc responsibilities generally involve certification of carriers seeking to provide transportation for the public. In addition, the ice ensures that regulated carrier industries provide the public with rates and services that are fair and reasonable.

414 SURVEY OF FEDERAL AGENCIES Research Social research in the icc is conducted primarily in-house by the Bureau of Economics and the Office of Railroad Planning. The Bureau of Economics is responsible for providing the icc with economic in- formation and analyses. Research is conducted by various groups in the bureau. RAIL AND WATER CARRIER ANALYSES ThJS gTOUp prOVidCS the ICC WJth economic analysis pertaining to the rail and water carrier modes of transportation. MOTOR CARRIER AND PIPELINE ANALYSES This grOUp pTOVidCS the ICC with economic analysis on transportation and regulatory problems per- taining to motor carrier and pipeline modes of transportation. FINANCIAL AND PRICING ANALYSES This group conducts economic analysis and research pertaining to carrier pricing. Specific areas of research include cost, demand, carrier and shipping industry structure, and the effect of changes in rate structure. ECONOMIC PROJECTIONS AND FORECASTING This group provides the icc with analysis based on the design and development of econometric models and other quantitative methods. Research includes economet- ric studies, forecasts, and projections of the economy in general and the transportation industry in particular. The Office of Railroad Planning was created to conduct analyses and planning concerning rail services throughout the United States. Re- search activities include: o analyses of proposed mergers, acquisition, and other significant changes in the national rail system; o evaluation of the economic viability of lightly traveled rail lines; and o research concerning policies that are likely to result in a more competitive, energy-efficient, and coordinated transportation system. For Further Information Write Interstate Commerce Commission, Twelfth Street and Constitution Avenue. N.W., Washington, D.C. 20423.

Independent Regulatory Agencies 415 NUCLEAR REGULATORY COMMISSION Social Knowledge Production and Application Obligations (Sthousands) Knowledge Production Activities Knowledge Application Activities Policy Policy Formula- Program General Implemen- Develop- Fiscal Re- tion Dem- Evalu- Purpose tation Dem- men t of Dissem- Year search onstrations ation Statistics Total onstrations Materials ination Total TOTAL 1976 1.026 1.026 1.026 1977 1.455 1.455 1.455 The Nuclear Regulatory Commission (NRC), created in 1975, has the responsibility to license and regulate the use of nuclear energy to pro- tect the public. Its purpose is to ensure that civilian uses of nuclear materials and facilities are conducted in a manner consistent with pub- lic health and safety, environmental quality, national security, and an- titrust laws. The major share of the commission's effort is focused on the use of nuclear energy to generate electric power. The commission supports research deemed necessary for performing licensing and re- lated regulatory functions. Research NRC social research is conducted by the health and environmental branch and the safeguards branch. The health and environmental branch funds research concerning "socioeconomic and regional sys- tems analyses," which provide an information base for the NRC to take actions to ensure the health and welfare of people and the environment. Specific topics of social research are listed below. IMPACTS ON SOCIETY AND COST-BENEFIT ANALYSES TllJS research fo- cuses on the social effects of nuclear power plant siting. Projects have been funded on: o the secondary socioeconomic effects of plant siting; o a comparative assessment of socioeconomic effects ofnonconven- tional energy resources; o the quantification of community change associated with nuclear power development; and o the socioeconomic effect of regional perceptions of nuclear risk. REGIONAL ASSESSMENT AND SITE EVALUATION METHODOLOGIES This research focuses on the assessment of the effect of nuclear power sites on the environment and demography. Projects have been funded on:

416 SURVEY OF FEDERAL AGENCIES o an assessment of existing methods and procedures for regional siting and impact assessment; o a projection of population characteristics and power requirements on a regional basis; and o the development of a model for projecting probabilistic population distribution. The safeguards branch is concerned with the development of im- proved safeguards to ensure adequate nuclear materials and plant pro- tection. Behavioral research studies have been funded to analyze potential human threats to nuclear power plants. Research has also focused on societal risk analyses concerning safeguard design. For Further Information Write Nuclear Regulatory Commission, 1717 H Street, N.W., Washington. D.C. 20555. SECURITIES AND EXCHANGE COMMISSION Social Knowledge Production and Application Obligations (Sthousands) Knowledge Production Activities Knowledge Application Activities Policy Policy Formula- Program General Implemen- Develop- Fiscal Re- tion Dem- Evalu- Purpose tation Dem- ment of Dissenv Year search onstnitions ation Statistics Total onMrations Materials mat ion Total TOTAL 1975 346 346 346 1976 382 382 3D 1977 426 426 426 The Securities and Exchange Commission (SEC) regulates the issuance of securities and the securities market. It aims to provide the fullest possible disclosure to the investing public and protect the interest of the public and investors against malpractice in the securities and finan- cial markets. Research The research activities of the SEC are conducted by the Directorate of Planning and Economic Research, which has two offices. The Office of Policy Planning consists of a small staff with legal, economic, and financial backgrounds who have the responsibility for the overall coor- dination and development of SEC planning and policies. The Office of

Independent Regulatory Agencies 417 Economic Research is responsible for the compilation of statistical data and the conduct of research required to meet the overall needs of the commission. Five branches conduct research in the Office of Eco- nomic Research. BRANCH OF SECURITIES OFFERING AND STUDIES This branch JS TCSpOn- sible for conducting studies and preparing research reports related to the issuance of new corporate securities. BRANCH OF CAPITAL MARKET STUDIES This branch is responsible for conducting studies and preparing research reports related to corporate financial developments and their implication for disclosure practices by SEC registrants. Long-range studies are also conducted on capital mar- ket problems. BRANCH OF MARKET TRADING ACTIVITY This branch is responsible for conducting studies and preparing reports related to stock exchanges and other secondary markets in stocks. BRANCH OF SECURITIES INDUSTRY AND SEL F-REG U L ATOR Y ECONOMICS This branch is responsible for conducting studies related to the broker-dealer industry, self-regulatory organizations, investment com- panies, investment advisers, and other financial institutions. BRANCH OF INSTITUTIONAL HOLDINGS AND TRADING ThJS branch JS TC- sponsible for (1) preparing economic reports and statistical releases on the financial aspects of pension funds, stock trading, and holdings of financial institutions and (2) conducting surveys of mortgage lending activity or real estate investment trusts and mortgage companies. For Further Information Write Securities and Exchange Commission, 500 North Capitol Street, Washington. D.C. 20549.

418 SURVEY OF FEDERAL AGENCIES U.S. INTERNATIONAL TRADE COMMISSION Social Knowledge Production and Application Obligations (Sthousands) Knowledge Production Activities Knowledge Application Activities Policy Policy Formula- Program General Implemen- Develop- Rscal Re- tion Dem- Evalu- Purpose tation Dem- ment of Dissem- Year search onstrations ation Statistics Total onstrations Materials ination Total TOTAL 1975 1.708 1.708 754 754 2.462 1976 2.570 2.570 1.175 1.175 3.745 1977 3.229 3.229 1.323 1.323 4.552 The U.S. International Trade Commission furnishes studies, reports, and recommendations involving international trade and tariffs to the President, the Congress, and government agencies. The commission investigates and analyzes all aspects of international trade, focusing on the effect of imports on U.S. industries, firms, and workers. The com- mission also analyzes the conditions, causes, and effects of competi- tion between domestic and foreign industry. Research The research activities of the commission are conducted intramurally by the Office of Economics. The office conducts research across a broad spectrum of fields in international trade. The focus of much of the research is on factors affecting U.S. foreign trade and international trade in general, including governmental and economic factors affect- ing such trade. The office also studies the economic viability and com- parative strengths and weaknesses of all major segments of the U.S. industry to point out vulnerability to imports and identify export poten- tial. This research attempts to provide early warning signals and advice to the Congress and the President on international trade matters. Examples of commission research include a series of studies con- cerning the competitiveness of U.S. industries. These studies analyzed U.S. industries, foreign trade elasticities in 20 industries, and protec- tion policy in major trading countries. Another series of studies analyzed the history of U.S.-Canadian automotive agreements and their effects on U.S.-Canadian trade, employment, production, bal- ance of payments, capital flows, and investment patterns. Another major activity of the commission is the analysis of basic data on industrial performance in import, export, and domestic mar- kets, unemployment trends, the effect of technological change, and trends in foreign trade. Information is collected and analyzed on indi- vidual industries and the commodities produced by those industries.

Independent Regulatory Agencies 419 Dissemination The responsibilities of the commission to provide information and technical assistance to the President, the Congress, other federal agen- cies, industries, groups, and individuals indicate its major disseminat- ing role. The commission has a unique position as a repository of technical information and professional skills in the fields of tariffs, imports, and their effect on domestic industries. Commission staff pro- vide technical assistance to other federal agencies concerning trade agreement programs. For Further Information Write U.S. International Trade Commission, 701 E Street, N.W., Washington, D.C. 20436.