ECONOMIC ANALYSIS: Data thin on rural areas, and likely to get worse

September 26, 2005

There was a time in this country when cities had electricity and the countryside did not.

This side-by-side existence of two lifestyles-one filled with leisure and convenience, another with endless drudgery and work-ultimately shamed the federal government to subsidize rural electrification and turn lights on in the country that had been burning in cities for several decades.

That same situation exists today for broadband Internet, and its implications for economic development have already motivated many communities to pursue plans to promote, if not subsidize, infrastructure improvements to give their citizens what those in urban areas have been enjoying for years.

But there's another aspect of living outside the state's most urbanized areas that is less well known, but has important economic implications. It is that the data on economies in the country is poorer than that for the cities.

When it comes to knowing how the economy is performing, what industries are growing and which are shrinking, or even how many people have jobs, the data for the states' 51 non-metropolitan area counties are frustratingly incomplete and out of date.

That's not a slam on the hard-working folks at the various Indiana agencies who compile and report what we have. Indeed, the situation here is virtually the same as every other state in the country. That reflects the fact that most of the datagathering for the states and regions is funded by the federal government, even if it is reported by state agencies.

That's not a bad thing, since federal standards assure the quality and consistency of what is reported. But for a less urbanized state like Indiana, it has perpetuated a situation where, for many of the most important economic indicators, we don't even keep score in more than half the state.

What is even more frustrating is that the situation may soon be getting worse. The granddaddy of all data series, the decennial Census, has always been an equal-opportunity gatherer of information.

The so-called long-form Census, distributed to one out of every five American households every 10 years, gives just as much information about the economy of Elwood as it does about Indianapolis. In fact, households in sparsely populated areas are sampled with the more detailed long form more intensely than their urban counterparts, so statistically valid statements can be made.

But the long form is almost certainly coming to an end. Apparently, the American public, led by a few short-sighted politicians, view its questions as an invasion of their privacy.

Despite the Census Bureau's spotless record of protecting information on individuals, we heard legislators on the floor of Congress during the 2000 Census advise their constituents not to return the form.

Yet the instrument that will take its place-the American Community Survey, which is already under way-is a poor substitute for all but the most urban communities. As communities around Indiana will discover to their chagrin in the coming years, the ACS will simply not provide what they've become accustomed to receiving every 10 years-information on housing, income, employment and education of their citizens.

The fight for the long form is probably already lost, sadly. But the need for information on economic activity-which many of us take for granted-has not diminished. We should remind our political representatives of that fact from time to time.

In the meantime, there may be other avenues to explore. Certainly, initiatives already under way in the state of Indiana, to more fully exploit the informational value of the everyday functioning of state agencies, holds promise. But for now the bright lights of data on economic activity are still leaving some parts of the state in the dark.

Barkey is an economist and director of economic and policy study at the College of Business, Ball State University. His column appears weekly. He can be reached by e-mail at pbarkey@ibj.com.
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