A Census ad on a Metro bus, socialist calculation debate edition

Chug relates to me that he saw the following, plastered on the side of a Metro bus:

If we don't know how many people there are
How will we know how many buses we need?

If you have a photo, please send it along.

Comments

I saw the equivalent ad last night on television... "Without the census, how will we know how many hospital beds we need?"

Someone else reports the use of hospitals on the sign...

Actually, it WAS hospitals... http://www.youtube.com/watch?v=boiixMjbsQU&feature=related

I'm sorry, but I am failing to see the problem with this ad? Could someone explain it to me.

Sajad: the number of buses available should be in proportion to the number of people interested in riding said buses, not the number of people overall. For schools, the census makes a lot more sense, assuming that the government will have to provide exactly one place per pupil.

For hospitals, well, I'm not going to go there, given the Obamacare discussions...

Rather the "pitiful" thought came mostly following the withering barrage of "help us make sure we get all the funding we deserve."

Billboards in Baltimore said how will we know how many schools we need? In classic Baltimore fashion, the billboard was in an abandoned lot facing a row of abandoned homes.

Well, if Joe won't go there, I certainly will. In most states you can't simply open a hospital or any other medical facility and compete with existing offerings. You have to obtain a "Certificate of Need" issued by the state or US government. These are granted based in part on population, as determined by the census.

The problem with this scheme is that if the existing facilities offer poor quality or high prices, alternative providers are barred from opening up competing facilities. We don't use the census to determine how many grocery stores we need, and we are all better off for it. Medical facilities should work the same way.

What's wrong with these ads? If you are deciding where to run bus routes, or build a school or hospital, it helps to know how many people are in a given area. Is that really so mysterious?

"The reason the socialists won the calculation debate..."

Which alternate universe do you live in?

I can't imagine that you're writing from Cuba or North Korea, because if that were the case you wouldn't be taking part in this internet discussion.

I've seen the same ads on CTA buses in Chicago as well.

Aren't all these arguments for filling out the Census also arguments for _lying_ on the Census? If everyone claims an extra person lives at home in a particular area (but _not_ elsewhere), that area will get larger handouts. There's supposed to be a $500 fine, but it strikes me as completely unenforceable. Indeed, a online FAQ ( http://www.abcactionnews.com/content/news/local/story/Ignoring-Census-form-lying-can-cost-you-hundreds/hZbYK9ChNkCUl_6QqhgJ3A.cspx ) on the topic says that NO ONE was fined in 2000, yet surely MANY people lied.

Just to be clear: my point is make fun of the ad, not to encourage rent seeking. And I also realize that the benefit of lying on a Census form is very small.

Oh come on. This is just plain marketing, trying to sell people on filling out census forms by implying that they will receive benefits (a larger relative slice of the government pie) for doing so.

This is only needed because "If we don't know how many people there are, how will we know how to redraw congressional districts and allocate electoral college votes?" is not a compelling motivator for most Americans. I wish it was. But it's not.

Of course people use the data that is free to them and already paid for. No matter how valueless and poor the data may be, once the cost has been shoved onto others, free is free.

"This is just plain marketing"
I thought not lying was one of the things government had over market(er)s?

@Andrew: You're not serious about that, I hope. If you are, let me assure you that the federal government has thousands of marketing professionals (employees and contractors) who approach their jobs much the same way that private sector marketing professionals do, although perhaps with less speed and less risk-taking.

The census is trying to effectively collect data. That data can be useful for many ends, including research people who read this site do. Is that equivalent to doing socialist planning??? You guys are too absorbed in your own littler stories.

I think the census is rather hamstrung by the rules it has to follow, it has to count everyone, and ignore people who refuse to cooperate which inflates it costs and limits its accuracy. I suppose the reason for this is that the political factions don't trust each other with anything more sophisticated than a simple head count.

I mean this is all rather obvious. You determine how many buses you need in the exact same way that Apple determines how many iPads it should make... you know... by conducting an exacting census of every man, woman, and child in the united states.

Or...

"If we don't know how many people there are
How will we know how many buses we need?"

This was just a left over poster they found at the Department of Homeland Security they found when cleaning out Total Information Awareness cubicle.

I guess this explains DC's gross mis-estimation of the number of buses they need--it's because they rely on decennial headcounts, rather than taking a passing glance at occupancy information. You don't need a degree in stats or econ to know that many rush hour commuter routes are underserved. Just look at 16th st. NW (S1, S2, S4, S9 routes) at 8:30 on a weekday. The buses are often maxed out before they even get as far south as Euclid, leaving hundreds of commuters out of luck 2+ miles from work; or, if they're lucky, battling a crowd for a single spot opened when someone inexplicably gets off at T st. NW. If the city can't afford more buses, we could tap some of that excess demand by having a floating fare, like on the planned HOT lanes. If one Monday a bus at a particular time has to turn away riders due to overcapacity, increase the fare next week, until the shortage is resolved.

In Soviet Russia they had 5 year plans. In America it takes 10 years. Great socialist calculation!

It's very simple. Say the government needs to know how many pairs of socks the nation needs. That number is given by a simple formula S = s * N, where s is the number of pairs of socks per person and N is the number of people. Now economists can figure out s for you, that's what they do, but they cannot tell you N, we need the census for that. The good news is that once you know N, to find out how many tires the nation needs becomes very simple: T = t * N. And so on. Then it's just a matter of figuring out which factory to produce how much of what good, a trivial problem. But we first need the N, people.

Another economics angle is the hidden subsidy to transit agencies by all this advertising from other arms of government.

So they're using somewhat misrepresentative messages (What? *Advertising?*) to up their response rates, which reduces the number of people they need to deploy, which saves money.

Big deal.

Steve Roth, you know advertising costs money, right?

You're chasing the wrong target Tyler. An efficient free market needs to be well-informed. Sometimes the best supplier of basic information (like the census) is the government. The bus company, and millions of other businesses, can use the census data to help target their products and services more effectively.

If the government didn't provide, private companies such as Nielsen-Claritas would step into the gap. They would charge for use of the data, fewer people would see it, and we would have a less well-informed population. That's bad for both business and democracy.

Besides, if the government didn't provide free information on demographics, economic growth, or unemployment statistics, then all you econ-bloggers would be out of a job :)

if we didn't know how many buses there were, how would we know how many census ads to take out?

Calm down people.

1) Conducting market research to guide financing decisions isn't exactly some socialist plot - it's done by every single business in the world. For buses, the relevant market sizing analysis is probably something like "people below a certain income who commute to work, by zip code". This is totally reasonable to gather using census data, and is as a matter of fact almost exactly how a private marketing department at a business would go about it. Sometimes economists need to spend more time looking at capitalism-in-practice and less thinking about Hayek.

2) Public transportation has well-known (A) positive externalities and (B) path dependencies. In other words, it's exactly the kind of thing about which the pricing mechanism might transmit incomplete information. Consequently, it's exactly the kind of thing about which smart, informed policy makers may want other data than just a demand curve. I bet if I put you in charge of maximizing the efficiency of busing, one of the first things you'd ask is "how many people who might use the bus live in each neighborhood, and where do they want to go?"

Wow. Somebody needs to send them some information about supply and demand curves. Maybe the collected works of Mises and Hayek.

Hmmm.

Some of the arguments made above would also support the proposition that companies are wasting money by conducting market research to determine the size of a potential market.

They should just let the market tell them how much demand there is for a product.

Don't think this is the way private enterprise does this.

Think of it this way: there is a market for public goods; public goods providers need to determine the size of the market to plan for production.

Maybe if you think of it this way you will not have your shorts tied up in reacting to census advertisements.

In New Haven, CT, I'm looking at a poster "If we don't know how many people there are, how will we know how many classrooms we need?"

I'll probably get flamed, but FWIW it seems there's alot of positive spillover effects from the census data. At my company it's excellent for understanding markets, where the growth is, our percentage of the marketplace, and where to target spending. Maybe private company's can collect and report the data more cheaply, but the census along with other data collected/reported seems to work pretty well to understand the marketplace for the work I do.

Shane M, you're supposed to just use price discovery to make strategic decisions. :-)

I think we should wait until lots of people just start making their own dirt track roads before we pave the road. Or maybe someone will start charging for right of way and we can determine the demand for a new road by how much they collect.

Sometimes when I read this blog, I wonder why people don't just stop and apply the same logic they are using in the comment to a few other situations and see how it works in a slightly more general sense.

"Jacqueline: Local voter and tax rolls. The census is far too slow/chunky to be useful for that."

Not true, they use census data, including data from the variety of monthly, quarterly, and yearly surveys the Census Bureau conducts.

Local voter and tax rolls wouldn't help because not everyone registers to vote or pays local income taxes (many states and municipalities don't even have their own income taxes) and the percentage of people who do register to vote or pay taxes varies from area to area so you can't extrapolate population from that.

I work for the Census, I work with the media buy people on occasion. The best place to find them is on bus stop shelters, that is where they are deployed usually.

No seriously, since they can't actually be planning buses by headcount, they must be planning to bus all of us somewhere.

Freaking A.

Dr. Hayek called and he want his name back...

If u believe what you wrote you are going to fail Marketing 101 - Econ 101 and a bunch of other courses - and probably life along the way.

Markets [both quantity and price] are determined by something pretty cool - and basic called Supply and Demand.

What you suggest has been tried - planned economies were the hot topic in the 60s - just build a huge table of inputs and outputs and everything will be great - problem was lots of buses ran were there were people - BUT NO DEMAND for bus transportation, and in other areas there were fewer bus seats than people needed

Markets work a whole lot better for socks and tires and buses - and hostpitals and even schools - if we let them...

Lonely Libertarian, I see you failed Sarcasm 101 in college.

The real problem with the ads is lost on some commenters. Of course the government must collect this data; it is stated in the Constitution. Of course the data collected is useful. Of course firms also collect some data about their market. But that is not the real problem with the ad.

The real problem with the ad is what it assumes people believe the role of the government is. An ad showing a red Ferrari and a beautiful woman assumes that people believe that these two somehow go together. The ad is effective because people do believe that. An ad that tells you need to be counted by the government in order to know how many hospitals/busses/socks you get assumes that people believe the government provides you with these.

So stay in line and be counted and you will then get your allotment of s socks, t tires, and b buses. Hope and change!

I'll probably get flamed, but FWIW it seems there's alot [sic] of positive spillover effects from the census data.

Shane, I don't see anyone arguing that the Census doesn't serve a purpose. I see a bunch of people pointing out that it's a crappy tool for this purpose.

@Brad P.

Prices are determined by the system (i.e., they are endogenous). To determine the prices that achieve efficiency, either the government or private firms needs to know tastes, endowments, and technologies. In other words, if private firms make production decisions based on bad information, prices will not be efficient. I would agree with you that census data provides only a small part of the information on tastes, endowments, and technologies needed for efficiency. But the "much else" needed for efficiency isn't given by prices. It is given by more data on tastes, endowments, and technologies. Only once the data is complete can the government or the private sector transform it, through utility and profit maximization, into efficient prices.

A good metaphor for this is supply and demand curves. The efficient price is determined by supply and demand. Changes in tastes, endowments and technologies shift supply and demand curves. As a result, you can't determine the efficient price unless you know the shape and location of supply and demand curves. The socialist calculation debate was about whether the government or the private sector is better at determining efficient prices. That amounts to the question whether the government or the private sector is better at determining the shape and location of supply and demand curves. It turns out that there is nothing inherent in the nature of supply and demand that says that the government or the private sector would do a better job.

If the government does it, then all producers and consumers email their data on tastes, endowments, and technologies, to the government, which uses it to determine the shape of supply and demand curves. With this supply and demand information, it determines price and, thereby, quantity. It then emails producers orders about how much to produce and what price to sell at. For this to work you obviously have to assume that the government has the resources and intention to carry out this program.

If the private sector does it, then producers and consumers share all their data on tastes, endowments, and technologies, using it to determine the shape of supply and demand curves. This allows everyone to determine the prices and quantities needed for efficiency. Because the government isn't around to order producers and consumers to actually follow these prices and there is no reason to think that they automatically will (e.g., a producer might try to capture consumer surplus by bargaining hard and refusing to sell at the efficient price), we must impose the assumption that everyone in the economy behaves as an "efficient price taker" or that government is involved in the economy enough to force people to do so. With this assumption (and assuming that all private sector actors have access to all requisite data), the private sector will sell the efficient quantity at the efficient price.

There isn't anything about supply or demand that says that the government or the private sector will do a better job of collecting information on tastes, endowments, and technologies, using the data to determine efficient prices, and forcing people to abide by them. One may be better at it than the other, but it probably depends on the particular government and private sector you happen to have to work with.

OK, everyone calm down. 3 key points:

1. These ads are targeted at traditionally undercounted populations, people who rely on public transit more than your average MR reader. (coincidentally, these are also people who are most hurt by price increases, @Jeff)

2. The Census Bureau pre-tests absolutely everything, and I can assure you that the ad campaign is effective in increasing response, especially among those traditionally undercounted populations. This is important because....

3. Every 1% increase in mail-back response saves the U.S. taxpayer approximately 85 million dollars. Remember that enumeration is constitutionally mandated, and over the years this has been interpreted to mean we have to go door to door if you don't send back your form. And the enumerators may not catch you the first time around, so that means they have to go back, and so forth.

Bottom Line: Advertising is effective and a bargain. (The same argument applies to the pre-notification letter and reminder postcard, for those of you fond of arguing about government spending. These things SAVE money.)

Freaking A, I can appreciate your sentiment on the potential negative effect of the ads on government dependency. But a few quibbles....

1. The government does provide buses, at least here in DC. And revenue/profit isn't its sole consideration in doing so. (Access to transit is a publicly provided good.)

2. The government does provide schools/classrooms almost exclusively for the ad's target populations.

3. While the government doesn't "provide" the hospital directly, it certainly is heavily involved in the provision of healthcare to the targeted population. "Hospitals" in this case should be thought of as synonymous with "access to healthcare."

Really LL? You really think I don't understand that the government is funded through taxation? Do you think that most Americans are ignorant of this?

As long as we're worrying about our country, I'll put in my two cents. I'm worried about people who refuse to believe in the notion of government at all. I'm worried about people who hear "government" and think of something distinct from themselves, something that's not the by the people, of the people, and for the people. People who act as victims by virtue of the mere existence of taxation. People who reject that "government" is necessary or even welfare enhancing. People who focus solely who focus on what's being "taken from them" without ever reflecting on whether it would have been theirs in the absence of government.

There are plenty of arguments to be made in favor of taxpayer-subsidized public transit (or streetlights, for that matter), if you look. This is Econ 101 stuff. Of course, there are also arguments against. If you disagree with public provision of transit, that's understandable. But don't stand here and ask me to reflect on government as some sort of impolite thief.

I suppose the reason for this is that the political factions don't trust each other with anything more sophisticated than a simple head count.

The reason for this is that the US Supreme Court ruled that it must be done as a simple head count prior to the 2000 census.

1. These ads are targeted at traditionally undercounted populations, people who rely on public transit more than your average MR reader.

That's only really true if they are on the INSIDE of the bus.

But don't stand here and ask me to reflect on government as some sort of impolite thief.

This is a joke, correct?

Hahahaha.

The government isn't an impolite thief. It is an armed, coercive thief.

"Impolite thieves" can't take away your freedom under color of law.

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