Importance of Demographic Data to Local Governments

Editor's Notes

• #2: Good morning and thank you for joining me. Today I am going to be discussing the mining and use of demographic data.
• #3: Before I get into that, I want to take a second and tell you a little about myself. My name is Jim Flick and I am the Economic Development Director and Public Information Officer for Deerfield Township in Warren County near Cincinnati. I have always been fascinated by places, the people that inhabit them, and how the government works to try and solve public problems. As a child I grew up with a father and grandfather who worked in the federal government administration. I guess I kind of saw government as a family business and I became rather passionate and idealistic about how government works. I, however, was particularly interested in local government and so my goal from a young age was to work in local government as I am now. During my education and early work experience in pursuit of that goal, I sort of fell into the world of data and analytics. It became a secondary passion for me as I found I understood how I could put pieces of a puzzle together with data. After graduate school, I started my career, not in government, but as research analyst for a commercial real estate company, and within two years was promoted to Vice President of Research and Marketing. In that role, I was able get to know places really well though the analysis of demographic and real estate data. That experience led me into economic development first at the City of Cincinnati, where I got the opportunity to assist with Smart City initiatives and other interesting projects, because of my data and analytics experience. In taking over the Director of Economic Development role in Deerfield Township I have tried to bring that analytic mind with me. While I know I will get to meet the people and businesses in the township, I want to know them better and I firmly believe that I can do that through data analysis; specifically, the analysis of demographic data, which leads to me today’s presentation.
• #4: My goal for this presentation is to detail the importance of demographic data and showcase how townships can mine it and utilize it even with limited resources. The idea for this topic as a workshop comes from an event I attended some time ago led by two site selectors who presented the specific demographic metrics they use to determine where to locate companies. This event was attended by economic development professionals across the many cities, villages, townships, counties in Southwest Ohio, Southeast Indiana, and Northern Kentucky. This question was “Do your economic development organizations (EDOs) have these demographic metrics readily available or at least do they know how to access this information quickly in order to respond to site selection requests for information?’ Only about 25% of the crowd said they did or could. This was astonishing to me. It is absolutely impossible to effectively run an EDO without a deep understanding of the community and the people that make it up. Demographics are essential to that understanding. Often times when requests for information from through from site selectors responses are needed in a matter of days (if you are lucky). Knowing and understanding demographics is vital to growing a community. I would argue that when talking to a business attraction prospect, economic developers should be able to list specific demographics off the top of their head. I understand there will always be a time and a place to say, “I’m not sure, I will follow up with you about that.” However, if one have to say that about a common demographic criteria about your community, it reads to the prospect as a lack of understanding about your community. Stats and data and being able fire them off at any given moment lends credibility and emphasizes your expertise.
• #5: We as a society are smarter today than ever before in history because of the amount of data that we can capture and analyze. With the enhanced ability to get data, it is playing an ever increasing role in government decision making. For example, there is some really great stuff happening through the country and right here in Ohio concerning data. This is especially true at my former employer, the City of Cincinnati, which has an amazing Office of Data and Performance Analytics. The amount of data they are capturing and the dashboards they are creating with it are really raising the bar for other communities in terms of open data platforms and smart cities initiatives. Today though, I’m not going to talk about data as it relates to smart cities initiatives. I would consider this workshop the prerequisite or 101 course on data and is focused specifically on demographics. The reason I am focusing on demographics versus the other data that you could be capturing for smart city purposes is because, no matter how smart communities are becoming, there is a base level of understanding about a community that comes from demographics that governments need to have to properly serve their communities. In fact, when it comes to governments, I still think demographics are the most important data to have.
• #6: So what are demographics? Demographics give an analytic snapshot of the people that make up a community by detailing socioeconomic information such as age, education, gender, race, labor force, and income.
• #7: Demographic data is collected through the US Census. The U.S. Census counts every resident in the country and is mandated by Article I, Section 2 of the Constitution. As you know it takes place every 10 years with the next one scheduled for 2020. The census in 2020 will require counting an increasingly diverse and growing population of around 330 million people in more than 140 million housing units. To get an accurate count, the Census Bureau must build an accurate address list of every housing unit, maximize self-response to the census, and efficiently follow up with those who do not respond. In preparation for the 2020 census, your communities may already have held meetings to see how we can assist in maximizing responses and limiting the need for the Census bureau to follow up with households. Between the Censuses, the US Census Bureau conducts the American Community Survey. The American Community Survey (ACS) is an ongoing survey that provides the government with important information on a yearly basis about our nation and its people. Information from the survey generates data that helps to determine how more than $675 billion in federal and state funds are distributed each year. Through the ACS, we are able to know more about jobs and occupations, educational attainment, veterans, whether people own or rent their homes, and other topics.
• #8: This information is extremely important because demographics have a wide-reaching impact. With this data public officials and administrators (such as yourself), planners, and entrepreneurs are able to assess the past and plan the future such as planning for hospitals and schools, supporting school lunch programs, improving emergency services, building bridges, and informing businesses looking to add jobs and expand to new markets, and more. Additionally, demographics are used for determining amounts of federal aid, school funding formulas, property taxes, and the drawing of voting districts.
• #9: As I mentioned previously, as an economic development professional I need to know the answers to several demographic questions off the top of my head so that when I am talking to a site selector on the phone or out and about I can answer them and property advocate for my community. Those questions may be: What is the median age of people in your community? 27 What is your community’s poverty rate? What is your community’s median household income? What percentage of people in your community have at least a bachelor’s degree? Now, you may not be in economic development and you may not need to be able to have this information right at your fingertips, but you should definitely have them sitting on your desk or in a folder in your office because at some point, whether it is for a report, master plan, project, grant application, etc. you will need to understand the demographics of your community.
• #10: So for example: As fellow government administrators, I am going to assume that you know at least a little about the Opportunity Zone program, but I will just provide a quick refresher on that. The Opportunity Zone program was established by the Investing in Opportunity Act, which was part of the Tax Cuts and Jobs Act of December 2017. This program was created to revitalize economically distressed communities using private investments rather than taxpayer dollars. To stimulate private participation in the Opportunity Zone program, taxpayers who invest in Qualified Opportunity Zones are eligible to benefit from capital gains tax incentives available exclusively through the program.
• #11: The designation criteria for this program, as it is with many other government programs, is rooted in DEMOGRAPHICS. That criteria restricted designation of opportunity zones to census tracts had a poverty rate of at least 20% and a median family income of no more than 80% of the statewide median family income for census tracts within non-metropolitan areas or no more than 80% of the greater statewide median family income or the overall metropolitan median family income for census tracts within metropolitan areas. So whether it is trying to get an opportunity zone designation or applying for Community Block Grant Funds, demographics are very important to understand.
• #12: How do you mine demographic data? I’ll admit, mining demographic data can be tedious and inefficient if you don’t know where you are looking. Yes there are paid programs that you can get that maybe easier to use, but the information you are looking for may be located on several different reports and you would still need to put in the time to combine them into one report. And, while, the paid programs may be a little more efficient, I don’t believe that the tradeoffs of paying for the service is worth the amount of time saved. Especially since we, as public officials, are accountable for how every tax dollar is spent. These programs can be expensive and what you are paying for is FREE information. Which, for me, is the biggest problem; I can’t justify to myself the idea of paying for free information. Plus, if you are more analytical and like to get in the weeds evaluating and analyzing the data and your community, as I do, getting the data yourself ensures that you know where it is being pulled from, and you can control the formulas when forecasting things like population growth.
• #13: If you agree with me and don’t pay for a third party provider, then you can find demographic data for free a few different places, but the number one place, especially for township level data, is to just go to the source and visit American Fact Finder. American Fact Finder is the Census Bureau's online, self-service tool designed to search population, economic, geographic and housing information that is gathered through the Decennial Census, American Community Surveys, and other surveys and censuses.
• #14: Now I will walk you through using American Fact Finder. It actually is pretty simple to drill down to information about your township, which, to me, further stressed that the cost for paying a third party provider may not be worth it because there really is not too much time saved, if any. Once you are on the American Fact Finder Website, I would suggest going to the advanced search. This will lead you into the full database of information from all the available surveys the US Census Bureau conducts. Don’t be intimidate though, once you apply a couple of filters you will be well on your way to analyzing the data. There is also a guided search option for those who may prefer. The first filter you should apply is the geographic filter. For townships they are listed under the County Subdivision in the geographic type. Once you have that selected you simply select the state and county and a list of all the townships in that county will generate allowing you to select what you want. By adding that geography to you selections the entire US Census Bureau data base will filter to only show the data sets that have information for your county in them. If you would prefer an even smaller geography to look at just a segment of your community, information is available down to the census tract and block group. For the purposes of this workshop though, I will be focusing on the township level. Once the geographic filter is applied you can narrow even further by selecting which data set you want to look at. The most up to date data will be the 5 year estimates of the American Community Survey, while the most accurate data will be the last full census. From there you have a narrowed list of items to choose from and you can click through those to find the information you are looking for.
• #15: What should you be looking for? After attending numerous trainings and conferences such as this one, the most common demographic characteristics that I have heard that are important to understand include: Total Population A major indicator for economic health is population. If an area’s population is growing, it’s a sign that the area’s economy is doing well. If an area is not experiencing growth, or seeing population declines, then it is likely the area is experiencing economic hardship. Population by Race Speaks to diversity of the community, which is an important factor when thinking about ensuring policies are representing all interests that may exist in a community. Population by Sex Like, race, sex speaks to the diversity of the community Median Age and Age Distribution Understanding the age distribution can help highlight whether policy changes and management actions might affect some age groups more than others. It also may highlight the need to understand the different needs, values, and attitudes of different age groups. If an area has a large retired population or soon-to-be-retired population, for example, the needs and interests of the public may differ than an area with a large number of minors or young adults. Poverty Level Helps a community understand the need for things like job creation, affordable housing, education and more. School Enrollment Is there a need for new schools to be developed Educational Attainment Education is one of the most important indicators of the potential for economic success, and lack of education is closely linked to poverty. Studies show that areas with a higher-than-average-educated workforce grow faster, have higher incomes, and suffer less during economic downturns than other areas. Understanding differences in education levels can highlight whether certain people might be disproportionately impacted by policies, plans, and management actions, and can inform communication and outreach efforts. School enrollment can be an important indicator of the level of access to education, a community’s potential for economic growth, and the number of dependents in a community that are not of working age. Some government agencies also use this information for funding allocations. Field of Degree Dives a little deeper into the understanding workforce, so a community can target specific industry clusters based on what types of educational background their workforce has. Employment (Labor Force Status) A community needs to understand the amount of labor in its local economy and if they are participating in the labor market. Employment by Industry Like field of degree, it helps understand industry clusters that exist in the community Household Income Median Average Per Capita Income Earnings Understanding earnings and income are signs of the health of the local economy and can aid site selectors when choosing to locate in a specific area. You can use these headings as search items to find the information in what you are looking for. As you click into these, you will also be able to see historical data should you want to do a trends analysis in the future.
• #16: For those in rural communities, yes, there is information in there for you as well. Why rural communities should know this information: According to Select USA, a government-wide program led by the U.S. Department of Commerce, international companies are looking more and more to rural America for investments. The reasons behind this is that rural areas offer low business costs, high quality of life, and the availability of natural resources. Particularly, if rural areas are located near major airports, interstates, or ports, these areas can be extremely competitive in the selection process. However, in order to grab the attention of the site selectors or companies, these rural areas must have an understanding of their communities through demographics in order to potentially reap the awards which can be, “the average value of an FDI project in non-metro area is 89 percent higher than those in metro areas,” and “the average number of jobs created by an FDI project in a non-metro area is also greater than that in a metro area.”
• #17: As an example of this, I went ahead and looked up the key demographic characteristics for Jefferson Township, the State of Ohio’s least populous township. The key demographics for Jefferson Township are as follows: Total Population – 50 Median Age – 53 Population by Race White (Non-Hispanic) – 50 (100%) Population by Sex Male – 24 (48%) Female – 26 (52%) Poverty level – 0 (0%) Age Distribution 15-19 yrs – 13 (26%) 50-54 yrs – 14 (28%) 60-64 yrs – 23(46%) School Enrollment (Pop. Under 25) High School: Grade 9 to Grade 12 – 13 (100%) Educational Attainment (Pop Over 25) Some College, No Degree – 19 (51%) Associate’s Degree – 7 (19%) Graduate or Professional Degree – 11 (30%) Field of Degree (Pop Over 25) Science and Engineering – 11 (100%) Labor Force – 37 Labor Force Participation Rate – 100% Emp. By Industry (Pop. Over 16) Finance and Insurance– 7 (19%) Professional, Scientific, and Management – 11 (30%) Education, Health Care, Social Assistance – 12 (32%) Public Administration – 7 (19%) Median Household Income - $45,833* Average Household Income - $50,542* Average Earnings – $45,238 Per Capita Income – $26,232 * Indicates that data is from 2015
• #18: The most accurate demographic data the government is able to collect is through the US Census, but since that only occurs every 10 years, there is a heavy reliance on the American Community Survey to provide estimates in the in between years. The American Community Survey takes a sampling of 2.5 percent of all citizens and makes single year and multiyear estimates of demographic, housing, social, and economic characteristics. Because these are estimates and based on only a small portion of the population, the accuracy of the data may be compromised especially as you get farther out from a census year. Based on the population of Ohio Township’s you will likely only have the 5-year estimates available. This however, according to the US Census Bureau, is the most reliable estimate the ACS is able to generate. The reason for that is that it uses the samples from the previous 5 years to make the estimates, meaning the estimates are based on the largest sample size available through the ACS. Still accuracy of the data may be a concern. For example, as I mentioned, I previously worked for the City of Cincinnati. I created an interactive dashboard detailing the demographics for the City that was based on 2015 ACS data. Shortly after the release, I was asked to take it down by the City Planning Department. The reasoning was that prior to the 2010 census, the City was advertising ACS population figures and when the 2010 census was released, the population did not meet what those estimates said and so it looked as if the City lost a significant amount of population, when in reality it did not. It was simply that the ACS over estimated population growth in the City. Despite the concerns over the accuracy of the data, the ACS is still vital to understand because of the role that it plays in decision making as noted earlier.
• #19: There are several things you should ensure you are doing with demographic data. The first is to make sure that demographics are informing your community’s long-term vision and priorities. One of the ways to do this is to ensure your community’s strategic plans have a demographic trends section. If so, see if you can answer the following questions: Are the data sources property referenced? What are the key points the data shows? Are the vision and priorities laid out in the plan based in the analysis of the data? If the answer to these questions is yes, then the relevant trends the demographics show are driving land use policies. If you answered no, then there is work to do. You should discuss with relevant staff and stakeholders what trends they perceive are impacting the future of their community and determine if those are driving the strategic planning process. 2. Determine if you are Representing Diverse Interests: Demographics will showcase the diversity in your community and in order to properly serve the community it is beneficial that planning boards and committees reflect the diversity of the community with respect to age, gender, race, income, among other characteristics. Once you understand the community’s diversity you can ask yourself: Are the various subsets of the population (e.g. minorities, working families, young adults) currently represented on local boards and committees? Does the data point to specific public problems (lack of affordable housing, unemployment, and child poverty) that are not currently being adequately addressed? If you can answer yes, then it shows that you community is committed to representing all segments of the community and understanding the issues affecting them. If you answered no, then outreach and inclusion of these groups is likely needed to ensure they are included in the policy formation process. 3. Use Data to Tell a Story and Market you community: One of the most important ways to use data is to tell a story. This can be through marketing efforts to site selectors or using the data to justify policy decisions and projects. Demographic data, when properly showcased, can influence decision makers, investors, developers, and the community. 4. Further Analysis Lastly, you can use demographic data along with a couple of other sources to perform deeper analysis of your community such as retail void analyses, psychographic analysis. I won’t get into those right now, that’s a whole other workshop, but the foundation for those things is rooted in demographic data, which again shows just how important this information is.
• #20: An economist named Charles Tiebout presented a political theory model in his “A Pure Theory of Local Expenditures” that hypothesized that people sort themselves according to similar preferences for public goods. I won’t dive deeply into this theory, but for me it means that businesses and people sort themselves based on what the community looks like and what services are offered. This can be equated to the old real estate phase about “Location, Location, Location,” which just isn’t about where something is on a map, but where a community is, what it offers in terms of services, the quality of life, local amenities, and amount of opportunities. Marketing the demographics of your community helps those people and businesses in that decision making process. There are several ways that you can market your community’s demographics: Website The easiest way is to just put the demographics directly on your website. This showcases them for all to see. Videos/Brochures Depending on your technical skill or resources you can produce videos and brochures to send to businesses, stakeholders, use in meetings, share with elected officials, and more. I would like to share a video that I created, essentially with the demographics of Deerfield Township and utilizing pictures that I took around the Township. Social Media The growth of social media as a platform for marketing has expanded the outreach communities can have to market themselves, and since I believe demographics should be an integral part of that marketing, there is no reason not to advertise demographics on your various social media accounts.
• #21: With that, I just want to say, demographic data is the base level data that your community should be collecting and relying on to inform decision making. It is extremely important and should be driving strategic planning efforts. Follow me on Twitter at @jamesjflick and Deerfield Township at @choosedeerfield. I can now take any questions you may have. Thank you.