Supporting Statement B -MRTS

9
SUPPORTING STATEMENT
U.S. Department of Commerce
U.S. Census Bureau
Monthly Retail Trade Survey
OMB Control No. 0607-0717

Part B. Collection of Information Employing Statistical Methods
1.

Universe and Respondent Selection
Sampling Frame: The sampling frame used for the MRTS has two types of
sampling units: Employer Identification Numbers (EINs) and large, multipleestablishment firms. Both sampling units represent clusters of one or more
establishments owned or controlled by the same firm. The information used to
create these sampling units was extracted from data collected as part of the 2002
Economic Census and from establishment records contained in the Census
Bureau's Business Register as updated to December 2004.
To create the sampling frame, we extract the records for all employer
establishments located in the United States and classified in the Retail Trade
sector as defined by the 2002 NAICS. For these establishments we extract sales,
payroll, employment, name and address information, as well as primary
identifiers and, for establishments owned by multi-unit firms, associated EINs. To
create the sampling units for multi-unit firms, we aggregate the economic data of
the establishments owned by these firms to an EIN level by tabulating the
establishment data for all wholesale establishments associated with the same EIN.
Similarly, we aggregate the data to a multi-unit firm level by tabulating the
establishment data for all retail establishments associated with the same firm
identifier. No aggregation is necessary to put single-unit establishment
information on an EIN basis or a firm basis. Thus, the sampling units created for
single-unit firms simultaneously represent establishment, EIN, and firm
information.
Stratification: The primary stratification of the sampling frame is by industry
group based on the detail required for publication. We further stratify the
sampling units within industry group by a measure of size (substratify) related to
their annual sales. Sampling units expected to have a large effect on the precision
of the estimates are selected "with certainty." This means they are sure to be
selected and will represent only themselves (i.e., have a selection probability of 1
and a sampling weight of 1). Within each industry stratum, we determine a
substratum boundary (or cutoff) that divides the certainty units from the
noncertainty units. We base these cutoffs on a statistical analysis of data from the
2002 Economic Census. Accordingly, these values are on a 2002 sales basis. We
also used this analysis to determine the number of size substrata for each industry
stratum and to set preliminary sampling rates needed to achieve specified

10
sampling variability constraints on sales estimates for different industry groups.
The size substrata and sampling rates are later updated through analysis of the
sampling frame.
Sample Selection: The first step in the sample selection is to identify firms
selected with certainty. If a firm's annual sales or end-of-year inventories were
greater than the corresponding certainty cutoff, that firm was selected into the
MRTS sample with certainty.
All firms not selected with certainty were subjected to sampling on an EIN basis.
If a firm had more than one EIN, we treated each of its EINs as a separate
sampling unit. To be eligible for the initial sampling, an EIN had to have nonzero
payroll in 2003. The EINs were stratified according to their major industry and
their estimated sales (on a 2002 basis). Within each noncertainty stratum, a simple
random sample of EINs was selected without replacement.
Sample Maintenance: We update the sample to represent EINs issued
since the initial sample selection. These new EINs, called births, are EINs,
recently assigned by the IRS, that have an active payroll filing requirement
on the IRS Business Master File. An active payroll filing requirement
indicates that the EIN is required to file payroll for the next quarterly
period. The Social Security Administration attempts to assign industry
classification to each new EIN.
EINs with an active payroll filing requirement on the IRS Business Master
File are said by the Census Bureau to be “BMF active” and EINs with an
inactive payroll filing requirement are said to be “BMF inactive.”
We sample EIN births on a quarterly basis using a two-phase selection
procedure. To be eligible for selection, a birth must either have no industry
classification or be classified in an industry within the scope of the Service
Annual Survey, the Annual Wholesale Trade Survey, or the Annual Retail
Trade Survey, and it must meet certain criteria regarding its quarterly
payroll. In the first phase, we stratify births by broad industry groups and a
measure of size based on quarterly payroll. A relatively large sample is
selected and canvassed to obtain a more reliable measure of size,
consisting of receipts in two recent months and a new or more detailed
industry classification code. Births that have not returned their
questionnaire after 30 days are contacted by telephone.
Using this more reliable information, in the second phase we subject the
selected births from the first phase to probability proportional-to-size
sampling with overall probabilities equivalent to those used in selecting
the initial MRTS sample from the December 2004 Business Register.
Because of the time it takes for a new employer firm to acquire an EIN
from the IRS, and because of the time needed to accomplish the two-phase

11
birth-selection procedure, we add births to the sample approximately nine
months after they begin operation.
If a firm was selected with certainty and had more than one establishment
at the time of sampling, any new establishments that the firm acquires,
even if under new or different EINs, are included in the sample with
certainty.
However, if a firm was selected with certainty and had only one
establishment at the time of sampling, only future establishments
associated with that firm’s originally-selected EIN are included in the
sample with certainty; any new EINs that might later be associated with
that firm are subjected to sampling through the quarterly birth-selection
procedure.
To be eligible for the sample canvass and tabulation, an EIN selected in the
noncertainty sampling operations must meet both of the following requirements:
·

It must have an active payroll filing requirement on the IRS Business
Master File.

·

It must have been selected from the Business Register in either the initial
sampling or during the quarterly birth-selection procedure.

Each quarter, we check against the current Business Register to determine if any
EINs on the survey have become BMF inactive. Typically, we do not canvass
BMF inactive EINs during the reference month. Likewise, if any EIN on the
survey was BMF inactive in a previous reference month is now BMF active on
the current Business Register, we again include these EINs in the canvass.
Single-unit EINs selected into the sample with certainty are not dropped from
canvass and tabulation if they are no longer BMF active. Rather, the firm that
used the EIN is contacted, and if a successor EIN is found, it is added to the
survey.
Because births are not represented in the monthly survey until they go
through the two-phase selection procedure, an interim procedure is used
to account for births during the period of time between the onset of
activity and the time of birth selection. This interim procedure consists of
imputing data for all EINs currently in the monthly survey that go out of
business but are still on the IRS Business Master File.
Births are added to the monthly survey in February, May, August, and
November of each year. At the same time, inactive EINs are removed
from the survey. To minimize the effect of births and inactive EINs on the
month-to-month change estimates, we phase-in these changes by

12
incrementally increasing the sampling weights of the births and decreasing
the sampling weights of the inactive EINs in a similar fashion. In the first
month, we tabulate the births at one-third their sampling weight and
tabulate the inactive EINs at two-thirds their sampling weight. In the
second month, we tabulate the births at two-thirds their sampling weight
and tabulate the inactive EINs at one-third their sampling weight. In the
third month, we tabulate the births at their full sampling weight and the
inactive EINs are dropped (sampling weight equal zero).
EINs that were BMF inactive in a previous reference quarter but are
identified as BMF active for the current reference quarter are treated as
births for this procedure.
Estimation procedures: Estimates of monthly sales and end-of-month
inventories are derived from data collected in the MRTS. Each month,
firms in the MRTS sample are asked to report their sales and inventory
data for the month just ending. Monthly totals are computed as the sum of
weighted data (reported and imputed) for all selected sampling units that
meet the sample canvass and tabulation criteria given below. The weight
for a given sampling unit is the reciprocal of its probability of selection
into the MRTS sample. The monthly totals are then benchmarked to the
latest totals from the ARTS. Period-to-period (e.g., month-to-month)
change estimates are computed using the benchmarked monthly totals. To
be eligible for the sample canvass and tabulation, an EIN selected in the
noncertainty sampling operations must meet both of the following
requirements:
·

It must have an active payroll filing requirement on the IRS
Business Master File.

·

It must have been selected from the Business Register in either the
initial sampling or during the quarterly birth-selection procedure.

Monthly total estimates for broad industry groups (e.g., 2-, 3-, and 4-digit
NAICS levels) are computed by summing the benchmarked monthly totals
for the appropriate detailed industries comprising the broader industry
group. Variances are estimated using the method of random groups.
Seasonal adjustment: Estimates are adjusted for seasonal variation and
trading-day differences using Census Bureau's X-12 ARIMA program
(v0.3, b188).
2.

Procedures for Collecting Information
The sample is a probability sample selected from retail and food services
employers (NAICS sectors 44, 45 and 722), contained in the Census Bureau's

13
Business Register, which covers all employers who make social security
payments for their employees under the FICA.
There are approximately 12,000 retail firms included in the survey. Of this
number, about 3,600 are large firms and were selected with certainty (100 percent
chance of selection). The remaining 8,400 respondents are smaller firms and
were selected with noncertainty.
Data for the MRTS are obtained at the 6-digit NAICS level with all intermediate
and summary tables obtained by summation. Tabulations will include estimates
on sales, inventories, and inventories/sales ratios. Data for the MRTS are
published for four-digit and selected five-digit NAICS levels and total summary
levels.
Statistical analysis of the monthly data will be based on comparison of the
monthly data to:
(1) annual survey estimates;
(2) prior year monthly and annual survey results;
(3) the results of the most recent Economic Census; and
(4) published trade, business, and media reports.
Comparisons of the monthly estimates to current and prior year annual and
monthly estimates are produced by the use of data edits that identify firms
exceeding predetermined tolerance cutoffs. The tolerance cutoffs specify
acceptable dollar level and percent differences between the annual data, the
previous annual estimates, and monthly wholesale data. Data analysis also
includes research of inventory-to-sales ratios. Also, an analysis is made at the
detailed NAICS level to determine if data reported for each subsector appear
acceptable.
In terms of dollar volume, these estimates have a high BEA priority because of
their timeliness. The 2010 average response (in terms of dollar volume) to this
voluntary survey was about 74 percent for sales and 70 percent for inventories.
The 2010 average response (in terms of units) to this voluntary survey was about
65 percent.
3.

Methods to Maximize Response
The NPC in Jeffersonville, Indiana, performs a telephone follow-up for all firms
that have not responded by a certain date and for those firms that have not
completely filled out the form or have reported questionable data that may be
unacceptable for the sales and inventories estimates. Firms that refuse to respond
to the survey are called to convey the importance of their participation.
The Census Bureau accepts data prepared on a company’s own form, thereby
relieving the respondent of the burden of posting data to a report form. Carefully

14
prepared estimates are accepted. A laser printer facsimile machine connected to a
toll-free telephone line permits facsimile reporting to our collection facility on a
24-hour basis. The Census Bureau also provides a toll-free telephone number to
permit respondents to call in data or ask questions without any extra expense.
Reminders are sent by FAX to companies that do not initially respond in a
particular month. Additionally, within the Census Bureau, an economic area-wide
effort continues to address issues to improve response and minimize reporting
burden.
Additionally, we work with our data collection staff to identify strategies for
maximizing response rates and improving the data collection process that will
reduce response burden, improve data quality, and collect data in a more company
centric manner. We also visit companies that are having a large effect on the
survey that are not reporting or may be reporting inconsistently or providing data
in a format that is difficult to use.
4.

Testing of Procedures
We continuously edit the reported data and monitor procedures and methods for
data collection in an effort to reduce reporting burden and improve data quality.
Budget permitting, we plan to conduct future content evaluation surveys to
measure nonsampling error and ways to further reduce reporting burden.

5.

Contacts for Statistical Aspects and Data Collection
Direct questions regarding the sample design and statistical methodology used for
this survey to Katrina Washington, Chief of the Statistical Methods Branch,
Census Bureau, (301) 763-1212, or Bill Davie, Chief, Program Research and
Development Branch, (301) 763-7182.
Planning and implementation of this survey are under the direction of Timothy
Winters, Chief of the Retail Indicators Branch, Census Bureau, (301) 763-7130.

15
Attachments

1. Copy of Form SM-44(06)S
2. Copy of Form SM-44(06)SE
3. Copy of Form SM-44(06)SS
4. Copy of Form SM-44(06)B
5. Copy of Form SM-44(06)BE
6. Copy of Form SM-44(06)BS
7. Copy of Form SM-45(06)S
8. Copy of Form SM-45(06)SE
9. Copy of Form SM-45(06)SS
10. Copy of Form SM-45(06)B
11. Copy of Form SM-45(06)BE
12. Copy of Form SM-45(06)BS
13. Copy of Form SM-72(06)S
14. Copy of Form SM-20(06)I
15. Copy of MRTS cover letter 1
16. Copy of MRTS cover letter 2
17. Written Comments