Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Minyan Mailbag



Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.

We have shown how important the Birth - Death estimate of small business made by the BLS is to the employment number. So the all important question is can the BLS properly gauge small business activity?

Luckily for us, and this is what Minyanville is all about, we have some very experienced people out there. A Minyan timely answers our question:

Dear Professor Succo,

About a decade ago when I was a business strategy consultant, we were hired by a lobbying group for small business to provide some advice. Part of the assignment involved determining how many small businesses were in existence and their average longevity.

I had a crack team of 4 researchers search for reliable statistical data on that subject for a couple of months, and they came up dry; the only data they could find were circular-i.e. numbers that were widely circulated but did not have an origin based in fact. The best source was the membership data base, but it was so flawed as to render it useless.

We tried to develop our own methodology for estimating the population of small businesses and their life cycle, but found for a wide variety of reasons it was an near-impossible task (including such fundamentals as the definition of "a business", reliably determining whether or not a business was in fact "active," what constitutes an "employee," etc).

A review of the literature showed that everyone else that had seriously tried to come up with an accurate estimate had failed. After a significant investment of time and brain power, we gave up and used a substitute measure that met our specific analytical needs.

If the BLS purports to be estimating small business formations and their hiring patterns, you can be sure that the numbers are totally fictitious


Minyan Robert Schneier

Enough said. Thank Robert!

< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos