The preliminary estimates in this report are based on responses to the 2002 Survey of Business Owners (SBO) conducted by the U.S. Census Bureau. The data collected from the 2002 SBO are combined with data from other economic census programs and administrative records. Included are all firms operating during 2002 with receipts of $1,000 or more that filed tax forms as individual proprietorships, partnerships, and any type of corporation, except those classified as: agricultural production; domestically scheduled airlines; railroads; U.S. Postal Service; mutual funds (except real estate investment trusts); religious grant operations; private households and religious organizations; public administration; and government.
The data provide the number of firms, sales and receipts, employment, and annual payroll for kind of business and state by gender, Hispanic or Latino origin, and race. Separate reports for minority- and women-owned businesses will be issued over the next year and will include more detailed data by geographic area, kind of business and size of business.
The lists of all firms (or universe) are compiled from a combination of business tax returns and data collected on other economic census reports. The Census Bureau obtains electronic files from the Internal Revenue Service (IRS) for all companies filing IRS Form 1040, Schedule C (individual proprietorship or self‑employed person); 1065 (partnership); any one of the 1120 corporation tax forms; and 941 (Employer=s Quarterly Federal Tax Return). The IRS provides certain identification, classification, and measurement data for businesses filing those forms.
For most firms with paid employees, the Census Bureau also collected employment, payroll, receipts, and kind of business for each plant, store, or physical location during the 2002 Economic Census.
Sampling. To design the 2002 SBO sample, the Census Bureau used administrative data from the Social Security Administration (SSA) and several other sources of information to estimate the probability that a business was minority- or women-owned:
These probabilities were then used to place each firm in the SBO universe in one of nine frames for sampling:
· American Indian
· Asian
· Black or African American
· Hispanic
· Non-Hispanic white men
· Publicly owned
· Women
The SBO universe was stratified by state, industry, the inferred race code (based on the estimated probabilities of ownership by race), and whether the company had paid employees in 2002. The Census Bureau selected large companies (based on volume of sales, payroll, or number of paid employees) “with certainty.” All certainty cases were sure to be selected and represented only themselves (i.e., had a selection probability of one and a sampling weight of one). The certainty cutoffs varied by sampling stratum, and each stratum was sampled at varying rates, depending on the number of firms in a particular industry in a particular state. The sampling rate was lowest in states and industries with the greatest number of firms. A similar methodology was used to select a sample from the remaining universe. The purpose of this was to estimate the number of firms owned by persons of minority ancestry when no indication of minority ownership was found from any of the sources listed above.
A firm selected into the sample was mailed one of two questionnaires. The Census Bureau sent the SBO-1 questionnaire to partnerships and corporations. The businesses were asked to report the percentage of ownership, gender, Hispanic or Latino origin, race, and several characteristic questions (e.g., age, education level) for each of the largest three owners. The SBO-2 questionnaire was used for sole proprietors and self-employed individuals. The businesses were asked essentially the same information as asked on the SBO-1, but limited to two owners.
Tabulation. Business ownership is defined as having 51 percent or more of the stock or equity in the business and is categorized by:
Firms equally
male-/female-owned were counted and tabulated as a separate category.
Businesses
could be tabulated in more than one minority group.
For example, a firm could be counted as both Black- and Hispanic-owned, if the majority owner(s) reported his/her race as Black and his/her ethnicity as Hispanic or Latino origin.
The 2002 SBO was the first
economic census in which each owner could self-identify with more than one
racial group, so it was possible for a business to be classified and tabulated
in more than one racial group. This can result because:
a.
the sole owner
reported more than one race;
b.
the majority
owner reported more than one race;
c.
a majority
combination of owners reported more than one race.
Approximately 81 percent of the 2.3 million businesses in the SBO sample responded to the survey. Data for nonresponding firms were imputed based on respondents with similar characteristics. For the tabulations by gender, Hispanic or Latino origin, and race, the data for each firm in the SBO sample were weighted by the reciprocal of the firm’s probability of selection.
RELIABILITY OF ESTIMATES
The figures shown in this report are, in part, estimated from a sample and will differ from the figures which would have been obtained from a complete census. Two types of possible errors are associated with estimates based on data from sample surveys: sampling errors and nonsampling errors. The accuracy of a survey result depends not only on the sampling errors and nonsampling errors measured, but also on the nonsampling errors not explicitly measured. For particular estimates, the total error may considerably exceed the measured errors. The following is a description of the sampling and nonsampling errors associated with this tabulation:
Sampling variability. The particular sample used for this survey is one of a large number of all possible samples of the same size that could have been selected using the same sample design. Estimates derived from the different samples would differ from each other. The relative standard error is a measure of the variability among the estimates from all possible samples. The estimated relative standard errors presented in the tables estimate the sampling variability, and thus measure the precision with which an estimate from the particular sample selected for this survey approximates the average result of all possible samples. Relative standard errors are applicable to those published cells in which only the sample cases are tabulated. A relative standard error is an expression of the standard error as a percent of the quantity being estimated.
The sample estimate and an estimate of its relative standard error can be used to estimate the standard error and then construct interval estimates with a prescribed level of confidence that the interval includes the average results of all samples. To illustrate, if all possible samples were surveyed under essentially the same condition, and estimates calculated from each sample, then:
1. Approximately 68 percent of the intervals from one standard error below the estimate to one standard error above the estimate would include the average value of all possible samples.
2. Approximately 90 percent of the intervals from 1.6 standard errors below the estimate to 1.6 standard errors above the estimate would include the average value of all possible samples.
Thus, for a particular sample, one can say with specified confidence that the average of all possible samples is included in the constructed interval.
Example of a confidence interval. Suppose the estimate of American Indian- and Alaska Native-owned employer businesses in construction is 32,920 and the estimated relative standard error is 2 percent. An approximate 90-percent confidence interval is 32,920 + (1.6 x 658) or 32,920 + 1,053 or 31,867 to 33,973.
Nonsampling errors. All surveys and censuses are subject to nonsampling errors. Nonsampling errors are attributable to many sources, including the inability to obtain information for all cases in the universe, imputation for missing data, data errors and biases, mistakes in recording or keying data, errors in collection or processing, and coverage problems.
Explicit measures of the effects of these nonsampling errors are not available. However, it is believed that most of the important operational and data errors were detected and corrected through an automated data edit designed to review the data for reasonableness and consistency. Quality control techniques were used to verify that operating procedures were carried out as specified.
In
accordance with federal law governing census reports (Title 13 of the United
States Code), no data are published that would disclose the operations of an
individual establishment or business.
However, the number of firms in a
kind-of-business classification is not considered a disclosure; therefore, this
information may be released even though other information is withheld. Techniques employed to limit disclosure are
discussed at <www.census.gov/epcd/ec02/disclosure.htm>.
The information and data obtained from the
IRS, the SSA, and other sources are also treated as confidential and can be
seen only by Census Bureau employees sworn to protect it from disclosure.
Estimates are withheld, or suppressed, when publication
standards are not met. Suppression
occurs when one or more of the following criteria are met: the firm count is less than 3; or the Relative
Standard Error is 50 percent or more.
All dollar values presented are expressed in current dollars; i.e., 2002 data
are expressed in 2002
COMPARABILITY
OF 2002 AND 1997 DATA
The following changes were made in survey methodology in 2002 which affect comparability with past reports:
1. The 1997 Surveys of Minority- and Women-Owned Business Enterprises (SMOBE/SWOBE) form that was mailed to sole proprietors or self-employed individuals who were single filers or who filed joint tax returns instructed the respondent to mark one box that best described the gender, Spanish/Hispanic/Latino origin, and race of the primary owner(s). The gender question included an equal male/female ownership option.
The 2002 SBO form that was mailed to sole proprietors or self-employed individuals who were single filers or who filed a joint tax return instructed the respondent to provide the percentage of ownership for each owner and the gender of the owner(s). The equal male/female ownership option was eliminated.
The form that corporations/partnerships received in 1997 requested the percentage of ownership by gender of the owners. In 2002, a business was asked to report the percentage of ownership and gender for each of the three largest percentage owners.
Male/female ownership of a business in both 1997 and 2002 was based on the gender of the person(s) owning the majority interest in the business. However, in 2002, equally male/female ownership was based on equal shares of interest reported for businesses with male and female owners. Businesses equally male-/female-owned were tabulated and published as a separate entity in both 1997 and 2002.
1997
SWOBE/SMOBE forms may be viewed at <http://www.census.gov/epcd/www/pdf/97cs/mb1.pdf
> (corporations/partnerships) or at <http://www.census.gov/epcd/www/pdf/97cs/mb2.pdf>
(sole proprietors or self-employed individuals).
2002
SBO forms may be viewed at <http://www.census.gov/csd/sbo/sbo1.pdf>
(corporations/partnerships) or at <http://www.census.gov/csd/sbo/sbo2.pdf
> (sole proprietors or self-employed
individuals).
2. The Hispanic or Latino origin and racial response categories were updated in 2002 to meet the latest OMB guidelines. There were nineteen check-box response categories and four write-in areas on the 2002 SBO questionnaire, compared to the twenty check-box response categories and five write-in areas on the 1997 SMOBE/SWOBE.
The Hispanic or Latino origin of business ownership was defined as two groups:
· Hispanic or Latino
· Not Hispanic or Latino
The response check boxes for “Spaniard” and “Hispanic Latin American” provided in 1997 were deleted.
Five major race categories were established:
· American Indian and Alaska Native
· Asian
· Black or African American
· Native Hawaiian and Other Pacific Islander
· White
Response check boxes were added for “Samoan” and “Guamanian or Chamorro.”
The check box for “Some Other Race” and the corresponding write-in area provided in 1997 were deleted.
If the “American Indian and Alaska Native” race category was selected, the respondent was instructed to print the name of the enrolled or principal tribe.
In 1997, sole proprietors or self-employed individuals who were single filers or who filed a joint tax return were asked to mark a box to indicate the Spanish/Hispanic/Latino origin of the primary owner(s) and to mark the one box that best described the race of the primary owner(s). In 2002, they were asked to provide the percentage of ownership for the primary owner(s), his/her Spanish/Hispanic/Latino origin, and to select one or more race categories to indicate what the owner considers himself/herself to be.
The form that corporations/partnerships received in 1997 requested the percentage of ownership by Spanish/Hispanic/Latino origin of the owners. In 2002, a business was asked to report the percentage of ownership, Spanish/Hispanic/Latino origin for each of the three largest owners, and to mark one or more races to indicate what the owner considers himself/herself to be.
Business ownership in both 1997 and 2002 was based on the Hispanic or Latino origin/race of the person(s) owning majority interest in the business; however, in 2002, multiple-race reporting by the owner(s) could affect where a business is classified. Note: In the 2000 population census, 2.4 percent of the population reported more than one race.