Studying Business Ownership from the Household Side

In studying entrepreneurship, one typically has to make a choice of orientations — to study through the business, to study through the household, or to study through an intermediary (like a venture capital fund). 

Most of the time, I deal with data that comes from the business, like with the Kauffman Firm Survey, but this week I will be offering three posts on recent data updates that have been looking at entrepreneurship through household surveys. 

Household surveys, as a mechanism for studying entrepreneurship, commonly measure self-employment as a means of quantifying individual-level entrepreneurial activities. Self-employment is convenient, although not typically ideal, in that it is somewhat internationally comparable and in most official statistics have included self-employment response options for years. Each household survey I will focus on this week is extending beyond self-employment to offer new and different means of looking at entrepreneurship, still using household frames.

While I have blogged on the Federal Reserve’s Survey of Consumer Finance before (see summary of 2007 and 2010 changes), I haven’t touched upon their efforts to create a panel of households. 

While I am sure the Fed has had the idea to do a household panel before (panel data is more helpful to many scholars/analysis), it is amazing what an impetus like the Crisis can do to take a concept and turn it into a reality. Their panel data will consist of 2 points in time as their 2007 respondents were resurveyed in 2009. 

To date, the Fed has only released a summary paper analyzing the 2007 SCF panel. In this paper the Fed highlights the important role that changes in business equity, along with values of homes and stock, appear to have on driving household wealth.

The Fed has only done a portion of what could be done in looking into these topics with such rich data. But good news — they know this! From my conversations with the Fed, it appears they are likely to release a public-use data file for the panel data at some point in late 2011 or early 2012. This should be a very interesting file for researchers interested in examining financing activities during this Crisis period and quite unique among data available.

Additionally, I wanted to blog on this anticipated data opportunity as it fits well with a recent call for funding issued by the National Bureau of Economic Research. To my knowledge no other forthcoming data set presents such a ready-made opportunity for studying household financing with a details on business equity included that has a longitudinal component. 

NBER Household Finance Working Group
Call for Research Proposals 2011

The Household Finance (HF) Working Group at the National Bureau of Economic Research aims to advance understanding of household financial behavior and to provide a firm foundation for related policy discussions. The working group defines household finance broadly, to include the many financial decisions made by households, including the financial functions of payments, saving and investing/portfolio-choice, borrowing/credit, and risk management, as well as related decisions by businesses and government.

In addition to sponsoring conferences that bring together the various researchers working on household finance, the working group seeks to promote new research in the field, especially by young researchers.  To this end, through a generous grant from the Sloan Foundation, we can provide four to five research grants, of $10,000-$20,000 each, directly supporting household finance projects. These grants can be applied only to non-salary costs (e.g., travel, data, research assistants, etc). Applications are especially welcome from untenured faculty members and advanced doctoral students, and for projects that would eventually generate public data that could also be used by other researchers.

Applicants should submit: a research proposal not to exceed 2 pages; a 1-page itemized budget (e.g., travel, data, etc), with brief justification as appropriate; and their curriculum vitae. These components should be complied into a single pdf file and emailed to Denis Healy at dhealy@nber.org, with "HF research grant" in the subject line.

In cases where a substantial part of a grant goes towards data collection or production, grantees will be encouraged to make the resulting data publicly available to the extent possible, e.g., without violating confidentiality agreements, and to briefly discuss this possibility in the proposal.

Applications from doctoral students should be accompanied by a one-page letter of recommendation from a senior researcher who is knowledgeable about the project (and ideally, but not necessarily, an NBER affiliate). This letter can be emailed separately to the above address, again with "HF research grant" in the subject line (or the letter writer can submit the entire proposal in one email).

The application deadline is October 17, 2011. Applicants will be notified by early December.

Grantees will be required to deliver a preliminary working paper by August 15, 2012, and should be prepared to present the resulting research at a subsequent working group meeting (in Fall 2012 or later), if selected by the conference organizers. A complete working paper will be due by December 1, 2012.

Please direct any questions to Denis Healy at 617-588-0312 or dhealy@nber.org. More information about the HF working group can be found at http://www.nber.org/workinggroups/hf/hf.html

 

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e.j. reedy data maven

E. J. Reedy

As a director in Research and Policy, E.J. Reedy oversees the Ewing Marion Kauffman Foundation’s research initiatives related to education, human capital development, and data.

Since joining the Kauffman Foundation in 2003, Reedy has been significantly involved in the coordination of the Foundation’s entrepreneurship and innovation data-related initiatives, including the Kauffman Firm Survey, for which he served as a principal investigator, and the Foundation’s multi-year series of symposiums on data, as well as many web-related projects and initiatives. He is a globally recognized expert in entrepreneurship and innovation measurement and has consulted for a variety of agencies.