The standards governing the definition of metropolitan areas have been changed by the federal government’s Office of Management and Budget. Soon, Economy.com will be reporting all of its historical and forecast data series by the new metropolitan area definitions. The changes made by the OMB, as a result of new Census data, are widespread and will affect nearly all users of regional economic data. This letter will:

1. Lay out what those changes are;
2. How they will affect regional data reported by various government agencies;
3. How these changes will affect Economy.com’s products, including data and publications, which incorporate regional data.

Steve G. Cochrane Managing Director

Sophia Koropeckyj Managing Director

The following items should help you in the transition from the old to the new metro areas.   Excel sheet: MSA Mapping. PDF file: OMB Metro Definitions.

 

1. What do the changes involve?
   
   
2. How do these changes affect the analysis of metropolitan area data?
   
   
3. How do these changes affect Economy.com products that incorporate U.S. regional data?
   
   
4. Questions?
   
   
   

I. What do the changes involve?

The changes involve the regrouping of counties into a greater number of metropolitan areas. This occurs for two reasons. The first is due to definitional changes. The second is due to the incorporation of 2000 census data into the metro area definitions. It is important to note that counties remain the basic building blocks for metropolitan areas. This will be true even in New England, where previously MSAs were built up from towns.

A metropolitan statistical area is defined as a county or group of counties that has at least one urbanized area of 50,000 or more population, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties. This definition is not significantly different from the 1990 definition.

Further, if these criteria are met, an MSA containing a single core with a population of 2.5 million or more may be subdivided to form smaller groupings of counties referred to as metropolitan divisions. This concept is new, although it has an analog in the old definitions in which Primary MSAs were combined into Consolidated MSAs. These terms, however, will no longer be used.

The primary change comes from the application of 2000 census data to the definitions for metro areas. Five basic changes have occurred:

1. Expansion of major urbanized areas has caused additional counties to be added to many existing metro areas.



2. Growth of formerly non-metropolitan counties has created new metropolitan areas where none were defined before.



3. Reexamination of the size of urbanized areas and the commuting patterns between them has caused some metropolitan areas to be split into separate MSAs.



4. Conversely, some neighboring MSAs have been combined into other metro areas.



5. Where large neighboring MSAs have been combined into a single MSA, Metropolitan divisions have been identified that, to a certain extent, reflect the old individual MSAs.

An Excel sheet is available to subscribers at MyEconomy.com that includes a comparative list of the old and new metro areas and their component counties. This list will allow users to clearly identify each metro area and understand the changes between old and new definitions.

II. How do these changes affect the analysis of metropolitan area data?

1. There will be more metropolitan areas covering more territory of the U.S. In our historical database, you will find 49 new MSAs for a total of 362. Additionally, where data exist, you will find four additional Puerto Rican MSAs for a total of eight. Further, there will be data for 29 Metropolitan Divisions (MDs). Currently, some data already are being reported by the new definitions, and any data that we receive at the county level are now aggregated into both old and new definitions. The last major component of metro area data to be converted to the new definitions is labor market data from the BLS. Labor market data will be converted in March.



2. There are many name changes to existing MSAs. The names of the central urbanized areas are now more frequently used to name MSAs and MDs. County names are avoided. Thus, the former Orange County CA MSA is now the Santa Ana-Anaheim-Irvine CA MD.



3. The codes used in our databases to identify metro areas will be changed to reflect the new names. These names and codes are available in the spreadsheet referenced above.



4. With this change, 83% of the U.S. population resides within the new metropolitan areas, as opposed to 80% using the old definition. Similarly, the new definition raises the number of metropolitan counties to 1,090 from 847. Thus, any analytical work that involves all metropolitan areas will include significantly more territory than before.



5. Economy.com is now in the process of creating new metro area forecasting models for all of the MSAs and MDs under the new definition. Our March forecast will incorporate the redefined labor market data and all forecasts will be converted to the new metropolitan areas at that time. All new MSAs and MDs will be forecasted. Thus, if you access metro area forecast data, you will need to know the new metro area names or their codes, depending on how you access the data.



6. Unlike the universal changeover to all new areas in the forecast database, the conversion of our Précis Metro publication will be phased in through the remainder of the year (see below).

III. How do these changes affect Economy.com products that incorporate U.S. regional data?

Précis Metro®
Make-A-Précis

Economy.com will phase in the coverage of the new metro areas. Starting in March 2005, 345 areas (an increase of 20) will be covered. Due to these changes, the March Précis Metro may not be available until the second week of April. As before, 100 areas will be offered in the four editions of the print Précis Metro. The remaining areas will be available online. The 345 areas roughly correspond to the existing MSAs and include 316 MSAs and 29 MDs.

As a result of the changes, 97 of the 100 areas included in the print Précis Metro will continue to be covered, although with the new definitions. In instances where a metro area has been broken into parts, the largest MSA or Division will be covered. Therefore, the name of the MSA may be unchanged but its geographic components, and hence data and scope of analysis, will be different. For example, only the Grand Rapids MI MSA will be included; Muskegon and Holland MSAs will be available electronically as stand alone metro area reports within Make-A-Précis.

In the Northeast, three New Jersey metro areas by the old definitions have been subsumed into redefined areas. Bergen-Passaic and Jersey City now are part of the New York-Wayne-White Plains NY-NJ metropolitan division and Monmouth-Ocean is now part of the Edison NJ metropolitan division. Thus, they will be replaced in the Northeast print version of Précis Metro by Bethesda-Frederick-Gaithersburg MD metropolitan division, Bridgeport-Stamford-Norwalk CT metropolitan division and Camden NJ metropolitan division.

The OMB has also created 42 brand new MSAs, whose component counties previously were not part of any MSA. Economy.com will begin to cover these areas in Make-A-Précis in the fall of 2005.

Clients who subscribe to Make-A-Précis may continue to pick the areas that they wish to subscribe to from the universe of metro areas (345 in March, with an additional 42 coming this fall.)

Clients who subscribe to print products may wish to take this opportunity to switch to Make-A-Précis to gain flexibility in choosing which areas they wish to receive.

Clients who wish to add the newly covered areas to their subscription should contact their Economy.com representative or call our help desk at 866.275.3266.

Metro Forecast Databases

Beginning with our March forecast updates, our databases will adopt the new metro area definitions. MSFOR, the metro area forecast database, will include forecasts for the 345 metro areas and divisions that are analogous to the current metro area definitions. This ensures nearly identical geographic coverage for all MSFOR subscribers. Coverage of the 42 newly created MSAs is available for a small additional fee.

The detailed employment/output/wage databases will also adopt the new metro area definitions. These databases will include all of the redefined metro areas and divisions.

An important point for database users is that it will be necessary to refer to the MSAs and divisions by their new geographical codes. The Excel sheet referenced earlier includes all of the new metro area codes.

DataBuffet® (historical databases)

Economy.com’s historical databases will, when possible, store metropolitan area data in both the new and old definitions. The availability of series in either form will depend on the underlying source. Economy.com will make the data available as soon as the source provides it and in the form that they provide it. In some cases, Economy.com may aggregate county level data to both definitions.

When will the various series in the Buffet be available using the new metropolitan definitions? Some data providers have already released data based on the new definitions. These series include: Bankruptcies, Employment (BEA Definition), Population (Components of Change), Residential Permits, Income by Sector, Labor Force Survey, Covered Wages by Industry, Covered Employment by Industry (Employment, Number of Establishments), and Population Estimates. A list of the expected release dates for the most frequently used metropolitan series is available at our website (www.economy.com/databuffet).

IV. Questions?

As always, if you have any questions about this transition, please do not hesitate to contact us at help@economy.com or 866.275.3266. We will make sure that all your questions are answered.

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