We’ve just added a new free CDXZipStream template, downloadable from our website, which identifies census tract FIPS codes for a list of address locations.  CDXZipStream is our Microsoft Excel add-in that performs address, zip code, and geographic analysis, including route optimization, geocoding, zip code radius calculations, and address verification.

A FIPS code is a unique 11-digit code assigned to each census tract by the U.S. Census Bureau, and identifying the FIPS code for a given address allows us to tap into the wealth of demographic information available from surveys such as the ten-year U.S. Census and annual American Community Survey.  Since census tracts are on average only about half the size of zip code areas, they provide a much more accurate demographic picture of the population surrounding a given address.  For more information about FIPS, please refer to our recent blog post All About FIPS Codes.

To use the template:  You will need to install CDXZipStream (MapPoint version or higher), Microsoft MapPoint, and also have access to an internet connection.  The template is also compatible with both trial versions of CDXZipStream and MapPoint.   Just copy and paste your list of addresses to the template, and press the button “Get FIPS”.  CDXZipStream works with Microsoft MapPoint to geocode each address (get its latitude and longitude); this data is then used to pinpoint the specific census tract where each address is located, using an FCC application programming interface.  Currently the template is limited to identifying FIPS codes for a maximum of 5000 addresses at a time.  If necessary you can run the template more than once if you have more than 5000 addresses to analyze.

Since CDXZipStream looks to match each listed address to a location in MapPoint, the match quality is also evaluated.  Match types are:

1. Exact - A unique entry was found in MapPoint for this address.

2. Allow Ambiguous - The first of at least two matching entries was found in MapPoint.

3. Best Match - MapPoint did not find a good match, but here is the best of possible alternatives.

4. Zip Code - MapPoint could not find any matches, the centroid of the zip code is returned from CDXZipStream

Since only match types Exact and Allow Ambiguous represent good matches, FIPS codes are only returned for these types.  Address information for other matches should be checked for misspellings, zip code mismatches, or other errors.  Consequently the template provides a method for address verification along with FIPS census tract identification.

Data from the U.S. Census Bureau is an indispensible source of demographic information that helps businesses, non-profits, and even the smallest mom-and-pop store plan, market, and ultimately reach their target audience.  But there are limitations to the data, particularly for smaller geographies, that should be considered before making any critical demographics-related decisions.

Since participation rates for census surveys are never 100%, there will always be some error associated with demographics estimates.  For example, the American Community Survey samples about 2% of American households every year, and the accuracy of the estimates can vary significantly, especially for geographic areas where populations are small and sampling error can be large.  Here are some results from the latest 5-year data set from the ACS covering the years 2005-2009:

The error results for the American Community Survey are all for 90% margin of error, meaning that there is 90% confidence that the true result lies within the margin of error around the estimate.  For instance, for Albany County, there is 90% confidence that the median income is $55,350 plus or minus $1,061; this means the actual 90% confidence range is $54,289 - $56,411.  Even with this level of error, however, the median income estimates for Albany County, Albany city, and Census Tract 2 are significantly different from a statistical point of view, since there is no overlap when including the margin of error for each estimate. 

In the case below, involving all small census tract geographies, the picture is not so clear:

Since the margin of error is so large for Census Tract 4.01, we cannot be confident that the true median income is statistically different from Census Tract 1.  The estimate ranges, including the margin of error, overlap for Census Tracts 1 and 4.01, even though the estimate values ($37,619 versus $62,039) are quite different. We can say with confidence, however, that the median income for Census Tract 2 is statistically different from Census Tract 4.01 since the estimate ranges do not overlap.  It certainly helps in this case that the margin of error for Census tract 2 is relatively small for this geography.

It's easy to cherry-pick data like this to show how the margin of error effects how we interpret the results, but the fact remains that survey error can be an important part of data interpretation particularly for cases where the error is large.  When important decisions need to be made based on demographics, margin of error should always be part of the analysis.

Demographic data as provided in our products CDXZipStream and CDXStreamer is based on various census geographies.  But what do we really mean here by "geography"?  It's really just the way the U.S. Census defines a geographic area in the United States, and many census geographies, such as states and counties, we're already pretty familiar with.  However, have you ever heard of a Census Designated Place, or CDP?  How about a Core-Based Statistical Area, or CBSA?  If you're interested in using demographic data to find a location for your business, design a marketing program, or even perform academic research, you may find these less well-known geographies useful.

The most basic census geography is the census block, which is well-named since it is the building block for just about all other geographies.  For the 2010 census there are over 11 million census blocks covering the U.S., the District of Columbia, and Puerto Rico.  Since it is the smallest geography, census blocks can be grouped together to form larger geographies such as counties, states, and regions.  Here's a helpful diagram provided by the Census Bureau, with the smallest geographies at the bottom, and the largest geographies at the top:

Census blocks are typically defined by physical features like roads or rivers, and other boundaries such as city limits or property lines.  They can correspond to individual city blocks, but in rural areas may cover much larger areas.  Population is also a factor; the average size nationally of a census block is about 100 people.

Here are some other census-specific geographies of interest:

Census tracts are geographic units representing urban or rural neighborhood-like communities, and are made up of adjoining census blocks.  Census tracts, like blocks, usually coincide with the limits of cities, towns or other administrative areas, and several tracts commonly exist within a county. There are just over 66,000 census tracts covering the U.S., with an average population of about 4,000.  Census tracts can be extremely useful for demographic analysis since they are fairly stable, well-defined entities that are large enough to get statistically-significant data, but small enough to see a unique picture of the community.

Places are a catch-all geography that lumps together a wide variety of communities such as cities, towns, boroughs, townships, villages, and municipalities. This category also includes CDP's  (Census Designated Places) which are populated communities that do not have a local government and are not incorporated. Examples include small rural areas and unincoporated retirement communities.  Using census data for "places" can be particularly useful for smaller communities where the population is fairly homogenous, but for large cities such as New York, demographics by place can provide only a limited picture of a very diverse population.

Core-Based Statistical Areas are urban areas with a population of at least 10,000. CBSA's are defined by the U.S. Office of Management and Budget, and are determined more by social and economic ties within an area, rather than physical or political boundaries.  As a result, they can cover multiple counties, cities, and even states.  There are currently 955 CBSA's in the U.S., which are grouped according to population.  An area with a population between 10,000 and 50,000 is a Micropolitan Statistical Area, and an area with a population greater than 50,000 is a Metropolitan Statistical Area.   Since CBSA's are a truly functional geography that reflect where people live and work, they can provide a very unique demographic perspective on the area.

Zip Code Tabulation Areas, or ZCTA's, are the Census Bureau's version of zip codes, and were first developed for tabulating Census 2000 data.  ZCTA's approximate zip code areas by aggregating census blocks.  But since zip  codes as defined by the U.S. Postal Service are ever-changing and do not follow census boundaries, there will always be some discrepencies between the two.  ZCTA's of course are extremely useful since they can easily be linked to a mailing address, but it should be recognized that ZCTA's and zip codes are not exactly the same thing.  One of our recent blog posts reviews ZCTA's in more detail.

For more information about census geographies, here are some good resources:

Reference Resources for Understanding Census Bureau Geography

Census Bureau Geography

Metropolitan and Micropolitan Statistical Areas

Zip Code Tabulation Areas