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County:
Both county level and ZIP-code level demography have their strengths and weaknesses, which are summarized here. However, the over-riding consideration is the size of the area from which you can reasonably expect to draw customers. In a metropolitan area, where one large city is also a single county, it is unlikely that a new business will attract customers from the entire metropolitan area. One ZIP area or a combination of ZIP areas may be more relevant.
There are two technical advantages to county level analyses. 1) The sampling for the non-census years for counties is larger and, thus, the statistics used in our analysis are likely to contain a smaller statistical error than for ZIP areas. 2) County level data is directly available from the primary sources and estimates and do not have to be derived by joining and splitting census blocks. This also helps reduce error, even though such errors are small.
A single county level report is normally sufficient and is therefore less expensive ($150) than multiple ZIP area reports.
But again, the primary consideration is the size of the area from which you can reasonably expect to attract customers.
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ZIP:
Zip area demography is smaller and, therefore, better targeted and more precise than county demography. Generally speaking, except for very rural areas, a combination of ZIP area reports conveys more useful information than County reports --especially for new businesses with a limited beginning customer base. One ZIP area report costs the same as a county report ($150), but multiple ZIP area reports cost less per report. See pricing.
ZIP data is derived from the combining and splitting of census block data -- which introduces another source of statistical error. The boundaries of ZIP areas do not exactly correspond to any combination of census blocks. Thus, every block that lies both within and without the ZIP area has to be split and apportioned to two ZIP codes using a special algorithm. It is believed, but unproven, that this introduces only a small error.
As emphasized in the adjacent panel, the over-riding consideration is the size of the area from which you can reasonably expect to draw customers. If you plan to set up business in a metropolitan area with small ZIP codes, it is probably inappropriate to use a single ZIP report or a county-wide report.
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