The Value of Reliable Statistics

More Information: https://ecommons.cornell.edu/entities/publication/f8219318-bec3-4614-9137-55f7a2df37ab

News Stories: https://news.cornell.edu/stories/2026/05/businesses-investors-flying-blind-when-trust-government-statistics-declines

Abstract

On August 1, 2025, President Trump fired the head of the U.S. Bureau of Labor Statistics (BLS) and claimed that the agency's data were "rigged". In the aftermath, measures of economic policy uncertainty rose sharply, consistent with the idea that reduced trust in official data increases uncertainty for investors, businesses, and households. We use an event-study design to estimate the effect of the firing on policy uncertainty, and then map that increase in uncertainty into implied macroeconomic outcomes. This yields a back-of-the-envelope estimate of the marginal value of public trust in official statistics. Our baseline estimate implies that preserving trust in the integrity and quality of official statistics generates economic benefits of about 25 dollars for every dollar spent on the agency's budget.