Loss Function and Benefit Measurement

Abstract

The allocation of funds by formula is a major use of data collected by statistical agencies. As stated, the original General Revenue Sharing (GRS) program distributed more than $30 billion from 1972 to 1976 to 51 state governments (including the District of Columbia) and nearly 39,000 local governments. The allocations were made over time in six or twelve month “entitlement periods”, with the total allocation in each entitlement period fixed (except for possible minor adjustments) by law. To determine the relative sizes of shares of the pie, GRS relied on formulas depending on values of data elements such as population, per capita income, and income tax collections. Appendix B describes the formulas in more detail.