Much of the demographic data of interest to businesses, including the data provided by our Excel add-in CDXZipStream, is based on data from the U.S. Census Bureau. Census demographic data by zip code is especially useful, since just about everyone has a zip code associated either with their home or business address. However, if you go to the Census Bureau's American Factfinder tool and input a zip, you'll see that the data returned is for something called a "Zip Code Tabulation Area" or ZCTA. Is this really a zip code?
The short answer is – it's an approximation of a zip code. Zip codes are ever-changing geographic entities determined by the Postal Service that can cross city, state, and county lines. They are also not defined by straight-line boundaries (like a polygon) and as a result are very difficult to digitally map. To help overcome these problems, ZCTA's were developed by the Census Bureau for tabulating Census 2000 data. ZCTA's approximate zip codes by aggregating small census-defined areas called blocks, based on the majority of addresses in the area. So for most instances the ZCTA code equals the zip code for an area, but since it is an approximation, a small number of addresses may have a ZCTA code different from their zip code. And for zip codes with very low populations, there may not be a corresponding ZCTA at all.
When the results of the 2010 census are rolled out, ZCTA areas will be redefined to reflect changes in zip codes that have occurred over the past 10 years. Stay tuned as we keep you updated on the status of pending census data.
Update: Here's a short tutorial on how you can get ZCTA/ZIP code data using CDXZipStream:
You can also watch the YouTube version: ZIP Code Census Demographic Data in Microsoft Excel