Annual growth rates derived from short term statistics and annual business statistics

1. Annual growth rates derived from short term statistics and annual business statistics Dr. Pieter A. Vlag, Dr. K. van Bemmel Department of Business Statistics, STATISTICS NETHERLANDS (CBS)

2. Starting Point 2003: systematic higher annual growth rates derived from annual structural business statistics than from short term statistics

3. STS versus SBS • Similar for short term and annual statistics • enterprises >= 50 employees: complete enumeration • Different for short term and annual statistics • enterprises < 50 employees • 1. Short term survey (panel) • Annual survey (independent) • Short term • TO SMOOTH irregularities in MM-growth rates weighted to a population1 corrected for administrative changes between two successive periods • Annual • weighted to ‘real’ populations

4. STS important points • Strata (NACE x size): • Yk = S (wi yi ) with wi=N/n • -------------------------------------------------------------- • Publication (NACE) : • Turnover (estimate) YT = S (Yk) • Index : IT= IT-1 * (YT/ YT-1) • CHAIN INDEX !!

5. Main explanation: panel approach in short term statistics

6. Formula index • IT = IBASE * ( Y2/Y1) * (Y3/Y2’) * (Y4/Y3’) • ………………… * (YT-1/YT-2’) * (YT/YT-1’) • = IBASE * B * ( YT/Y1) • With B = (Y2/Y2’) * (Y3/Y3’) ….. * (YT-1/YT-1’) • B = measure for bias

7. Main explanation: panel approach in short term statistics B = 0,982

8. Results Approach 1 Retail trade ; annual growth rates at detailed publication levels (2003 -2004) original STS (%) adjusted STS (%) Small aggregates significant different results between “original” STS and “adjusted”STS. Reason: survey too small

9. CONCLUSIONS • Number of enterprises with less than 50 employees in The Netherlands • 460.000 • Survey: short term statistics 29.000 • Survey: annual business statistics 85.000 • DUE TO THE SMALL SURVEY SIZE: • Always a trade off between bias and variance. • LESSON LEARNED: order of bias should be known when taking a new methodology into production

10. New developments2006: New business register • Characteristics of the new register • Better adjustment between statistical enterprise units and fiscal enterprise units • _____________________________________ • Strategy of Statistics Netherlands • -> investigating whether growth rates of turnover can be derived from VAT.

11. Approach • Enterprises with more than 50 employees • Data collection by Statistics Netherlands (complete enumeration) • Enterprises with 50 or more employees • Growth rates in turnover derived from VAT (statistics: register-based) MONTHLY GROWTH RATE PREDICTS QUARTERLY GROWTH RATE QUARTERLY GROWTH RATE PREDICTS ANNUAL GROWTH RATE

12. turnover covered by data (4th quarter 2006)

13. Pittfalls

14. Methodology

15. First results: similar seasonal patterns

16. First results: annual growth rates Expectation: no bias between annual growth rates derived from STS (future) and SBS (future)

17. First Results: pittfallsadjustments in monthly growth rates BIAS: between estimates after 30 days and after 60 days -> further investigation needed.

18. CONCLUSIONS • IN CURRENT SITUATION • Different in annual growth rates derived from STS and SBS are related to a different methodology • Due to small sampling size: Always a trade off between bias and variance • FUTURE • Using VAT-data for small enterprises eliminates the • “variance” problem • - By using VAT-data research is focussed on • determining reliable monthly growth rates (bias/variance) • influence of VAT – specific regulations (bias/variance) • quality (current vs. future) (bias/variance) other variables (annual business statistics)