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Cost analysis of key statistical products. Pieter Everaers, Director Eurostat European Commission. CCSA, Paris 29 September 2016. Value and benefits of official statistics. Value defined as ' the importance, worth, or usefulness of something' (source: the Oxford English Dictionary).
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Cost analysis of key statistical products Pieter Everaers, Director Eurostat European Commission CCSA, Paris 29 September 2016
Value and benefits of official statistics • Value defined as 'the importance, worth, or usefulness of something' (source: the Oxford English Dictionary). • The value of official statistics materialises in the trust and confidence that users have in them – societal value. • The value has a material dimension – how much does it cost?
Change of environment – new challenges for statistics • The data revolution: a digital transformation is taking place across the globe. • New metrics: globalisation has changed the world. • The future of Europe: the evolution of official statistics as a public good reflects the evolution of the society. • The price of statistics: how to cope with shrinking resources and the need to cut red tape further.
Statistics cost money, but then so do bad decisions • How to estimate, manage and reduce these costs in the production of statistics ?
Cost analysisof key statistical products - why • Recent development on Evidence based decision making – importance of official statistics/ resource constraints • Industrial process (new sources) calls for assessing cost/benefits • Justify work done – setting priorities (negative priorities) • Benchmarking (more cost efficient) • Contribution to efficiency gains and development of statistical processes
Cost assessment: Output related (=on products) Products cost per product in ESS cost structure per country
Scope of cost assessments initiatives Cost assessment on 'global' level Official statistics in the ESS • ongoing Cost analysis on 'European' cost level– by product European National • ongoing ESS countries • √ Cost/merit exercise Eurostat
Two approaches – top down and bottom up • Top down: Cost assessment of the production of official statistics in ESS covers national and European statistics • Bottom up: Cost analysis of European statistics (by products) For both : Same methodology used. Coverage: NSIs, ONAs and regional offices.
Top down approach Cost assessment of official statistics in the ESS Scope Coverage Methodology National NSIs - reference years: statistics ONAs 2012-2015 + Regional offices - accrual principal European - costs and FTE statistics Goal to have an ESS picture by mid-2017
Bottom up approach Cost-merit exercise European statistics - Phase 1 Estimated 2014 direct costs in Eurostat 74 FTE 11 mio euro 109 FTE 28 mio euro 43 mio euro 228 FTE 16 FTE Partnership within the ESS and beyond 3 mio euro
Cost-merit exercise European statistics - Phase 1Estimated total costs in Eurostat,2014
Cost-merit exercise European statistics - Phase 1Merit assessment in Eurostat • Global assessment on products by three focus groups on the following criteria: • Policy use • Legal requirements • Competitive advantage • Quality • Multi-purpose statistics Applying a 15/70/15 distribution for high/medium/ low merits • Merge the cost information with the results of the merit exercise – focus on products with high costs but low merits
European statistics - Phase 2Costs on European statistics in the ESS • First step • with 11 countries on 8 • products; • establishing • methodology
European statistics – Product list • The list ('Catalogue of products') covers more than 130 statistical products. It is annexed to the Annual Work Programme. • Statistical products – examples: • Annual national accounts • Foreign direct investment • Regional accounts • Environmental taxes • Business demography • Innovation • International trade in goods • Demography and migration • Education • Health care
European statistics' costs in ESS, • by products • 28 Member states, 4 EFTA countries, Eurostat • NSI : National Statistical Institutes. • ONA: Other national statistical authorities.
Challenges encountered • Different accounting systems in place in MSs - Lack of time registration system • Definition of 'official' statistics • Partners' involvement in the production of official statistics (NSIs, ONAs, regional offices) • Role of Central banks • Agreement on a common methodology
Benefit of cost assessment • Contributes to resource allocation, cost transparency and priority-setting • Motivates discussions on how to manage and reduce these costs in the production of statistics • Use of cost information for benchmarking