Diapositiva 1

1
NTTS 2009 New Techniques and Technologies for
Statistics 18-20 February 2009 Check, edit
and imputation of the variable turnover of the
Italian Business Register
Speaker Viviana De Giorgi (Istat)
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Check, edit and imputation of the variable
turnover of the Italian Business Register
Contents Keywords Background and
motivations The procedure Conclusions
Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register
Keywords
administrative sources outliers
detection data editing
Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register
Keywords

• ASIA
• (Statistical Archive of Active Enterprises)
  Italian Business Register.
• Vat returns
• Administrative source of annual statements of VAT
  payments, provided by the Italian Tax Authority.
• Sector Studies
• Administrative source of the annual survey on
  business economic sectors carried out by the Tax
  Authority.
• Istat Business Surveys
• Annual Survey on Large Enterprises Accounts
  System (total)
• Annual Survey on Small and Medium-sized
  Enterprises (sample)

Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register

• A new need to improve the quality of the business
  register
• In 2005, working on the data of the taxation year
  2003, a new need arises making the variable
  turnover available for dissemination.
• In fact, until then, data from the VAT returns
  had been used for the ASIA units, without any
  processing, only for internal use.
• The study implies
• analysis of the available sources and data,
• analysis of the available category of
  enterprises, including missing values analyses
• analysis of the method for imputing missing and
  non-correct values
• Missing, zero and non-correct values are to be
  checked and imputed in order to obtain comparable
  and consistent data.

Background
Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register
Background
Available procedures for editing and imputation
of numerical data Automatic procedures for
identifying invalid data, such as the
Hidiroglou-Berthelot algorithm, which had not
given good results in the case of the ASIA
turnover. Software for editing and imputation of
numerical data, such as the BANFF Sas
application. Its implementation requires edits on
the basis of numerical variables and in the case
of ASIA we have only few variables to build
effective rules for the turnover. An ad hoc
procedure, which can better fit data and is the
solution here proposed.
Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register

• Available sources in Istat
• Sector Studies
• Annual VAT returns
• Istat Business Surveys

Background
Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register

• Sector Studies
• Instituted by the Tax Authority in 1996 in order
  to evaluate the capacity of the enterprises to
  produce income and knowing whether they pay
  taxes, they are a source of great interest as
  they gather a lot information on about 3.5
  million enterprises. The subjects liable to
  Sector Studies are industrial commercial and
  manufacturing income owners and VAT number
  proprietors, with some exclusion principles (e.g.
  the turnover threshold and the activity type and
  time).
• Financial information retrievable from the Sector
  Studies
• Volume of business
• Proceeds
• Agios and Income from the Sales of Goods Subject
  to Fixed Revenue
• Other Proceeds
• Other Positive Income Components
• Other Operations that Produce Income

Background
Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register
Annual VAT returns Only the variable called
Volume of Business is available. The definition
is the same as the Sector Studies one. The VAT
statement is declared by (almost) all the Italian
enterprises (excluding some activities that are
not subject to declaration). Istat Business
Surveys These surveys provide for the variable
named Proceeds, whose definition is the same as
the Sector Studies variable. A part from the
survey on large enterprises whose values are
integrated in the imputation phase, Istat has
only sample data on enterprise turnover, and they
are used here mainly in the outcomes assessment
phase. Other Istat turnover sample surveys are
non taken into consideration.
Background
Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register

• Which source and variable?
• Notwithstanding both the VAT returns and the
  Sector Studies provide for turnover time series
  we have chosen the variable called Volume of
  Business from the VAT returns to be used for
  imputing values and the same variable from the
  Sector Studies to be used as a cross check
  variable.
• Why?
• The VAT statements are declared by (almost) all
  Italian Enterprises whereas the Sector Studies
  are a partial survey.
• The same variable is also in the Sector Studies
  source and it can be used for cross checks.
• The VAT returns are less subject to laws and
  directions than Sector Studies.
• From a statistical point of view the VAT returns
  missing data can be considered MAR.

Background
Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register

• The ASIA turnover imputation procedure
• Characteristics
• It is an ad hoc procedure.
• It has been running since the taxation period
  2004 after an experimental period of one year.
• It combines administrative and statistical
  sources information, to provide non zero values
  for (almost) all the ASIA units.
• It consists of 5 steps, strictly in sequence.
• The ASIA turnover, available for all the ASIA
  units, is being disseminated by classes

Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register

• The procedure
• identification of the enterprises set to be
  checked, imputed and validated (reference set)
• identification of the existence set of turnover
  permitted values (turnover range)
• data editing through 3-year time series
  consistency (outliers detection)
• missing zero and outliers imputation
• data validation using external indicators
  (outcomes assessment)

Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register

• Step 1 Reference set
• All the following steps work on the enterprises
  active for at least six months of all economic
  activity sectors in the Istat business surveys
  with the exception of
• divisions 65 (Financial intermediation) and 66
  (Insurance and pension funding) not in Istat
  surveys
• divisions 85 ( Health and Social Work) and 67
  (Activities auxiliary to financial
  intermediation) not liable to VAT
• divisions with very few enterprises (Mining) non
  effective characteristics values
• enterprises that have suffered a
  merger/acquisition event whit a non-zero turnover
  value
• Enterprises excluded will have a value of
  turnover (including zero and missing values) as
  declared in the Volume of Business of the VAT
  statement.
• NACE rev. 1.1

The procedure
Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register

• Step 2 Turnover range
• ASIA previous year turnover bounds are used the
  minimum and maximum values by economic activity
  division of the previous year data serve as a
  band-pass filter, determining the following sets
• set P (permitted values) contains all the values
  within the band-pass filter
• set NP (non permitted values) consists of all
  the values outsides the bounds
• Previous year data (checked and imputed)
• are considered correct
• are capable of managing the turnover short term
  variability

The procedure
Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register

• Step 3 Data editing for outliers detection
• Use of the Sector Studies current year data as a
  cross check variable
• Use of changes in value in the last three years
  of
• turnover
• turnover per capita
• Different rules (bounds) for set P and set NP to
  calculate consistent and non-consistent changes
  in value by economic activity groups (3 digits)
• Use of a three-element binary vector to identify
• current year non-correct values (to be imputed)
• previous year non-correct values (to be excluded
  in the imputation step)
• Missing and zero values are beforehand considered
  non-correct (outlier)
• definition from now on
• outlier is a zero, missing or non correct value

The procedure
Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register

• Step 4 Outliers imputation
• (The large enterprises values are automatically
  replaced by the Istat enterprise survey ones,
  without any checks. Survey data are supposed to
  be correct. They are already checked and revised
  in the survey.)
• The enterprises with a non correct current year
  value are divided into
• enterprises whose previous year data is non
  correct their values are imputed with a mean
  value imputation
• enterprises whose previous year is correct their
  values are imputed with a previous year
  imputation

The procedure
Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register
Mean value imputation multiplication of the
number of employed persons by the average
turnover per capita of the group the enterprise
belongs (all data refer to the current year).
The procedure
Previous year imputation multiplication of the
number of employed persons by the sum of the
previous year turnover per capita and the
previous year turnover per capita multiplied by
the change in value between the last two years.

• itk is the imputed turnover in the current year
• tpcxyk is the current year turnover per capita of
  the activity groups (3-digit) or division
  (2-digits) x and the class of employed persons y
  (group xy)
• ek is the number of persons an enterprise employs
  in the year k
• tk is the turnover an enterprise obtained in the
  previous year
• ?tpcxy is the percentages turnover change in
  value that occurs in the group xy between the
  previous and the current years

Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register

• Step 5 Outcomes assessment
• Comparing 1) Istat surveys and ASIA data
• 2) ASIA previous and current
  year data
• by economic activity and class of persons
  employed through
• by group absolute differences and/or ratios of
  the number of enterprises
• by group absolute differences and/or ratios of
  the number of persons employed
• by group differences of the amount of turnover
  between ASIA and the Istat surveys, before and
  after the imputation process
• by group amount of imputed turnover and
  percentages of imputed enterprises, for both all
  the values and only missing and zero values
• by group average values, before and after data
  imputation
• Index 1 and 2 could be quite different from zero
  as the enterprise survey universe is an expansion
  by mean of sample coefficients index 3, 4 and 5
  are useful to understand the data quality
  improvement.

The procedure
Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register

• Conclusions
• Every year
• about 3 of data are missing or zero values (the
  percentage decreased drastically in 1999)
• about 2 of data are non correct values
• only very few enterprises register a previous
  year non correct value (to not use in the
  previous year imputation)
• few ad hoc studies are necessary, and it depends
  on the available data and the reference year
  (e.g. Aeolian power enterprises in the year 2004)
• The procedure preserves time series consistency
  and comparisons, punctual data are available for
  internal uses, e.g. National Accounts and
  surveys, macro-data dissemination is possible by
  classes of turnover.

Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register

• Future developments
• As the activities liable to the Sector Studies
  has been increasing year by year, above all due
  to the inclusion of more activities and the
  rising of turnover thresholds, we are thinking
  about rebuilding the process, substituting the
  Volume of the business with the Proceeds coming
  from the Sector Studies, in order to
• make the use of Sector Studies information more
  effective
• Improve integration of the VAT returns and the
  Sector Studies
• make the ASIA turnover more comparable with Istat
  surveys data
• build up an effective imputation for economic
  activities non liable to VAT

Viviana De Giorgi NTTS 2009 Brussels, 18-20
February 2009
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Check, edit and imputation of the variable
turnover of the Italian Business Register
REFERENCES Bernardi A., Cerroni F., De Giorgi V.
(2008). The Tax Authority Source as an example of
the use of an administrative source as a
statistical one. Contributed Paper of IAOS
Conference on Reshaping Official Statistics.
Shanghai, 14-16 October 2008. Hidiroglou, M.A.,
Berthelot, J.-M. (1986). Statistical Editing and
Imputation for Periodic Business Surveys. Survey
Methodology, vol. 12, n. 1, 73-83. Italian DPR n.
633/72 on VAT returns (Italian). Sector Studies
filling in instructions. Document retrievable on
the Italian Tax Authority Internet site
http//www.agenziaentrate.gov.it
(Italian). Statistics Canada - BANFF Support Team
(2005). Functional Description of the Banff
System for Edit and Imputation System. Quality
Assurance and Generalized Systems Section
Technical Report. TUIR Italian consolidated act
on income taxes (Italian). VAT returns filling
in instructions. Document retrievable on the
Italian Tax Authority Internet site
http//www.agenziaentrate.gov.it (Italian).
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Thank you for your attention!
for further information viviana.degiorgi_at_istat.it