Rudi Seljak, Metka Zaletel

1

TAX DATA AS A MEANS FOR THE ESSENTIAL REDUCTION
OF THE SHORT-TERM SURVEYS RESPONSE BURDEN

• Rudi Seljak, Metka Zaletel
• Statistical Office of the Republic of Slovenia

2
Introduction

• Through the recent years the national statistical
  institutes have been constantly confronted with
  two challenges, which are especially outstanding
  in the case of the short-term business surveys
• How to improve the timeliness of the published
  data
• How to decrease response burden and the survey
  costs
• One of the lately most frequently used ways to
  fulfill at least some of these demands is a
  convenient use of different types of
  administrative data.
• A lot of offices is in the last years exploring
  the possibilities of using the TAX data, which
  are originally used for the monthly settlement
  of the value added tax (VAT), for the purposes of
  the turnover indices estimation.

3
Introduction contd

• Statistical Office of the Republic of Slovenia
  (SORS) began to carry out the first systematic
  studies in this area in year 2005.
• In 2005 the feasibility study was carried out,
  which explored the possibilities of using the VAT
  data for the purposes of the turnover indices
  estimation in the wholesale trade activity.
• On the basis of the results of this study the
  fundaments of the new methodology were set up.
• This methodology was then adopted and applied to
  some other areas.

4
Main features of the new methodology

• One of the significant changes in the new
  methodology was the movement from the random
  sampling to the cut-off sampling procedure.
• The sampling error is replaced with the bias
  due to the omission of the part of the
  population. One of the goals of the feasibility
  study was the estimation of the range of this
  bias.
• The new methodology combines two types of data.
  For the small number of the largest units the
  classical post survey is carried out. For the
  majority of the units the VAT data are used.
  The statistical data processing is therefore
  significantly changed.

5
Feasibility study

• In the feasibility study we simulated the data
  collection process under the new methodology for
  all the months in 2003-2005 and then compared the
  new results with the originally published
  results.
• The level of the turnover sometimes differed
  essentially but the movement, expressed in the
  form of the indices, was in most cases quite
  coherent.
• As the main indicator of the coherence of the
  index time-series we used the coefficient of
  correlation. With the exception of some smaller
  domains, the coefficient was around 0.9.
• For the problematic domains we increased the
  number of units to be surveyed.

6
Comparison of time series obtained by two
different methodologies
Month-to-month indices in Wholesale Trade
activity
7
Main steps of the process

• Selection of the set of the observational units
• Selection of the set of the units to be surveyed
• Collection and editing of survey data
• Merging survey and administrative data
• Detection of outlying values by using the
  Hideroglou-Berthelot method
• Imputation for non-response
• Aggregation and calculation of processing quality
  indicators

8
Selection process

• The whole procedure is carried out in two steps.
  In the first step the units of the target
  population are determined and then in the second
  step the units for which the data will still be
  obtained by the classical survey are selected.
• In the first step the units which fulfill one of
  the following criteria are selected
• The semi-annual turnover of the unit is more than
  100,000 EUR.
• The semi-annual turnover of the unit is more than
  50,000 EUR and the unit has at least 3 employees.
• The unit has at least 6 employees.

9
Selection process contd

• For the smaller part of the units, the data is
  still obtained by the post survey.
• For the selection of the units to be surveyed,
  the target population is firstly sorted by the
  descending turnover in each of the activity
  groups.
• Then so many of the largest units of the group
  are selected that the share of the turnover of
  the selected units exceeds the target share of
  the total turnover. The target share slightly
  differs between the activity groups, but it is
  generally between 50 and 60.
• The number of units to be surveyed is
  approximately 2 of the whole target population.

10
Selection process - schematic presentation
Admin. data
Selected units
Sorted data
Units to be surveyed
Target population
Business register
Units for the admin. data
Survey data
11
Merging data from different sources

• The data are entering the process by using the
  two different channels. Each of the set of the
  data is firstly separately edited by using some
  consistency checks.
• Data from different sources are merged into one
  table and each data on turnover is assigned with
  the suitable status.
• This status contains information about the data
  collection method and the information whether the
  data was corrected through the editing process or
  not.
• The values of the status are assigned according
  to the standard 4-digit classification used at
  the SORS.

12
Merging data from different sources schematic
presentation
Survey data


13
Statistical editing

• When the data are merged together we use
  Hidiroglu-Berthelot method to detect the
  outliers.
• The methods explores the distribution of
  month-to-month growth rate to find extreme
  values.
• The main goal is to detect the extreme leaps in
  the turnover, estimated from the VAT data. These
  leaps are usually the consequence of the
  methodological difference between administrative
  and statistical data.
• Such problems mostly occur in the case when the
  enterprise sells the real property. This purchase
  money is reported to the tax authorities but it
  shouldnt be included in the turnover.

14
Imputation procedures

• In the imputation process we impute the missing
  values as well as the values which were in the
  statistical editing process designated as the
  extreme values
• Three different imputation methods are used
• Estimation of monthly data from quarterly data
  (only at the end of each quarter).
• Historical Trend Method (only for the units with
  the data from previous month).
• Mean Value method.
• For each imputed data, through the values of the
  statuses the reason for imputation as well as the
  imputation method is recorded.

15
Editing and imputation schematic presentation
Detection of outliers
Imputed data
H-B method
Imputations


16
Quality indicators

• Using the values of the statuses, where all the
  process changes were recorded, the set of
  quality indicators is automatically calculated.
• Two types of quality indicators are calculated
  micro and macro indicators.
• An example of the micro indicators is the
  imputation rate, which is defined as the rate of
  the data which have been imputed through the
  process.
• An example of the macro indicators is the
  relative difference between the index calculated
  from all the data and the index calculated from
  the non-imputed data.

17
Quality indicators contd

• All the quality indicators are calculated
  automatically and inserted into the excel
  spreadsheet template. The indicators for the last
  13 months could also be presented graphically.

18
Quality indicators contd

• One of the macro indicators compares indices,
  calculated from the whole set of data with the
  indices calculated just from the survey data
  and the indices, calculated just from the admin
  data.

19
Benefits of the new system

• The new methodology represents a radical change
  in the process of the production of the
  short-term indices.
• Although there are some deficiencies of the new
  system, the benefits far overcome them.
• The largest benefit of the new methodology is the
  essential reduction of the response burden as
  well as the reduction of the survey costs.
• To quantify the benefits of the new methodology
  we estimated the burden and cost reduction, both
  of them expressed in the man-days unit.
• The estimation was done for two areas Hotels and
  restaurants and Services.
• In the chart we present the cost and burden for
  year 2006, when the old methodology was still
  used, compared with the year 2007 when we
  launched the new methodology.

20
Respond burden and cost reduction
21
Conclusions

• SORS started to implement the new methodology for
  the estimation of the monthly turnover indices in
  2006.
• The new methodology combines two different
  sources. Survey data for smaller part and
  administrative data for larger part of the units.
  
• Allthough there are differences in the
  methodological definitions of the turnover, all
  the studies showed that the admin data could be
  well used for the purposes of the short-term
  statistics.
• The new methodology means an essential decrease
  of the costs and the response burden.
• The new methodology is planned to be widened to
  the retail trade activity in year 2008.