WinTIM, Indices methodology and tool Wiking Althoff, CESD Communautaire External trade experts meeting on the CARDS Programme, Luxembourg, 12-14 May 2003

Topics Introduction – What is WinTIM ? Methodology Preliminary Analysis Definition of Blocks Detection of Errors and Correction of data Calculation of indices Demonstration of WinTim Questions

Introduction What is WinTIM ? WinTim is an application that calculates external trade indices It is: Based on Eurostat methodologies for producing indices Working together and interface with Eurotrace DBMS Flexible and allows the user to define a number of parameters on which a wide range of indices are calculated Giving the user the option to manually change (or accept) automatically generated data, at the different steps of the process

Organisation of Processing Flow TIM EUROTRACE Windows Pre-analysis Definition of blocks detailed Dataset Derived dataset of indexes Detection of errors Indexes calculation COMEXT Stand-alone Browser EXCEL

Methodology Initialisation : Preliminary study and definition of blocks Monthly data uploading from Eurotrace Monthly data checking, detection/correction of extreme values using extraction of information available in aggregated banks. It will be done according to block definition Production/ Update of index databanks Display of Indexes with comext standalone package

Initialisation:Pre-analysis Correlation Test Identification of the best correlation between Value/Qty & Value/Net Weight Quality check of selected correlation Possibility to exclude wrongly correlated commodities Evaluation of the source data’s quality Creation of Sample

Blocks Initialisation Block = set of items whose elementary unit value fluctuates in an homonogeneous way. Identified by a key that stands for the various variables involved (flow, SITC,partner, reporter …) The tool will suggest an automatic definition of relevant blocks, based upon reference data. This list can be manually amended to refine automatic definitions Defined blocks will allow to verify/auto correct source data

Principles used for block definitions Aggregate raw data from the selected key (fix+variable parts) Keep most representative combinations = more than x (default 10) items in derived dataset + cumulated percentage up to y % of trade (by default: 70%) Other data are cumulated in a « OTHER » group. 70%

Detection of Errors Time series Test applied to range (t t-12 month) Tests on aggregated data UV (Pn) from predefined blocks, so that to identify potential errors (the test output lower than a user defined threshold): Seasonality: count of blanks (Missing Pn) Ratio : (Max Pn) / (Min Pn) Ratio : (Max Pn) / (Med Pn) Ratio : (Med Pn) / (Min Pn) Ratio : (Std Dev Pn) / (Avg Pn) Test applied to range (t t-12 month)

Detection of Errors ELEMENTARY UV INDEX (UVI) Prices are estimated at most detailed level (ie: for each declaring country d, partner p, flow f, CN8 product c) by calculating UV derived from source data UV d,p,f,c = Value d,p,f,c / Quantity d,p,f,c Quantity = net weight OR number of SU Elementary UV Index: UVI d,p,f,c = UV (t) d,p,f,c / UV (t-1) d,p,f,c

Detection of Errors Block Method Calculation of UVI of block items Calculation of block median UVI Detection of UVI out of range [UVI +/- Delta] Below the median is 236. Say Delta is +/-50%. Values < 118 or > 354 are out of range.

Data Correction Definition of Outliers: Normal, an outlier is a product with an UVI outside the range defined by the median of the block. The UVI will be replaced by median. Primary outlier, a product e.g. a excluded product or an extreme product that doesn’t enter into the calculation of the median. The UVI will be replaced by median. Secondary outlier, a product with an UVI outside the range defined by the median of the block. But the UVI will NOT be replaced by the median

Data Correction Correction using the block method Error corrections Automatic Replace UVI for all normal and primary outliers by the median Excluded products are automatically treated as primary outliers and automatically replaced by the median Manual Initial (source) data can be corrected (the full process must then be launched again) Override automatic results and set products as primary or secondary outliers All corrections can be saved in a list to allow corrections automation

Calculation of Indices Data selection interface (period, commodity, country… according to variables available in the derived dataset) Index calculation according to known methods (Laspeyres,Paasche, Fisher), (chained, fix) Calculation and storage of index in an Access file or export to Excel Estimation index (sum of customs value whose UVI was replaced by the median UVI/sum of all customs value for the selection) Able to see the results in Comext Browser

Calculation of Indices: Laspeyres’ Unit value index calculation:  UVIt * Valuet-1 Laspeyres’ index=  Valuet-1 Fixed Weight on the base period Compare (see the evolution) in the time the change of the prices of a fixed consumption basket

Calculation of Indices: Paasche’s Unit value index calculation  Valuet Paasche’s Index =  UVI t –1 * Valuet Weight on current period Compare (see the evolution) of a variable consumption basket according to the calculation year

Calculation of Indices: Fisher-Volume Fisher’s Index =  Laspeyres’ * Paasche’s Value Index :  Valuet /  Valuet-1 Laspeyres, Paasche and Fisher volume indices are derived from the value index and the unit value index Laspeyres’ Volume Index = Value Index / Paasche’s Unit value Index Paasche’s Volume Index = Value Index / Laspeyres’ Unit value Index Fisher’s Volume Index =  Laspeyres’ * Paasche’s

Calculation of Indices Chain –Fix Index Fixed base : Each indice is calculated according to the reference period. This kind of index are well adapted to short terms studies as the weight year becomes less up to date in time and does not reflect the current situation. Chain : Each indice is calculated according to the previous Year/month index. With this regular change of reference period, series of synthetic chained indices can be obtained and « connected » C3/0 = C3/2 * C2/1 * C1/0

Demonstration

Questions