The new HBS Chisinau, 26 October 2007

1 Outline 1.How the HBS changed 2.Assessment of data quality 3.Data comparability 4.Conclusions

2 Key improvements in the HBS In 2006 the HBS was changed with respect to two major areas characterising a survey: 1)Sampling: the way in which the sample is selected was changed in the following aspects: Sampling frame Sampling design Practice of substitution 2)Questionnaires: these were changed to better monitor poverty and living standards We first look in detail at changes in sampling and then we explain those related to the questionnaire

3 An old sampling frame A sampling frame is the basic structure of information that is used to draw a sample: population of different villages, cities and lists of households The HBS has been conducted from 1997 to 2005 in the same enumeration areas (villages and city districts) Such enumeration areas were considered to be representative and were selected based on population information gathered through the 1996 electoral lists (the sampling frame) At that time the electoral lists were the best information available, better than the 1989 Census Because of population changes and migration, information in the electoral lists was becoming increasingly biased, in some villages the list of households was exhausted In 2005 the NBS obtained updated and more comprehensive information through the 2004 Census as well as a database of electricity consumers Therefore, from 2006 both Census and the electricity database has been used to select the HBS sample

4 Sampling design The sampling design defines the main characteristics of the sample: number of enumeration areas, total number of households, country regions for which estimates are reliable Although the sample size in 2006 is the same as in 2005, the number of enumeration areas increased from 45 to 120, thus ensuring a better coverage of the country Until 2005 the sample was designed to be representative for three different regions: cities, towns and rural areas Now the sample is representative not only of these three regions, but also of four economic zones (North, Centre, Chisinau and South) Chisinau and Balti are now better covered and stratified for low and high income areas

5 HBS coverage of Moldova

6 The practice of substitution Until 2005 if a household did not want to be interviewed it was substituted with another household This created a selection problem: households with children tend to refuse interviews more than old people From the enumerator perspective some households are easier to interview and the practice of substitution can create some distortions, the enumerator may not put all the efforts in trying to interview the originally selected households The consequence is that the sample becomes less representative: proportionally more elderly people than in the actual population are interviewed and this in turn affects some of the key estimates (consumption, income, etc.) From 2006 substitution is no longer allowed and enumerators are encouraged to interview only the initially selected households

7 Questionnaire improvements In 2004 and 2005 the NBS conducted various experiments in order to improve the questionnaire design, such experiments guided the changes implemented in 2006 Questionnaire changes affected the following areas: –Changes in the reference period of some income sources and expenditure items –Improved layout of the diary (the questionnaire booklet that helps the household to record income and expenditure transactions) –Food expenditure recorded only for half a month not the full month –Changes in the definitions of employment indicators

8 Effects of questionnaire changes Collected information can now be used to produce both accurate averages for the National Accounts, weights for the consumer price index, and distributional data for poverty analysis. In particular poverty and inequality data have improved There is a reduced household burden for the participation to the survey (the household needs to spend less time to complete the required information) Improvement in the measurement of some key statistics (remittances and agricultural income) Employment data are now collected ensuring comparability with definitions used in the Labour Force Survey

9 Outline 1.How the HBS changed 2.Assessment of data quality 3.Data comparability 4.Conclusions

data quality Data quality can be assessed looking at internal data consistency, but also through external validation Internal consistency: –Relationship between aggregates, prices capturing inflation, etc. External validation: –Some HBS estimates can be compared to those provided by other sources –Such comparisons need to take into account differences in ways measures are obtained

11 Data validation with external sources Demographic indicators: Census –Composition by age –Household size National income and product accounts Social protection Labour Force Survey Agricultural statistics Let’s see some examples

12 Age distribution – HBS, Census and demographic statistics

13 Household size Average household size, including people working abroad, is the same in the 2006 HBS and in the Census, but in previous HBS was considerably lower In 2006 distribution of household size is much closer to that of the Census

14 Outline 1.How the HBS changed 2.Assessment of data quality 3.Data comparability 4.Conclusions

15 Comparability issues The changes described earlier (sampling, questionnaires) affect the comparability of 2006 estimates with previous surveys It is not possible to compare 2006 with previous estimates Let’s make a simple example: Assume that you are looking at a room from one specific corner This room between 1997 and 2007 has changed considerably The perspective that was good in 1997 is no longer representative now, some parts of the room are no visible In 2006 the perspective has changed and all the room became visible again

16 No comparability Although the room is the same, we cannot compare 2005 and 2006 estimates because 2006 data allows us to see part of the room that were not visible in 2005 This means that if estimates in 2006 are higher or lower than those in 2005, we cannot conclude that estimates have increased or decreased –For example, if the average household size in 2005 was 2.5 and in 2006 is 3. This does not mean that households are now larger than before. The part of the room that we did not see before has clearly an influence on the new estimate

17 Demographic indicators Household size and type of households

18 Example: House types in cities Detached houses in 2006 are included in the sample frame: they represent 16% of dwellings. In 2005 they appeared to be un- existent (due to the old sample frame)

19 Example: income and consumption Both income and consumption are now estimated at much higher levels than in 2005 This is in line with estimates from the National accounts

20 Conclusion HBS quality improved substantially and now provides data that are more representative of Moldova Higher data quality means: –Better understanding of poverty and its characteristics –Greater ability to inform policy making and monitor policy impact in the future However, 2006 data are not fully comparable with previous estimates. The degree of incomparability was somewhat unexpected, but we need to consider that there was no point in keeping the old design if no longer fully representative To make sure that data remains representative, villages and enumeration areas will be changed over time and the sampling frame will also be updated using the electricity database and making a household listing of the new selected enumeration areas