Integration of Annual Economic Collections – The Australian Experience ICESIII, Canada, 2007 Presented by Eden Brinkley

Overview of presentation Overview of ABS annual collections –Current collections –Client concerns Annual Integrated Collection (AIC) –Motivation –Understanding client needs –Basic AIC model –Design and estimation –Editing processes and systems –Developing a common culture Key learnings

Current annual collections Annually –Economic Activity Survey (economy wide) –Manufacturing Industry Survey –Mining and Utilities Survey –Selected Service Industries Surveys Biennially –Information and Communications Technology Survey Every 6-7 years –Construction Industry Survey –Retail Industry Survey –Wholesale Industry Survey

Client concerns with current collections Lack of coherence amongst the annual collections –Releasing statistics, nominally for the same industry, that did not accord Need for operational efficiency and simplicity –Annual collections operated as individually managed projects with different methodologies, systems and processes National Accounts Branch felt the annual estimates were not always ‘fit for purpose’ –Lack of coherence with quarterly collections –Outputs not always aligned with National Accounts needs –Lack of sectors splits and regular product detail

Annual Integrated Collection (AIC) Established a project in 2003 to integrate annual collections into a single system known as the AIC –Common designs directly focussed on meeting client needs –Common systems infrastructure –Changed culture and motivation for staff focus on a ‘big picture’ program Phased in progressively over 4 years from the reference year

Approach to integration Started with a ‘bottom up’ approach –Progressively align elements of the various collections in the program (e.g scope, estimation methodologies, etc.) Moved to a ‘top down’ approach –Start with a comprehensive prioritized assessment of client needs –Design collections to meet these needs

Key client needs National Accounts requirements (must have) –Financial data across economy at Supply Use industry level annually –Financial product level data every 1 to 9 years, depending on priority Other client requirements –A range of financial, structural and activity data By fine industry levels, business size, and broad geographic region –Alternative views of the data across industries e.g. satellite accounts

Broad AIC model A two-part integrated collection vehicle –An annual economy-wide core collection –A rolling program of more detailed but less frequent industry-specific collections linked to the core Administrative by-product data used, as much as possible, to complement the directly collected survey data –Decision criterion: “is the resulting data fit for purpose?”

AIC collection program (example)

Design constraints The sample is designed to meet the following constraints: –Core collection to have a sample size of around 15,000 units each year –Rolling program of collections to have a further 10,000 units each year –Sample for the rolling program is effectively a top-up of the core sample for the relevant industries –Industry estimates from the core and rolling program to be the same/aligned wherever possible

Scope and coverage Scope should ideally align with the scope of Australian National Accounts –All Australian based business activities of business entities operating during the reference period –In practice there are some exclusions (e.g. households institutional sector) Continuing to explore the inclusion of government units in core estimates for the first time Coverage is restricted to businesses on ABS Business Register at 30 th June each year

Frame Drawn from the ABS Business Register ABS Business Register has two populations –ABS maintained complex population Approximately 15,000 units Accounts for about half of total operating income, and about a third of employment –Australian Taxation Office maintained simple population Almost 2 million units No feedback allowed

Sample design Stratification –Industry x sector x broad region x size Design variables –Industry value added, Compensation of employees, Gross operating surplus, Gross fixed capital formation Reliable estimates of movement are the first priority –In practice the design is mostly based on level estimates

Estimation Generalised regression (GREG) estimation used for directly collected survey data –Business Activity Statement (BAS) data used as benchmarks BAS data also substitute for very small businesses in scope of the AIC –Substitution leads to challenges in modelling data items not found on the tax file (e.g. employment) Preliminary estimates to National Accounts nine months after reference period –Publish within 12 months

AIC Estimation Framework

Integrated outputs

Instrument design Aiming to rationalize both data content and the different form types used across AIC collections –Understanding client requirements Mapping project established to map SNA concepts to questions on forms –Success in developing improved ‘Standard Question Wording’ for –More rigorous process again for Aiming to investigate use of tailored forms for groups of similar businesses

Integrated infrastructure ABS has already built the basis of an integrated end-to-end systems environment Main components include: –Input Data Warehouse –Intelligent forms scanning facilities –Blaise for data capture and editing –Standard estimation and imputation system –Provider management system –Central repository for storing aggregate data –Central metadata repository AIC is both influencing and leveraging off this integrated end-to-end environment

Editing processes and systems AIC core and rolling collections steadily implementing best practice –Developing detailed editing strategies and common processes for each collection Aiming to deliver ‘fit for purpose’ data at minimum cost Editing re-engineering supported by –Editing Guide and training for AIC collection areas –Editing workshops for AIC collections –Common use of end-to-end systems developments Mainly focused on new micro editing tools to date

Micro editing process

Other enablers Editing strategies critically reviewed by peers Formal senior level sign-off gives legitimacy to new approaches being taken Analysts focussed on validating the highest priority outputs for key clients Clerical attention focussed only on the important units Earlier system specifications meant systems were delivered on time

Gains from improved editing

Future editing related work Integrated approach to imputation and outliering Adoption of common macro editing processes and tools Integrated output and dissemination strategy More emphasis on ensuring common process flows across collections generally Improved documentation (e.g. AIC quality manual)

Common AIC culture

Key learning points Focus on priority client needs at each stage of the collection design and conduct to ensure outputs are ‘fit for purpose’ From time to time take a green-fields/top down approach to collection design A good collection frame is the foundation for the production of quality statistics Work to maximize use of administrative data for design, estimation, data supplementation, etc. Integrated processes and systems will lead to both improved efficiency and data quality Build systems from the perspective of the end user Build a unified culture – one which involves compromise for the greater good

Questions?