DG ECFIN ECFIN– 12/10/2009 Slide 1 Effect of the changeover to the mandatory reply on the response rate for the French surveys José Bardaji, Olivier Biau, Vincent Bonnefoy, Jean-Baptiste Pinault Vincent Bonnefoy, Jean-Baptiste Pinault Fourth Joint EU OECD Workshop on Business and Consumer Surveys Brussels, October 2009 European Commission Directorate General Economic and Financial Affairs

DG ECFIN ECFIN – 12/10/2009 Slide 2 Olivier Biau European Commission, Economic and Financial AffairsIntroduction In January 2004, two surveys became mandatory: –Monthly « Activity » –Quarterly « Investment » Biannual « Cash » survey remained voluntary Did the response rate improve ? Did the new respondents have specific behaviour?

DG ECFIN ECFIN – 12/10/2009 Slide 3 Olivier Biau European Commission, Economic and Financial AffairsAgenda Short presentation of the 3 surveys Descriptive analyse of the impact of the obligation –On the response rates (short and medium term) –On the behaviour of new respondents Confirmation based on microeconometric study

DG ECFIN ECFIN – 12/10/2009 Slide 4 Olivier Biau European Commission, Economic and Financial Affairs 3 French Industry Surveys Monthly: « Activity » survey (11 per year) Quarterly: « Investment » (3 per year) Both included in the JH EU Programme of BCS Biannual: « Cash » survey (2 per year) Not included in the JH EU Programme of BCS Same survey sample (n=4.000 firms), stratified sampling with exhaustive stratum Qualitative questions: ↑ = ↓

DG ECFIN ECFIN – 12/10/2009 Slide 5 Olivier Biau European Commission, Economic and Financial Affairs Common methodology to analyse the response rate To eliminate seasonality in response rate, analyse on several dates before and after 2004 Short term ( ): 6 « Activity », 2 « Investment » and 2 «Cash » Medium term and econometric analysis ( ): 66 « Activity », 18 « Investment » and 12 « Cash » To eliminate the periodically updates of the sample, study based on balanced samples Response: at least one in the questionnaire

DG ECFIN ECFIN – 12/10/2009 Slide 6 Olivier Biau European Commission, Economic and Financial Affairs Analyse of the response rates short term: Significant increase of response rate for « Activity » (+2 points) and « Investment » (+3 points) Not for « Cash »

DG ECFIN ECFIN – 12/10/2009 Slide 7 Olivier Biau European Commission, Economic and Financial Affairs Analyse of the response rates medium term: Strong significant increase of response rate for « Activity » (+5 points) and « Investment » (+9 points) But also for « Cash » (+1.5 point)

DG ECFIN ECFIN – 12/10/2009 Slide 8 Olivier Biau European Commission, Economic and Financial Affairs Analyse of the response rates medium term: Cumulative fonction: P(number of responses ≤ n) n max =33 For « Activity », 60% of firms respond at least 30 times before obligation and 70% after.

DG ECFIN ECFIN – 12/10/2009 Slide 9 Olivier Biau European Commission, Economic and Financial Affairs Behaviour of new respondents Focus on « Activity » - 3 months before and 3 months after the changeover to mandatory reply Difference in difference estimator D D = (Y1 –Y0) Treatment group – (Y1-Y0) Control group Y1: output AFTER obligation (e.g. balance, %stable) Y0: output BEFORE obligation Same fixed effects in both groups: same trend in economic outlook

DG ECFIN ECFIN – 12/10/2009 Slide 10 Olivier Biau European Commission, Economic and Financial Affairs Behaviour of new respondents Control group: firms that respond to the 6 surveys (no effect of the change over) Treatment groups: firms whose number of responses changes (eg. Better)

DG ECFIN ECFIN – 12/10/2009 Slide 11 Olivier Biau European Commission, Economic and Financial Affairs Behaviour of new respondents Y = %stable in question Q5 (expectation) No specific behavior of the new respondents.

DG ECFIN ECFIN – 12/10/2009 Slide 12 Olivier Biau European Commission, Economic and Financial Affairs Microeconometric study Statistical unit: firm Balanced samples Merge with BRN’s database (fiscal declaration and annual survey) Size of samples : to Modelling the probability of non response: yit=1 ou 0 Obligation: 1 if t ≥ models: –Without fixed effects (Logit) –With fixed effects (Random effects Probit and Conditional Logit)

DG ECFIN ECFIN – 12/10/2009 Slide 13 Olivier Biau European Commission, Economic and Financial Affairs 3 models Logit: y it * = X it.β + X i.γ + ε it Random Effects Probit: y it * = X it.β + X i.γ + c i + u it Conditional Logit: y it * = X it.β + c i + v it

DG ECFIN ECFIN – 12/10/2009 Slide 14 Olivier Biau European Commission, Economic and Financial Affairs Random Effects Probit y it * = X it.β + X i.γ + c i + u it

DG ECFIN ECFIN – 12/10/2009 Slide 15 Olivier Biau European Commission, Economic and Financial AffairsConclusions Significant improvement of the response rate for « Activity » and « Investment » Stronger effect at medium term Whatever the model, the obligation increased the probability of response Response rate for optional « Cash » survey also improved, albeit to a smaller extent