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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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%

9. 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)

10. 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

11. 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.

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. Demonstration

20. Questions