1. Monica Consalvi, ISTAT, Italy
The role of the business register as an informative source for business analysis
19th International Roundtable on Business Survey Frames
Cardiff, 16 – 21 October 2005
Session N.2
Monica Consalvi, ISTAT, Italy

2. A new role for the BR
The need for information on specific aspects of social and economic life is extended to an increasing demand for integrated data
ISTAT is changing its way of producing business statistics, following the idea of a coherent system of economic statistics

3. The BR was…
the official statistical source for information on the structure and the demography of the business population
supporting structure
tool for preparing surveys
supplying sample and population data
basis for grossing‑up results to produce business population estimates

4. The BR now is also: The new coordinating role of the BR
cooperation among the various departments
“core” of a coherent system of economic statistics
The BR as a dissemination tool
(dissemination of data directly from the BR)

5. The use of the register as a tool for production of statistics
new difficulties:
different kind of users
development of new methodologies for data treatment
treatment of data confidentiality
time series coherence
the point of view is completely different from a survey approach: the BR is a “live entity”, which is constantly revised and updated

6. The variations observed between two “snapshots” of the BR are due to:
structural development of the economy (demographical aspects, effects due to the evolution of the size of the enterprises and to changes in their economic activity)
process of revision of the register

7. The incoming/outgoing flows
The basic accounting equation for a generic sub‑set (i) of the whole population (e.g. a NACE division, a NUTS region, a size class):
Nt+1 (i) = Nt (i) + D∆t (i) + V∆t (i)
where:
D∆t(i) = IBirth∆t(i) ‑ ODeath∆t(i) is the balance between the demographic flows
V∆t(i) = IV∆t(i) ‑ OV∆t(i) is the balance between the flows caused by changes in the characteristics that draw up the boundaries of the subset

8. The updating of the register at time (t+1) is determined by actual changes, and adjustment of characteristics of the units
during the period (t, t+1) the BR may acquire data referring to a previous time
actual changes recorded at a later time
delay in recording birth/death or in recording changes in characteristics in the administrative registers

9. The adjusted population at time (t) is:
Nt* (i) = Nt (i) + ED∆t (i) + EV∆t (i)
where:
ED∆t (i) = EOD∆t (i) ‑ EID∆t (i) is the balance of the errors (or adjustments, or delays in updating) related to the state of activity
EV∆t (i) = EOV∆t (i) ‑ EIV∆t (i) is the balance of the errors related to the other characters that delineate the scope of the subset
For instance EID∆t (i) are the false active units belonging to the subset (i), that were considered active in (t) but actually ceased before, so that they have to be eliminated from the subset of active units. In the same way EOD∆t (i) are the false non active units belonging to the subset (i), that were actually active in (t) and have to be added up to the subset of active units. Similarly EOV∆t (i) and EIV∆t (i) will be respectively the units belonging to and the units not belonging to the scope of the subset, after having changed the economic activity code, or the number of employees or the administrative address of the enterprise.

10. [D∆t (i) ‑ ED∆t (i)] + [V∆t (i) ‑ EV∆t (i)]
So the actual balance between (t) and (t+1) will be:
Nt+1(i) ‑ Nt*(i) = [Nt+1(i) ‑ Nt(i)] + [Nt(i) ‑ Nt*(i)]
starting balance
adjustment
[D∆t (i) ‑ ED∆t (i)] + [V∆t (i) ‑ EV∆t (i)]
This equation removes the two components
of error from the balances D∆t and V∆t.

11. The updating process of the Italian BR
logical and physical integration of data resident in some administrative and statistical sources
output: the “frozen” file (the set of the estimated active units in the reference year, at the end of the first quarter of each calendar year)
updating of a relational database containing the history of each unit

12. The BR is constantly revised and updated
the treatment of errors is performed using the micro approach (they are detected at the individual business level) Improvement in the total quality of the register
fixed and documented procedures
each character of each unit is referenced:
the production process (integrated process, survey, mode of correction,…)
the source of the corrected value
reference date of the value
the type of correction (if updating or error)

13. The new role of the BR as a dissemination tool
For the first time, ISTAT published structural data on active enterprises retrieved from the statistical business register, for the reference year 2002 (hereafter referred to as “BR04”)
BR04 was the basis for grossing‑up
SBS survey results

14. The new role of the BR as a dissemination tool
Publication of new data from the same source for the reference year 2003
new adjusted release
for the reference year 2002
(hereafter referred to as “BR05”)

15. 2002-2003 differences are due to:
structural development of the economy
process of revision of the register
The changes in the economic structure from 2002 to 2003 are different, depending on which release of the register is taken into account for the reference year 2002 (the one published in 2004 or the adjusted one, after one year revision)

16. Changes in the two 2002 releases
16 thousands non-active enterprises wrongly considered as active:
delays in the registration of the cessation date in the administrative registers used as sources of the BR
About 15 thousands economic activity codes were modified:
73% of them violated some compatibility rules concerning actual changes in the main activity
19% were caused by feedback from statistical surveys
8% came from profiling on big enterprises
For 2 thousands of enterprises the employment was modified:
mainly coming from responses from statistical surveys

17. Differences between the two 2002 releases
20 thousand units (only 0.5% of the total number of active units) and about 8 thousand persons employed (0.05% of the total employment)
Differences between 2002 and 2003:
increase of 0.3% in the number of active enterprises using BR04
Increase of 0.7% in the number of active enterprises using adjusted BR05 (2002 revised release)

20. The impact of changes is much higher in some particular cells of the structure:
Section E “Electricity, gas steam and hot water supply”  4% decrease in the number of persons employed (using BR04 or BR05)

21. The impact of changes is much higher in some particular cells of the structure:
NACE class “Transmission of electricity”
high decrease in the number of persons employed (‑90%) when looking at the BR04 or the SBS published data
the decrease in size is only -2.6% when using the revised BR05 data

22. The impact of changes is much higher in some particular cells of the structure:
NACE class “Distribution and trade of electricity”
high increase in the number of persons employed (‑692%) when looking at the BR04 or the SBS published data
the decrease in size is only -4% (stable) when using the revised BR05 data

23.  Re-organisation of the energy sector
the re-structuring affected key characteristics such as size and main activity of the enterprises working in this Section
 Delays in the registration
more than 35 thousand persons employed were accidentally classified in the NACE Class instead of the correct 40.13

24. The effects of the adjustments are notable even for the whole register
different evaluation of the economic cycle (an increase of 0.3% in the number of active enterprises from 2002 and 2003 instead of 0.7% means either that the rise rate is reduced, or that the expansion keep on similar to the previous years)

25. The impact is not on the register but on published data from the register
all the adjustments are placed immediately into the BR at the same time as the information is available
Problems:
which adjustments can be included
which is the proper time to introduce them, and in which way

26. Consistency or transparency?
On one hand, the business register should be structured and maintained in such a way that the correction of errors has a minimal impact on statistical surveys
On the other hand, it is necessary not to be ambiguous when disseminating data, let the BR users and the general public know about errors and corrections

27. Consistency or transparency?
The Italian choice is in favour of the transparency in disseminating data retrieved from the BR, rather than the consistency with other published statistics (SBS) and their stability
In Italy statisticians must correctly describe the evolution of small enterprises, that it is known to be here a political, social and cultural problem

28. Transparency Comprehensibility
All the adjustments concerning active enterprises are reported and explained carefully so that the users are able to understand through statistics and indicators how big is the phenomenon and which is the actual trend

29. Future problems: For the moment: rebuilding time series
how to estimate the time lag after which the BR data can be considered as stable (Obviously the closer to the time of the update, the more accurate the assessment of impact is likely to be)
For the moment:
the measure of the correct lag is one year
the dissemination of revised data has to be integrated with a complete description of the adjustments and the revisions in favour of transparency toward BR users