1 / 23

Methodology for deriving the STRI

Methodology for deriving the STRI. www.oecd.org/trade/stri. Hildegunn Kyvik Nordås Alexandros Ragoussis OECD Trade and Agriculture. OEC D/TAD Services expert meeting 2 July 2009. Approaches to quantifying barriers to trade in services. Top Down. Bottom Up. Overview.

celeste-albert
Download Presentation

Methodology for deriving the STRI

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Methodology for deriving the STRI www.oecd.org/trade/stri Hildegunn Kyvik Nordås Alexandros Ragoussis OECD Trade and Agriculture OEC D/TAD Services expert meeting 2 July 2009

  2. Approaches to quantifying barriers to trade in services Top Down Bottom Up

  3. Overview • Selection of indicators • Sources of information • Scoring • Weighting • Aggregation • Robustness checks

  4. Selection of indicators • Explicit barriers to trade and investment • Barriers and regulations that are: • mentioned explicitly in the GATS • mentioned explicitly in regional trade agreements • identified by experts at services expert meetings • Related to future negotiations on rules in the WTO/GATS • Statistical methods to prevent overlap

  5. Sources of information • OECD Product Market Regulation • STRI added questions on treatment of foreign parties; • OECD restrictions on foreign investment indicators and codes of liberalisation and capital movement; • Surveys undertaken in relation to three services expert meetings; • OECD Communications Outlook; • ITU • Government websites; • Other

  6. Scoring – transforming qualitative information to quantitative scores • Objectives: • Independent of the sample can easily be extended to new countries • Retain the variation in the underlying data • Comparable across countries and time • Comparable across sectors • Simple

  7. Choice of scoring methodology The objectives The features of the data Several alternatives were explored Binary scores chosen

  8. Transforming continuous to binary data

  9. Choice of weighting scheme • Ideal: The marginal impact on trade; • Cannot be confidently estimated • Preliminaries: • A large number of regulations; • Relatively few observations (29 countries); • Regulations categorised using principal component analysis in the PMR • Methodologies explored • Expert judgement • Principal component analysis • Equal weights • Random weights (for robustness checks)

  10. Weighting schemes cont. • Expert judgement: • Observations on regulation categorised as in the PMR • Experts at the sectoral expert meetings ranked categories and scored individual measures

  11. Example: Expert ranking, professional services

  12. Example expert scoring, professional services

  13. Weighting: expert judgement and equal weights

  14. For telecommunications • Regulations necessary for competitive markets; • Absence of regulation can be trade restrictive when markets are not competitive; • Therefore an interaction term is introduced:

  15. Weighting schemes: PCA Principal Component Analysis (PCA) assigns the highest weights to the measures with the largest variation More variables than observations in the dataset

  16. What difference does the weighting scheme make? Construction Computer Professional Telecoms

  17. Aggregation • Is the additional burden of another measure • Constant? • Increasing in the number of measures? • Declining in the number of measures? • Constant is assumed • More research needed to assume otherwise • Allows for multiple classifications

  18. Multiple classifications • By regulatory category (from PMR) • By GATS definitions (MA+NT; DR) • By discriminatory/non-discriminatory • By mode • By restrictions on operations/entry

  19. Summary - methodology • Scoring: Binary • Weights: Equal weights of measures within categories, expert judgement on categories; • Aggregation: linear

  20. Example: professional services Equal weights within categories Expert judgment Categories of measures are ranked from the most to the least trade restrictive

  21. Robustness: rank correlations The STRIs are not very sensitive to the weighting scheme Possible exception: Computer services

  22. Conclusions • The STRI is a composite index calculated on the basis of information on regulation only; • A number of scoring and weighting schemes have been explored; • Choice of scoring scheme is data driven • Choice of weighting scheme is based on the literature: • some restrictions are more important than others • Which measures are more restrictive is based on expert judgement • OECD countries have relatively even regulatory profiles results are not very sensitive to weighting schemes

  23. OECD Trade and Agriculture www.oecd.org/trade Contact Hildegunn.Nordas@oecd.org Alexandros.Ragoussis@oecd.org

More Related