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Section D Sources and methods for compiling an ISP

Section D Sources and methods for compiling an ISP. Rob Pike UK representative, STESEG Task Force on Services. Overview. Introduction Approach (D.1) Quality measures (D.2) Defining criteria for indicators (D.3) Proposed criteria for indicators (D.4.1) Deflators (D.4.2)

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Section D Sources and methods for compiling an ISP

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  1. Section DSources and methods for compiling an ISP Rob Pike UK representative, STESEG Task Force on Services

  2. Overview • Introduction • Approach (D.1) • Quality measures (D.2) • Defining criteria for indicators (D.3) • Proposed criteria for indicators (D.4.1) • Deflators (D.4.2) • Recommended variables (D.4.3)

  3. Introduction • Heterogeneous nature of services • Wide range of current practices • dependent on national needs & availability of data • ISP manual will assist countries in: • developing a monthly (or quarterly) ISP • improving measurement of services • increasing consistency & coherence within and outside the OECD

  4. Approach • Not always practical to achieve conceptual best • financial constraints; measurement difficulties; burden on business • ISP presents 3 options: • Preferred data source(s) • Alternative data source(s) • Other data source(s)

  5. Preferred, Alternative & Other • Preferred - most appropriate conceptually; but only suitable if general conditions (quality measures) met • Alternative - use if Preferred not available or if Preferred is considered unsuitable (fails quality measures) • Other - less precise measure but reasonable to use in the absence of other sources

  6. Quality measures • Used to assess suitability of data sources • Suitability a prerequisite for conceptually appropriate series • Quality measures are broadly consistent with quality frameworks of IMF & Eurostat • Subjective approach • Simple scoring system

  7. Quality measures • Coverage • Timeliness • Periodicity/frequency • Accuracy • Relevance • Consistency

  8. Defining criteria for indicators • Criteria based on Eurostat Handbook on price and volume measures in national accounts • ISP manual uses same principles but with more latitude

  9. Eurostat price and volume handbook uses A, B, C method to evaluate appropriateness

  10. Manual assesses methods by transaction category and then by product • The manual relates to annual data • Recommend the same principles should be used for sub-annual data (although with more latitude)

  11. Market Output • Generally three different ways of measuring output: • Deflated turnover (using PPIs, CPIs) • Volume extrapolation using output indicators • Volume extrapolation using input indicators

  12. Market Output - A methods • For A methods, turnover deflated by PPIs is preferred, but it must: • be an index of the price of the output of exactly that product • take account of quality changes • be valued at basic prices • Use of CPI is an A method if output is consumed wholly by households

  13. Market Output - B methods • The following will usually be B methods: • Turnover deflated by a less appropriate PPI (i.e. without quality adjustments, or a smaller/larger coverage than the product heading) • A CPI that satisfies the same criteria as specified for PPIs above • Output volume indicators

  14. Market Output - C methods • The following will usually be C methods: • Input methods • Secondary indicators (i.e. not directly related to the output) • Deflation using PPIs / CPIs that do not correspond at all with the product (i.e. general CPI)

  15. Non-market output • Generally input volume methods are C methods for individual services and B methods for collective services • Where input volume series for collective services are fully representative, quality adjusted & detailed they would constitute A method

  16. Appropriateness of Eurostat handbook • Developed for annual indicators • principles hold • impractical to measure intermediate consumption • base criteria for appropriate SPI indicators broadly on Eurostat recommendations for output

  17. Proposed criteria • Preferred • turnover deflated by appropriate output price • detailed appropriate volume indicators • Acceptable • turnover deflated by a less appropriate price • volume indicator (less detailed) • input series for non-market collective services • Other • input series

  18. Deflators • Intend to insert a section on measurement of service sector prices

  19. Recommended variables • Services classified by ISIC categories • Short text to describe ISIC class & raise relevant issues • Explanatory notes • what is included/excluded • Preferred, Alternative & Other • Some suggestions on helpful sub-division of categories

  20. Way forward • Approval by STESEG & take on comments from STESEG • Complete first draft of recommended variables for all service industries & circulate to TF members for suggestions/ comments, by end 2004 • Circulate to STESEG members for suggestions/ comments in 2005

  21. Discussion points from comments of STESEG members - Evaluation of variables: - need for additional criteria? Such as: - serviceableness, - variable’s performance relative to established benchmarks, - proportion and effects of non-response on the data. - Consistency with GDP? - ISP will be benchmarked to quarterly and annual GDP? - Data sources for ISP and GDP to be consistent. - Invites careful study and further suggestions on tables in section D.4.2

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