The impact of classification changes on time series continuity the case of u s monthly retail sales
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The Impact of Classification Changes on Time Series Continuity The Case of U.S. Monthly Retail Sales. Presented to OECD Short-Term Economic Statistics Working Party By: Thomas E. Zabelsky Chief, Manufacturing and Construction Division [email protected] June 26, 2006.

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Presented to OECD Short-Term Economic Statistics Working Party By: Thomas E. Zabelsky

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The impact of classification changes on time series continuity the case of u s monthly retail sales

The Impact of Classification Changes on Time Series ContinuityThe Case of U.S. Monthly Retail Sales

Presented to

OECD Short-Term Economic Statistics Working Party

By: Thomas E. Zabelsky

Chief, Manufacturing and Construction Division

[email protected]

June 26, 2006


Importance of time series

Importance of Time Series

  • Historical description of occurrence or phenomena

  • Analyzing and interpreting economic conditions

  • Basis for forecasting


Time series continuity

Time Series Continuity

  • Requires –

  • Continuous series of observations

  • Standard methods and definitions


Changing industrial classifications

Changing Industrial Classifications

  • The dilemma -

  • Keeps pace with evolving industrial and business activities, but

  • Interrupts continuity of time series data


North american industry classification system naics

North American Industry Classification System (NAICS)

  • Clean slate revision to earlier system

  • First NAICS-based data published from 1997 Economic Census


Impact of naics on industry classifications

Impact of NAICS on Industry Classifications

  • 1,170 industries – 15% increase over SIC

  • Industries

  • -350 new

  • -390 revised

  • -422 substantially unchanged


Impact of naics on retail trade

Impact of NAICS on Retail Trade

  • Old SIC division split into two NAIC sectors

  • -retail trade

  • -accommodations and food services

  • Retail trade

  • -15 industries; 10 new

  • -eating and drinking places accounted for 10% in retail SIC

  • -retail-wholesale boundary issues


Impact of naics on retail trade data

Impact of NAICS on Retail Trade Data

  • Source:1997 Economic Census


Sources of change on naics based retail data

Sources of Change on NAICS-BasedRetail Data

  • Source:1997 Economic Census


Restructuring retail time series data

Restructuring Retail Time Series Data

  • Restated 1992 Economic Census sales on a NAICS basis

  • -assigned NAICS code to each employer establishment with an SIC that directly converted to NAICS (74%)

  • -Matched employer establishments by ID and SIC to 1997 to obtain NAICS (6%)

  • -Uncoded establishments of multi-establishment firms based on collective characteristic of all establishments (0.1%)

  • -Random assignment (20%)

  • -Exceptions


Restructuring retail time series data cont

Restructuring Retail Time Series Data (cont.)

  • Restated monthly SIC-based estimates from January 1992 – March 2001

  • Restated annual retail estimates from

  • 1992 – 1998

  • Distributions based on SIC to NAICS links developed in 1997 census

  • Adjusted the restated monthly NAICS estimates prior to March 2001 to account for new (NAICS) and old (SIC) based differences


Computing benchmarked estimates

Computing Benchmarked Estimates

  • Restated annual estimates benchmarked to 1992 and 1997 Economic Censuses

  • Minimized differences between the year-to-year changes of the restated annual estimates

  • 1999 was computed using the published 1998 estimate by the ratio of the 1999 to 1998 estimates derived from the 1999 Annual Retail Trade Survey


Computing benchmarked estimates cont

Computing Benchmarked Estimates (cont.)

  • Monthly Retail Sales

  • For January 1992 through March 2001, restated estimates were changed in a manner that

  • -constrained the sum of the 12 months to equal the benchmarked, restated annual estimate for 1992 through 1999

  • -minimized the difference between the month-to-month changes of the restated monthly and benchmarked series

  • Constant ratio applied to monthly estimates following December 1999


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