assessing the quality of data reported by Member States in 2014 on balance of payments, international trade in services and foreign direct investment

REPORT FROM THE COMMISSION

assessing the quality of data reported by Member States in 2014 on balance of payments, international trade in services and foreign direct investment

1.Introduction

Article 4(3) of Regulation (EC) No 184/2005 states that:

‘The quality of the data transmitted shall be assessed, on the basis of the quality reports, by the Commission with the assistance of the Balance of Payments Committee referred to in Article 11(1). This assessment by the Commission shall be sent to the European Parliament for information.’

This report from the Commission assesses the quality of data on the balance of payments (BOP), international trade in services statistics (ITSS) and foreign direct investment (FDI) that were reported by EU Member States in 2014 under Regulation (EC) No 184/2005. The Commission prepared this report with the assistance of the Balance of Payments Committee, as required under Article 4(3) of the Regulation, and based it on the results of the quality assessment undertaken by Eurostat between January and July 2015. The quality assessment also covered the European Economic Area countries of Iceland and Norway, but the Commission’s report does not analyse the results for those countries.

This report provides a short description of the principles guiding the quality assessment of official statistics. It then goes on to analyse the extent to which BOP, ITSS and FDI data comply with the quality principles underlying the European Statistical System (ESS).

This report focuses primarily on the requirements of Member States to compile and transmit BOP, ITS and FDI data and on whether or not Member States comply with their legal obligations. It also provides information that can be used to assess the quality of these data, with particular emphasis on total aggregates and the major components needed to compile the aggregates.

The accompanying Commission Staff Working Document on the quality of BOP, ITSS and FDI statistics transmitted by the Member States, Iceland and Norway in 2014 presents an in-depth analysis of the results of quality assessment.

2.Assessing the quality of official statistics

Every year Eurostat assesses the quality of BOP, ITSS and FDI data in accordance with the principles laid down in Commission Regulation (EC) No 1055/2008. It checks that the data comply with the seven quality criteria in Article 12(1) of Regulation (EC) No 223/2009 on European statistics, namely: i) relevance; ii) accuracy; iii) timeliness; iv) punctuality; v) accessibility and clarity; vi) comparability; and vii) coherence. Regulation (EC) No 223/2009 was amended on 29 April 2015 to strengthen several provisions, including those on quality assessment.

Over the years, Eurostat has worked hard to develop quality management methods and tools to help it produce high-quality European statistics. Quality reporting underpins quality assessment, which in turn is the starting point for improving quality. The ESS Handbook for quality reports details the full range of methods that can be used to assess the quality of official statistics. The method used differs depending on the type of statistical process.

The purpose of statistics is to produce estimates of an unknown value. Variability and bias mean that these estimates are not equal to the true values and that statistics may suffer from a vast range of sampling and non-sampling errors.

An established theory for checking the accuracy of statistics based on sample surveys looks at variability, i.e. how much an estimator varies around its expected value. Variability is expressed by its variance, standard error, coefficient of variation and confidence intervals.

BOP statistics (like national accounts) are compiled through an accounting framework and are based on inputs from a variety of primary statistics, such as data on goods, services, and FDI. Some of the primary statistics are based on sample surveys, some are derived from administrative data, while some result from models.

A direct approach to measuring accuracy is not possible for an accounting framework like BOP. According to general principles on measuring quality in statistics, the two main instruments that should be used are the analysis of revisions (which show the degree of closeness of initial estimates to subsequent or final estimates) and the examination of errors and omissions. Both are covered by this report.

While the quality of aggregated statistics is not the simple sum of the quality of all underlying primary data, the quality of BOP data does depend on the quality of all the underlying primary data. Separate quality reports are regularly prepared for international trade in goods statistics. As provided for in Regulations (EC) Nos 638/2004 and 471/2009, these statistics are the main component of the current account. Therefore, only ITSS and FDI data are assessed together with BOP data.