Chapter 11 Comparing data sources

Chapter 11 Comparing data sources  

11.1.         In chapters 6 to 10, the present Guide discussed a variety of data sources, including enterprise and establishment surveys, surveys on persons and households, ITRS, administrative records and other data sources. Chapter 11 provides a comparison of the advantages and disadvantages of those sources in compiling the various EBOPS components, as well as FATS and modes 2 and 4 number of persons and trips. The advantages, identified with a plus sign (+), and disadvantages, identified with a minus sign (-), are analysed in comparison tables by systematically addressing the coverage of transactions (C), the accuracy of reporting (A), the timeliness and frequency (T), the relevance (R) and the burdens of reporting and processing data (B) involved in each data source. In doing so, the present chapter forms the basis for chapter 13, in which the integration of data from different sources is discussed.

A.        Summary of good practices  

11.2.        Given the fact that the present chapter is about comparing data sources and good practices for the collection of the five main services groupings (manufacturing services on input owned by others as well as repair services, transport, travel, other services and government goods and services), FATS and the modes of supply, the user is advised to read sections B (resident/non-resident trade in services), C (FATS) and D (modes of supply) for specific discussions of good practices in those areas.

11.3.        It is generally considered good practice for compilers, guided by the comparison tables available in the present chapter, to explore and compare the possibilities offered by the sources readily available nationally, and to use those that present an advantage (identified with a plus sign), relative to other sources, for collecting information for the supply of services item under consideration. If no source is yet available for the topic under consideration, it is considered good practice for the compiler to carefully compare and assess which type or types of data collection would be most useful to set up in his or her national context, using the guidance of the comparison tables in the present chapter.

11.4.        To assess the advantages and disadvantages of different sources with respect to their coverage of the specific service category, some collection practices are marked with a double plus sign (++) in order to illustrate that they, relatively, present the most advantages. However, the reader should always be aware that, depending on national circumstances, the suggested source might not always be the best option for every country and that, in practice, other sources or a combination of sources can be more suitable for collecting the necessary information.

B.         Comparison of data sources for resident/non-resident transactions  

B.1  Preferred collection practices and comparison of data sources for manufacturing services on physical inputs owned by others and maintenance and repair services n.i.e.  

11.5.        The present Guide suggests that data on manufacturing services on physical inputs owned by others (and corresponding goods) and on short manufacturing services could best be collected through surveys sent to manufacturing companies that organize international production (for imports of manufacturing services) and to processing companies/sole-proprietorships (for exports of manufacturing services). It is important to explain to respondents, and to verify that they understand, the scheme of production networks in which they are involved. Surveys would also be an efficient source for collecting information on maintenance and repairs n.i.e., paying special attention to identify separately maintenance and repairs related to construction and computer services, given the definition of those items.

11.6.        An ITRS is an alternative data source for those items.  For manufacturing services, it should be noted that an ITRS captures only fees paid to processors, meaning that transactions without settlements (e.g. between affiliated enterprises) may not be captured. Although customs data may also be used to derive estimates on manufacturing services, it is widely recognized that the difference between the value of imports and exports of processed goods in general does not represent the processing fee. Customs data could be useful for identifying companies engaged in processing, for reconciliation exercises when  processing fees are obtained from ad hoc surveys or to complement other methods or, alternatively, as input in a data model by major type of manufacturing. Regular benchmark surveys may complement those sources to validate the model outcomes. Customs data are also potentially useful for identifying goods sent abroad for repairs and maintenance,  although information on fees that is difficult to obtain could be requested in customs forms (see BPM6). Given the tax concessions provided to some firms that may be involved in processing, statements to tax authorities may provide relevant information.

B.2  Good collection practices and comparison of data sources for transport  

11.7.        Enterprise/establishment surveys of resident and non-resident carriers are the main source for collecting transport services data in many cases. Compilers are advised to make sure that the survey is elaborate enough to cover most EBOPS categories related to transport services. An additional difficulty, which applies to all sources for transport, is obtaining the information necessary for compiling data on the basis on BOP recording rules.^[1] Compilers should also be aware of potential difficulties in obtaining data that reflects the activities of non-resident carriers for freight-related services (i.e., imports of freight transport services-debits). However, in many cases, transport operators establish branches or agents in client countries, which may then respond to surveys. For economies with regulated modes of transport, air transportation being the best example, this may even be more relevant. Alternatively, countries can survey resident importers and exporters about their transport expenditures paid both to resident and non-resident carriers.

11.8.        Information on passenger transport services can also be obtained from traveller surveys, including by means of questions on passenger fares for international transportation, although the same limitations encountered in travel would apply, namely, the capacity of the respondent to provide the correct information, and the compiler’s knowledge of the population.

11.8.        An ITRS may cover most exports and imports of transport services categories, but may not properly distinguish freight exports under FOB contracts where the transporter is a resident, or imports of freight transport under CIF contracts, as the transport value is usually included in the value of merchandise. In such cases, compilers need additional information to estimate the imports of freight transport services. In addition, when using ITRS, compilers should be aware that the country of operations may be different from the country of registration or residence of the owners, especially in marine shipping.

11.9.        Administrative records, such as customs documents, could provide useful information for modelling freight costs, as long as they include information about the commodity traded, the weight, the origin and destination and the mode of transport. Obviously, including such information also depends on whether it is available for the carrier involved. For example, administrative records may not have information on transport costs by type of merchandise. They also will not be helpful for the transport of cargo or passengers from one foreign country to another by a resident transporter, and administrative records might also be a weak source for measuring transactions related to auxiliary transport services, such as loading containers, storage or air traffic control.

B.3 Good collection practices and comparison of data sources for travel  

11.10.    Travel-related transactions are unique in comparison with other services, in that individuals are involved systematically in the consumption of the related products. The most efficient way to collect data from those travelling is, therefore, through surveys of persons or households that ask for information on their expenditures while outside their home country. There are certain limitations to such surveys, however. First, it may be difficult to reach relevant households/persons, notably non-residents, at the time they leave the country. Reaching residents when they return to their home country is also a difficult task, but they can be surveyed later (i.e., through household surveys).

11.11.    Secondly, respondents may not have a perfect idea of all their expenditures during their travel, especially if they have to fill out the survey while they are in the process of leaving the country. Some expenses, such as hotels or some transport, could have been paid well in advance.  Expenses in the context of business travel could be paid or reimbursed by the traveller’s enterprise; the traveller may even not know the exact value of the services transactions paid by his or her employer.

11.12.    An ITRS could cover payments by resident and non-resident travel agencies, as well as large payments for travel. Payments by travel agencies may include expenses for hotels, domestic transport and meals during travel. Transaction data from foreign exchange bureaus could also approximate travel expenditures, although such data could contain non-travel transactions. Another potential weakness that can be important in the context of travel is that settlements and service delivery may not occur in the same time period.

11.13.    Other data sources, such as payment and bank card (credit and debit) transactions, could also be explored. Such sources are not perfect, as purchases with credit cards or withdrawals with debit cards could have purposes other than travel spending. Therefore, the use of further information relating to credit and debit card transactions should be explored, such as the merchant code and information concerning the point of sale, in order to identify the relevant travel transactions. Compilers should be aware that persons travelling do not always use a card for payment, but may use cash, or payments may be made by a third party. However, payment and bank card information might be very helpful for establishing trends and geographical breakdowns, and it offers a much larger sample than any survey on persons or households can likely provide. In the context of personal and household surveys, administrative records, including information from entry/departure cards, and mobile phone records, information is often combined in a model to derive travel information.

Table 11.3 Comparison of data sources for compiling travel

(+) implies advantages and (-) implies disadvantages in terms of each element.

B.4  Good practices and comparison of data sources for other services^[2]  

11.14.    For most of the other services, the present Guide suggests that enterprise/establishment surveys could provide a large share of sources for estimates. The advantage of such surveys is that they could be designed to collect specific information corresponding to the compiler’s needs.

11.15.    Surveys are costly to process, however, and are also costly for the respondents, as they have to train employees to complete questionnaires. This is particularly true for transactions in services, which are difficult to extract from accounting documents. Increasing the response burden of small entities could be counterproductive as it could affect their interest in responding to other surveys for which their participation is more important.

11.16.    To improve efficiency in data collection, enterprise/establishment surveys could be designed to target a specific activity or specific industry, in particular for exports. In certain cases, such targeting may also be relevant for imports of services (e.g., affiliated companies or activities for which outsourcing or /offshoring of activities may be important). Respondents could then be asked to provide more detail for services activities in which they are likely involved and less detail for other services where they expect to have negligible impact. In addition, it is important to note that collecting representative data for imports of services may be more difficult than for exports, as any resident entity, large or small, can import services. However, as indicated above, a number of factors could be used to define those enterprises or establishments that are more likely to be major importers of services.

11.17.    As with any other survey, the degree to which a sample is representative of the population is a key indicator for the quality of the results. Compilers should take advantage of all other available sources of data to supplement and validate survey results and to reduce processing costs and reporting burdens.

11.18.    An ITRS has the great advantage of providing larger coverage than enterprise/establishment surveys. An ITRS comes with a strong degree of obligation for the respondents to provide the information requested. The costs for compiling ITRS data may be low, as the compilers can concentrate their efforts and resources on items that are not sufficiently covered. However, in some cases, it might be difficult to incorporate details, e.g., EBOPS, in reporting forms.

11.19.    Administrative records cover a large portion of transactors, but may not be sufficient for all services categories. A promising source in that respect is tax records that include the value of services sold to or purchased from non-residents (value added tax (VAT) for services), as well as the location of the service transaction. That information can be particularly useful for identifying service traders. The advantages of those records are low cost and timeliness and completeness, the latter because tax or finance departments may have greater powers to convince respondents. The drawback is that, since the main purpose of this source is not to produce statistics, the validation of the results might not be adequate for the compiler’s needs, and the compiler has no control over changes to, or even the abolishment of, the data source by the tax authorities.

Table 11.4 Comparison of data sources for compiling other services, excluding manufacturing services on physical inputs owned by others, maintenance and repair services n.i.e. and government goods and services, n.i.e.

(+) implies advantages and (-) implies disadvantages in terms of each element.

11.20.    Surveys and an ITRS cannot be used to directly compile services such as FISIM or insurance services, which need supplementary information and require models to be generated. However, they can provide important partial information for the measurement of those service items (e.g., insurance payments). Commercial databases on financial institutions could also be useful for such items if they contain sufficient detail. For construction, surveys may provide more detailed and relevant data than an ITRS (see chapter 8).

11.21.    For some specific detailed service categories, surveys on persons and households, which are primarily used to collect social and demographic information, could be useful. For example, although normally small in comparison with enterprise or establishment transactions, purchases of products downloaded online by individual consumers (software or audiovisual products) or commissions paid directly to non-resident brokers by individuals directly buying or selling securities abroad would most likely be covered only through such surveys (see chapter 7).

B.5       Good practices and comparison of data sources for government goods and services n.i.e.  

11.22.    Similarly to travel, government goods and services n.i.e. are transactor-based (i.e., government units supply services or purchase goods or services). Compilers should use administrative records for the majority of services supplied by government units. Administrative data could also be used to capture data on expenditures by government units abroad, as well as by staff (e.g., by obtaining data on their wages to derive an estimation of their expenditure). For some components, such as goods and services acquired by government units, or by staff and their dependants working in foreign embassies and military enclaves (for example, diplomats or military personnel), those transactions could be obtained through surveys of the units. For staff and their dependants, surveys could be targeted to embassies. They could include questions on the number of diplomats and other government employees, as well as on their earnings, to estimate expenses. An ITRS, if well designed, could capture expenditures by government units; however, it could be difficult to capture transactions with foreign government enclaves located in the reporter’s economy. In addition, an ITRS cannot be used to capture expenditure by diplomats and their dependants.

Table 11.5 Comparison of data sources for compiling government goods and services n.i.e.

(+) implies advantages and (-) implies disadvantages in terms of each element.

C.        Good collection practices and comparison of data sources for FATS     

11.23.    For FATS,  information on services provided via mode 3 (commercial presence), enterprise/establishment surveys is the most useful source. As noted in chapter 6, an understanding of the FDI Framework provides a strong basis for the establishment of the FATS universe; key FATS variables could even be incorporated into existing FDI surveys. Administrative records or commercial databases on foreign affiliates are also useful, but their forms and questionnaires cannot be easily designed to provide useful data for statistical and analytical purposes. Thus, they could rather be used as supplements to the survey on foreign affiliates.

11.24.    An ITRS, which provides strong sources for resident/non-resident transactions, is not necessarily useful for compiling FATS, because an ITRS captures only settlements between foreign affiliates and residents, and such information does not measure the activities of foreign affiliates (including the provision of services).

Table 11.6 Comparison of data sources for compiling inward and outward FATS

(+) implies advantages and (-) implies disadvantages in terms of each element.

D.        Preferred collection practices and comparison of data sources for modes 2 and 4 numbers of persons  

11.28.    Tables 11.7 and 11.8 provide an overview of the different sources from which the number of modes 2 and 4 trips and/or persons can be derived, as well as some of their characteristics from the perspective of both the sending (outgoing individuals) and receiving (incoming individuals) country. Compilers should carefully evaluate how residence is defined in their country, be aware of the laws and regulations in place for migration and trade in services and assess how that information can be used in a statistical context.

11.29.    Table 11.7 on mode 2 movements of persons shows that the sources of interest would most likely be the same as some of those used for the collection of travel information. An ITRS cannot capture such information, but household and border surveys can capture information on outgoing individuals travelling for personal or business reasons. Often such surveys need to be elaborated to identify the travel motive (business or personal reasons). Labour force surveys and enterprise surveys constitute appropriate sources for capturing the number of outgoing persons travelling for business reasons. For incoming mode 2 persons, specific surveys targeting students, medical personnel and tourists could be used, as well as border surveys that can be conducted as persons leave the country. Administrative sources such as border counts or entry/departure cards can be used to get an initial, timely estimate of the number of individuals leaving or entering the country to consume services, but compilers should be aware that it might be difficult to add supplementary questions to such sources. Often the data will need to be combined, in particular for compiling breakdowns, to obtain relevant data on the number of mode 2 movements/persons, e.g., through the use of data models using numbers from border counts, entry/departure cards and information from border or household surveys.

11.30.    Table 11.8 breaks down the categories of mode 4 persons into four categories: employees and self-employed contractual services suppliers, intracorporate transferees/foreign employees of foreign affiliates and services sellers.

11.31.    Regarding mode 4 types of persons, enterprise surveys (i.e., trade in services, structural business or general enterprise surveys) constitute an important source for both incoming and outgoing employees and for self-employed persons providing services under a contract (i.e., contractual services suppliers). Surveys are particularly relevant given that they can be specially tailored, in particular in the case of trade in services surveys. Inward FATS surveys, if they include variables measuring exports and imports of services of the foreign affiliate could possibly include information on the persons (and their numbers) who provide the services as employed contractual services suppliers. For outgoing persons, outward FATS surveys may provide information on employees on service contracts working in the affiliate located abroad. The number of intracorporate transferees/foreign persons directly recruited by affiliates and possibly that of services sellers could also be captured through inward and outward FATS surveys. In particular, outward FATS surveys could allow the identification of employees of the parent company who work in the affiliate as intracorporate employees.

11.32.    As in the case of mode 2 persons, border and household surveys are also an interesting source both for all types of incoming and outgoing employees and for self-employed mode 4 persons. Information regarding residence, as well as identification of the employer-employee relationship of the individuals, will be crucial as household surveys cover only resident persons. Finally, as for mode 2, the data will most probably need to be combined, in particular for compiling breakdowns, to obtain relevant data on the number of mode 4 movements/persons, e.g., through the use of data on characteristics sourced from surveys of persons or households, combined with counts of those crossing borders. Data from partner countries may be particularly useful for capturing the relevant information for sending countries.

Table 11.7 Comparison of data sources for compiling mode 2 movements of persons

(+) implies advantages and (-) implies disadvantages in terms of each element.

Table 11.8    Comparison of data sources for compiling mode 4 persons/trips by category of mode 4

 (+) implies advantages and (-) implies disadvantages in terms of each element.

E. Country experiences      

11.33.    For compiling statistics on the international supply of services, most countries face the challenge of having to rely on several sources with different coverage. The data collection is often done in a context of scarce resources and the necessity of limiting response burden. Therefore, compilers need to make best possible use of available sources. The following examples illustrate some country practices for dealing with the challenge of having to use different data sources and compare their characteristics in order to collect relevant information.

Country experience: Canada  

11.34.    For the majority of statistics on services transactions, apart from travel and transport services, Canada uses a specific survey on trade in services and several industry-oriented surveys. Those enterprise/establishment surveys are supplemented by administrative data that record non-arm’s-length transactions with non-residents. Each source has its own coverage and its own collection of services statistics that are not necessarily equivalent to those of EBOPS. However, as resources are limited and the reduction of response burden is an important objective for Canadian compilers, it is necessary to use several sources to produce the best possible estimates.

11.35.    The industry-oriented surveys of Canada collect different information on revenues and expenses by enterprises/establishments for specific industries. Those surveys offer broad coverage of the services industries, but the level of detail of the collected information is limited. Such surveys are, therefore, complemented by the international transactions on commercial services survey (BP21S) that targets 3,500 enterprises and collects information for 32 categories of services. Transactions are reported by country of trade as well as whether there is a relationship with the  trade partners. The accompanying explanatory notes should, in principle, improve the quality of the responses.

11.36.    Compared with enterprise/establishment surveys, administrative data provide, in principle, better coverage, as all Canadian legal entities are required to fill out the tax form if their total transactions (not only in services) with their foreign related entities are above Can$1 million. For example, for the year 2010, more than 12,000 entities filled the tax form, and half of them reported service transactions. The tax form supplies transactions by name and country of the non-resident entities.

11.37.    However, the tax form is limited to transactions with foreign-related parties. That limitation virtually eliminates Statistics Canada’s capacity to use the administrative information as a data replacement source. In other words, the administrative data could not completely replace survey data. Furthermore, several service categories are aggregated on the form to simplify the work of the respondents. The tax form contains few definitions, which may lead to errors or misinterpretation by the respondents.

11.38.    The annual administrative data files are updated twice a year. As they are an external source, less quality control may be applied on the information they contain. For example, if no transaction is reported for a certain entity, the reason could be the absence of a transaction, but it could also be that the transaction has not yet been processed. Monitoring transactions in services is not the main purpose of the tax form. Thus, verifications by tax authorities are usually done at a more aggregated level, possibly resulting in transactions for the same unit being reported under one activity in one year and under another activity the following year, without further verification.

11.39.     More information on the industry-oriented surveys of Canada and the more specific international transaction in commercial services survey is provided online.

Country experience: Japan  

11.40.          Japan uses an ITRS as a primary data source for compiling trade in services. However, as some transactions cannot be captured through an ITRS, various data sources have been implemented to supplement it. Other data sources include enterprise surveys for specific business based on the Foreign Exchange and Foreign Trade Act, administrative sources and data provided by private institutions. Uses of data sources other than the ITRS for the compilation of trade in services are summarized in table 11.9. More detail on the experience of Japan is given in the online version of the present Guide.

Table 11.9 Japan: sources of trade in service items

Country experience: Philippines  

11.41.          Bangko Sentral ng Pilipinas (BSP) is the lead agency in the compilation of statistics on the international supply of services in the Philippines. BSP is able to compile all the main services accounts, mostly from the bank reports in the ITRS, supported by the company responses to the cross-border transactions surveys (CBTS) and administrative reports from other agencies and industry associations.

11.42.          The main challenge for BSP in the compilation of statistics on the international supply of services is maximizing the benefits of the  ITRS and CBTS. On the one hand, the challenge of BSP in the use of an ITRS is addressing possible misclassification of transactions by banks. On the other hand, BSP is confronted with the challenge of improving the generally low response rate and the coverage of CBTS to include other industries, to better capture relevant international services transactions. The low response rate of surveys stems from the absence of a specific provision in the charter of BSP that would allow it to enforce compliance by non-financial corporations to provide data or information.

11.43.          Reports submitted to BSP by commercial, thrift and foreign banks under ITRS contain information on bank positions in foreign currency-denominated assets and liabilities and all payments and receipts that bring about changes in the banks’ positions.  That information is being used in the compilation of some  services sub-items, such as transport, travel, construction, insurance and pension, financial (including FISIM), charges for the use of intellectual property n.i.e., telecommunications, computer and information services, other business services and personal, cultural and recreational services. 

11.44.          In addition to the monthly CBTS, BSP, in coordination with the department of trade and industry (DTI) also conducts the annual information technology-business process outsourcing (IT-BPO) services survey that covers companies engaged in business process outsourcing (BPO) activities.

11.45.          BSP also uses administrative data provided by regulatory and administrative government agencies, such as customs data, to compile some of the services sub-accounts, including manufacturing services of the physical inputs owned by others, freight import and exports, insurance etc.). The department of foreign affairs (DFA) data on the annual budgets of Philippine embassies and consular offices abroad are used as approximations for payments on government goods and services n.i.e.

11.46.          For non-resident expenditure in the Philippines (travel receipts), data are derived from the visitors sample survey (VSS) conducted by the Department of Tourism (DOT), which provides information on the average expenditure of foreign tourists and their average length of stay in the Philippines.  For tourist-related travel expenditure abroad by residents, data are sourced from the ITRS and CBTS. Beginning with the 1999 report, travel receipts include the expenditure of non-resident overseas Filipinos (OF) in the Philippines during home visits. Travel debits cover expenditures of resident OFs in the host countries in which they are deployed. Information on residents’ credit card expenditures abroad are obtained via reports of the Credit Card Association of the Philippines.