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Country Experience: Israel: Imports Industry Destination Survey (ch. 3)

One of the objectives in the fifth revision of the Broad Economic Categories classification is to summarize trade by broad economic categories and by the end-use of the products.

Determining the end-use for economically important (or less) products is not so trivial for the majority of the goods. Let's take for example not roasted coffee grains. It could be assumed that the only use is as an input (intermediate consumption) for instant coffee production. In some cultures not roasted coffee is bought by households and roasted by households itself, in this case the end-use of "coffee grains not roasted" should be classified as private consumption. The example above shows that there are not goods that have one end-use only.

As it is recommended the Foreign Trade Sector at the Israel's Central Bureau of Statistics (ICBS) has conducted this kind of survey since 1965. It classifies the imports of commodities by use: for consumption (by households, non-profit institutions or the government), as production inputs and for capital formation – classified by the economic industries of the importers. The resulting classification is used as the basis for the yearly and monthly imports of commodities time series published regularly by the Central Bureau of Statistics. In addition, the results of the Import Destinations Survey are used in the preparation of input-output tables and in the preparation of several of the national accounts time series published regularly.

Import Destination Survey. The survey is conducted to create a better understanding of the uses of commodities imported to Israel. The information, which his collected from importers and administrative sources, served as basis for the classification of the imported commodities by economic activity/industry. It includes the "industry of destination" (economic activity in which the imported commodities were used). The results of the survey are used as the basis for the classification of the yearly and monthly imports of commodities and national accounts time series published by the Central Bureau of Statistics. In addition, the results of the Import Destinations Survey are used in the preparation of input-output tables which are published by the Bureau.

The estimates are based on data collected using three different processes. Direct importers that are surveyed using an abbreviated questionnaire attached to the questionnaire of the Survey of Products and Materials in Manufacturing.

Commodities imported by indirect importers (those that were not included in the population of the Products and Materials in Manufacturing survey) were surveyed using a dedicated sample.

The third process comprises the investigation of commodities using data received from the Israel's Customs Office coupled with data from other administrative sources. This process includes, for example, classification of cars (private consumption or investment) based on matching the Car Register from the Ministry of Transport, the Business Register and Customs data. Other commodity groups as car parts, fuels and medicaments, were investigated under this category.

As stated, the importers list was divided in two main groups: direct and indirect importers

       1.  Direct importers – Are those who import commodities as inputs for production or for capital formation. The industry of destination of the commodities imported by direct importers, who, as mentioned, are manufacturers, was determined by the industry of the importer-manufacturer, according to the classification in the Business Register of the Central Bureau of Statistics.

These importers were divided into two sub-categories:

a)      Importers which function only as "direct importers" (import goods for self-use only = intermediate goods for production or import investment goods for …)

b)      Importers which function as "direct importers" and "indirect importers" as well. For example a pasta factory that not only produce pasta but also import ready pasta and sell it with no other processing.

       2.  Indirect importers – Includes importers who engage in trade. Determining the industry of destination of the importer of goods in this framework was done through questionnaires and a direct approach via telephone, fax and, in some cases, a personal interview with the importers. These importers were asked who the customers who purchased the commodities were. Each importer was presented with a list of the commodities which he imported during the survey year.

Investigation unit

The investigation unit in the Imports Destinations Survey is the commodity. As the commodities are freed by the Customs, they are entered in a Customs entry form that contains data such as the value of the commodities, the importer, country of purchase, country of origin and more.

In the survey questionnaire, the unit of investigation (commodity) was presented in a consolidated form, after the value of all entry forms from an importer containing a specific commodity was summed up, even if the commodity was imported at different times during the relevant year.

The sampling population of indirect importers included all the indirect active importers.

All commodities investigated using administrative sources are excluded from the sampling population. The sampling unit is the importer and every importer provided data regarding all the commodities imported by him. The final sample of the survey was comprised of X importers sampled using the probability proportional to size (PPS) sampling technique. The size for every importer was calculated based on the total value of imports of the different commodities (representing the importance of the commodity), the value of each commodity imported by each importer and the representation of the commodities in the Products and Materials in manufacturing survey.

A final file resumes the proportion of each item and the correspondence between HS, BEC, CPC, SITC and other classifications.

Surveys should clarify the proportions of imported goods used for intermediate or final consumption, or fixed capital formation as the Israeli experience shows.