Reconciling Asymmetric Bilateral Trade Statistics
Presentation on the challenges and solutions in reconciling asymmetric bilateral trade statistics for constructing global SUTs. Topics include problems of proportional adjustment, weighted adjustment by reporter reliability index, and alternative approaches like the Reporter Reliability Index (RRI).
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Reconciling Asymmetric Bilateral Trade Statistics In the Construction of Global SUTs Presented by Lin Jones Zhi Wang International Conference on Measurement of Trade and Economic Globalization Aguascalientes, Mexico October 1, 2014 The presentation is not meant to represent in any way the views of U.S. International Trade Commission, or any of its individual commissioner.
Agenda Problems of Proportional Adjustment Weighted Adjustment by Reporter Reliability Index 2
Problems of Proportional Adjustment in National Income Account (Components of U.S. GDP, 2002, US$ in Billion) Value Share 0.575 0.077 0.112 0.072 0.066 0.076 0.004 0.014 0.003 0.001 Adjustment by proportion GDI Components Compensation of employees Indirect businesss tax and nontax liability Private consumption of fixed capital Nonfarm proprietors' income Net interest Corporate profits Businesss transfer payments Rental income of persons Subsidies Farm proprietors' income Sum Gross domestic product Difference Value 5977.4 800.4 1163.9 743.7 684.2 787.4 44.1 142.4 32.5 12.9 10388.9 10446.2 57.3 CV 0.95 2.31 3.56 3.74 5.86 8.35 19.86 23.45 26.51 48.89 32.97 4.41 6.42 4.10 3.77 4.34 0.24 0.79 0.18 0.07 57.30 1 3
Problems of Proportional Adjustment in International Trade Statistics (China & Hong Kong reported exports and partner reported imports, 2004, $ in Million) China reported Exports to Partner country Hong Kong reported domestic exports to partner country China re- exports to partner country via Hong Kong Partner country reported imports from China and Hong Partner Country Statistical discrepancy Kong % Malta 273 5 20 92 -200.4 Russia 9,102 119 361 4,744 -110.4 Korea 27,810 2,111 2,832 32,853 -1.8 Japan 73,222 4,268 11,977 94,911 3.4 4
Alternative: Weighted Adjustment with Reporter Reliability An indicator of reporter reliability is a measure of how consistent a country reports its trade statistics relative to all its trading partners. The indicator needs to address three issues: The difference of reporting countries in reported bilateral trade; What should be captured by the measure; Sector- and country-specific reliability information for each country as an exporter and importer. The indicator should be able to capture the strength and weakness of a country s ability to consistently report its trade for each end use categories in different commodities. 5
Reporter Reliability Index (RRI) Gehlhar (1996) developed the Reporter Reliability Index, which was also used in Wang et al. (2010), and Tsigas et. Al. (2012). RRI is calculated as the share of accurately reported trade in a reporter s total trade for a particular end use category in a sector using a threshold level (e.g. less than 20 percent discrepancies in mirrored data). Constructing RRI uses all available bilateral trade data and assesses reporter reliability from a complete set of global reporting partners. It has a value between 0 and 1. The larger the value is, the relatively more reliable the reporting country is in reporting trade statistics. Using RRI will encourage the reconciliation model to adjust those unreliable data more than those reliable ones in the reconciliation process. 6
Average Exporter Relative Reliability Index (1995-2007, China) Commodity Food and beverages (15) Chemicals (24) Basic metals (27) Wood and products (20) Paper and paper products (21) Wearing apparel (18) Rubber and plastic products (25) Auto and Parts (34) Leather products (19) Electrical machinery (31) MEAN 0.81 0.78 0.72 0.60 0.53 0.24 0.14 0.09 0.09 0.07 CV 0.06 0.12 0.17 0.39 0.31 0.56 0.65 1.08 0.24 1.09 MIN MAX 0.71 0.63 0.46 0.29 0.22 0.04 0.07 0.02 0.05 0.03 0.88 0.88 0.89 0.87 0.80 0.42 0.39 0.36 0.14 0.33 7
Average Importer Relative Reliability Index (1995-2007, the United States) Commodity Auto and Parts (34) Wood products (20) Machinery and equipment (29) Paper and paper products (21) Food and beverages (15) Textiles (17) Wearing apparel (18) Tobacco products (16) Leather products (19) Printed and recorded matter (22) MEAN 0.95 0.92 0.91 0.91 0.85 0.55 0.54 0.50 0.30 0.16 CV 0.02 0.05 0.06 0.06 0.04 0.19 0.10 0.34 0.34 0.60 MIN MAX 0.92 0.83 0.77 0.79 0.80 0.39 0.43 0.17 0.16 0.05 0.97 0.97 0.97 0.95 0.90 0.71 0.61 0.71 0.48 0.40 8
1.0 3.0 Average Exporter Relative Reliability Index Basic Metal (ISIC 27), 1995-2007, WIOD countries 2.5 0.8 2.0 0.6 1.5 0.4 1.0 0.2 0.5 0.0 0.0 ROW MEX HUN MLT SWE ROM CHN GRC JPN FIN KOR IND IDN ITA IRL TWN ESP EST PRT SVK DEU TUR BRA LUX LVA USA SVN FRA DNK LTU CZE AUT POL NLD BEL BGR CAN GBR AUS CYP RUS MEAM CV Average Importer Relative Reliability Index Basic Metal (ISIC 27), 1995-2007, WIOD Countries 1.0 3.0 2.5 0.8 2.0 0.6 1.5 0.4 1.0 0.2 0.5 0.0 0.0 ROW MLT MEX HUN SWE GRC ROM CHN FIN JPN IDN IND IRL ITA KOR TWN ESP EST SVK USA PRT LUX SVN DEU BRA LVA TUR DNK FRA AUT BGR LTU BEL NLD POL CZE CAN GBR CYP RUS AUS 9
1.0 4.0 Average Exporter Relative Reliability Index Wearing Apparel (ISIC 18), 1995-2007, GTAP countries 0.8 3.0 0.6 2.0 0.4 1.0 0.2 0.0 0.0 PRT PRY FRA PAN MEX MLT BLZ IRL IND IDN LTU JPN CIV ZMB NIC HKG TTO SGP SVN SVK SYC SWE PER ITA KOR ROM CHL COL USA CHE GRL OMN HRV HUN SLV GRD UGA FIN NOR GRC CHN HND MKD AUS GTM CYP MDG CAN MYS URY ISL ISR ESP MUS ARG EST AUT GBR VCT DNK THA BOL MWI CRI EGY MAC TUN BRA POL TUR MAR CZE NZL LVA ECU LCA BDI MDV DEU NLD DZA NER 1.0 4.0 Average Importer Relative Reliability Index Wearing Apparel (ISIC 18), 1995-2007, GTAP countries 0.8 3.0 0.6 2.0 0.4 1.0 0.2 0.0 0.0 MLT ZMB JPN MEX PRT FRA PRY KOR LTU IRL IND TTO CIV IDN HKG TZA BLZ NIC SGP SWE SVK SYC SDN SVN ITA USA OMN PER ROM GMB COM CHL CHE GRL COL GRC HUN ESP SLV EST GRD UGA HRV FIN NOR HND CHN CYP MDV MKD AUT MEAN MDG GTM MAR AUS CAF MAC ARG GBR URY DNK CAN MUS ISL CMR MYS TUN ISR ECU TUR BRA CRI LVA LCA THA BOL DEU NLD CZE VEN CV BDI NZL NER POL DZA 10
Source Gehlhar (1996). Reconciling Bilateral Trade Data for Use in GTAP. Wang, Gehlhar, and Yao (2010). A Globally Consistent Framework for Reliability-based Trade Statistics Reconciliation in the Presence of an Entrepot. Tsigas, Wang, and Gehlhar (2012). How a Global Inter- Country Input-Output Table with Processing Trade Account Can be Constructed from GTAP Database. 11
Thank You! 12
