TECHNICAL NOTE 1 ESTIMATION METHODOLOGY


INTRODUCTION

1 The availability of Business Activity Statement (BAS) data collected by the Australian Taxation Office (ATO) has provided the Australian Bureau of Statistics (ABS) with opportunities to improve the efficiency of collection designs and estimation for its business surveys, while at the same time reducing the reporting burden placed on businesses. Under taxation law, data may be passed by the Commissioner for Taxation to the ABS for specified statistical purposes. Accordingly, turnover and wages information sourced from ATO BAS data was used to improve the accuracy of the 2011-12 industry estimates which were produced using data items collected directly by the ABS from businesses.


ESTIMATION METHODOLOGY

2 The 2011-12 survey continues to use generalised regression estimation, first introduced in the 2006-07 survey. This estimation method enables maximum use of observed linear relationships between data directly collected from businesses in the survey and auxiliary information. When the auxiliary information is strongly correlated with data items collected in a survey, the generalised regression estimation methodology will improve the accuracy of the estimates. The auxiliary variables used in this survey were turnover and wages sourced from the BAS data of 1,963,294 businesses (including the direct collect sample).


PRODUCING ESTIMATES

3 The following diagram illustrates the ways in which Australian businesses contribute to the estimates in this publication.

DATA STREAMING

4 For the purpose of compiling the estimates in this publication, data for businesses as recorded on the ABS Business Register (ABSBR) contribute via one of three categories (or 'streams') in accordance with significance and collection-related characteristics.


Completely enumerated (CE) stream:

5 The CE stream consists of directly collected survey data for those units recorded on the ABSBR as having employment of at least 300, plus additional economically significant units and units significant to small state estimates.


Generalised regression estimation stream:

6 The generalised regression estimation stream comprises directly collected data for those sampled units which are not in the CE stream and have turnover, in aggregate, above the bottom 2.5 percentile of BAS sales for that industry, or are identified as employing businesses (based on ATO information).


Business Activity Statement (BAS) stream:

7 The BAS stream comprises data for those non-employing businesses in the Non-profiled Population whose turnover, in aggregate, is below the bottom 2.5 percentile of BAS sales for that ANZSIC subdivision.

8 Estimates for each of the selected industries were produced by aggregating the contributing data streams.


REVISIONS

9 In previous versions of this publication BAS data for 'micro non-employing businesses' (i.e. businesses in the BAS stream) were added to the directly collected estimates by substituting turnover, non-capitalised purchases, capitalised purchases and wages and salaries reported to ATO for income from sales of goods and services, purchases, capital expenditures and wages and salaries collected on the survey form. Due to conceptual and definitional differences between BAS and survey data items this approach occasionally led to inflated or skewed estimates. To improve the quality of estimates the data substitution was replaced with modelling techniques. That technique uses BAS non-capitalised purchases to model purchases and BAS turnover to model income from sales of goods and services. The modelling parameters were based on the relationship between BAS data and reported data for small businesses in the direct collect sample over the previous 3 years and were defined at the industry level. Wages and salaries and capitalised purchases were modelled as 0; therefore revised estimates only consist of data from the direct collect sample.


STATE AND TERRITORY ESTIMATES

10 State estimates were produced using both BAS data and survey data.