1. Validation in International Trade in Goods Statistics Lídia Bassó
Hungarian Central Statistical Office Dpt. of Services and External Trade Statistics
Validation in International Trade in Goods Statistics
Lídia Bassó
MEDSTAT study visit on ITGS Budapest, May, 2013

2. Abbreviations AVG – average
CN8 – 8-digit commodity code of the Combined Nomenclature
NoT ˜– nature of transaction
NSI – National Statistical Institute
STD – standard deviation
SU quantity – quantity measured in supplementary unit

3. Topics covered Validity checking Credibility checking
Types of credibility errors
Credibility checking at trader level
Credibility checking at item level
Calculation of credibility ranges
Manual adjustments of credibility ranges
Priority setting of credibility errors
Process of credibility checking & correction

4. Validity checking Clear-cut if data are right or wrong
Individual compulsory boxes are filled in with valid codes or figures
Customs checks and corrects them
NSI checks them again
Logical connections between boxes within the item (record)
NSI checks
CN8 and mode of transport – which commodities might be transported by
fixed transport installations (e.g. gas, oil)
own propulsion (vehicles)
Some limits in the text of CN8 for unit value or unit net mass

5. Credibility checking
Most often using several data within the item for checking
NOT clear-cut if data are right or wrong
More or less suspicious data for the statistician
Statistical checks

6. Types of credibility errors
Definite error (D)
when error is very likely
MUST always be checked and corrected / accepted
Possible error (P)
suspicious data
to be checked acc. to priority order

7. Credibility checking at trader level (P)
New CN4 or country code / flow declared by trader
for which trade fairly concentrated in the past 24 months
number of CN4 codes declared ≤ 10 or
number of countries declared ≤ 4
AND
value of trade on the new code exceed a given value ( €)

8. Credibilty checking at item level
Same stat. value for more items within one declaration (P)
Net mass or suppl. quantity > stat. value (1€ ~ 275 HUF) (D)
Stat. value / invoice value > 2 or < 0,5 (P)
Some CN codes always checked with trader if it is correct (D)
excluded by regulation (4907, )
vessels & aircraft, treasures of art
Items of high value (imp. 4 million €; exp. 8 million €) (D)
Credibility ratios (D) or (P)
value / net mass
(value / SU quantity)
(net mass / SU quantity )

9. Credibility ranges Defined for credibility checking of CN8s/flow
Aim – control credibility ratio(s) of declared items
unit value
credible D P P D

10. Calculation of credibility ranges (1)
Calculated for credibility ratios of CN8s/flow, quarterly from
item level credibility ratios of the past 12 months
NoT code 11 only,
excl. some spec. CN8 codes where variety of ratios is extreme
Data cleaning
some of the highest and lowest ratios (outliers) excluded
Calculation based on variability of the item level credibility ratios

11. Calculation of credibility ranges (2)
Intervals where the credibility ratios are accepted.
IF THEN
Coefficient of variation (%)
Credibility range from AVG (x)
0 – 9
1/1.5x – 1.5x
10 – 19
1/2x – 2x
20 – 39
1/3x – 3x
40 – 59
1/4x – 4x
60 – 79
1/5x – 5x
80 – 89
1/6x – 6x
90 – 99
1/7x – 7x
100 –
1/8x –8x
products of low variability
products of high variability

12. Manual adjustments of credibility ranges
Changing upper and/or lower limit of the general range
e.g. limit in text of CN8
next automatic calculations can not overwrite
Defining individual limits by CN8/flow/trader

13. Priority setting of credibility errors (1)
Value of transaction (€)
Declared item’s difference form its credibility limit
< 2x
2x – 5x
5x – 10x
10x – 100
100x <
Low var.
High var.
< 200 9
201 – 2 000 8 3 7 1 2
2 001 – 8 000 6 4
8 001 – 5 D
<

14. Priority setting of credibility errors (2)
Type of credibility error
Priority
Same stat. value for more items within one decl. 1
Stat. value / inv. value > 2 or < 0,5
1/2/3/9
New CN4 or country at trader level 2
Depending on stat. value
When more errors with different priorities in one item, the highest one is the overall priority.

15. Process of credibility checking & correction
A programme selects credibility errors, allocating priorities
Checking/correction by
contacting trader about definite errors (error list sent by post)
expert correction on the basis of past info (until answer arrives) + phone calls when urgent
Direct contact with traders, never sent back to Customs!
IT application running on PCs (with all necessary info available) to
manual checking & correction of credibility errors
set manual credibility limits

16. Checking validity of traders’ total values (TV)
For the top 100 traders
Aim – detection of outliers
Classifying total value / trader /flow of the ref. month on the basis of its own last 12 months’ average, minimum, maximum values
accepted if AVG * 0.5 ≤ TV ≤ AVG * 2
suspicious if min. ≤ TV ≤ max.
upper outlier if not accepted and. TV > max.
lower outlier if not accepted and TV < min.
no value if TV = 0
can not be classified if AVG = 0 (no past data)
List of the outcome
Manual checking, consultation with traders

17. Thanks for your attention! lidia.basso@ksh.hu