1. Ag.9.3 Preparation of 2018 exercise
Doc. A6465/18/10
Ag.9.3 Preparation of 2018 exercise
Working Group on Articles 64 and 65 of the Staff Regulations
Meeting in Luxembourg March 2018

2. Content of this presentation
WEIGHTS
1st test using 2016 data presented WG2017
From BH57 to BH80 weights (just ECP locations)
New test using 2017 data now presented WG2018
Approach 1: From BH57 to BH80 (all locations)
Approach 2: UN data used to produce regional weights
Comparison of results
PRICES
WORKFLOW (early warning system)

3. Introduction
Decision taken 2016 WG Art 64/65 in order to harmonize and make consistent data between Extra-Intra/EU & UN & ISRP-ECP.
This presentation is about the updating of the expenditure weights derived from the family budget surveys used since 2010.

4. 1st test: 2016 data, presented WG 2017
PPPs & weights are received at 80BHs, for 12 ECP DS (not 5x Balkans). Over 1 year coverage the % diff max is 0.7%.

5. 2nd test: 2017 data, presented WG 2018
Two test approaches:
Approach 1: Conversion of current set of data (Common Weights) from 57BH to 80BH
Approach 2: Replacement of current set of data (Common Weights) with UN data converted to 80BH and used to construct Regional Weights.

6. Important note about 2017 tests
In both approaches it is assumed that the same PPP as applies at the 57BH aggregate level will also apply to each of the underlying 80BH.
Conversion of old UN structure to 80BH was rather complex as some in our 80BH structure do not exist in the UN one. Will be easier in future as classifications harmonised.
29 of the 144 EU DS were excluded: the 12 duty stations with CC=0 and 17 DS for which CCs are already established using 80BH (7 ECP-ISRP + 10 ECP-ESTAT).
The sample is therefore constituted of 115 DS

7. Approach 1: Conversion from 57BH to 80BH
-Impact limited, average
change of %
-Std Deviation 1.691%
-Cluster range +-2%
-Despite outlier:
- China (+10.35%)
- Gabon (-2.72%)

8. Approach 1: Impact of magnitude
% change
Value
Mean (μ)
0.523%
Standard deviation (σ)
1.691%
Minimum (Gabon)
-2.72%
Maximum (China)
10.35%
Change (Δ) = 0
Change > 0
(62.6%)
Change < 0
(37.4%)
Change between μ + σ
(39.1%)
Change between μ - σ
(38.3%)
100%
77.4%

9. Approach 1: Impact on DS CC>100

10. Approach 2: UN weights used
-Impact larger, average change of -2.76% -Std Deviation 3.87% -Cluster range +3% -7% -Outliers: -Chile (+18%) -Philippines (+13%) -Russia (-15%)

11. Approach 2: Impact of magnitude
% change
Value
Mean (μ)
-2.762%
Standard deviation (σ)
3.87%
Minimum
-15.44%
Maximum
18.26%
Change (Δ) = 0
Change > 0
(16.5%)
Change < 0
(83.5%)
Change between μ + σ
(30.5%)
Change between μ - σ
(53.0%)
100%
83.5%

12. Approach 2: Impact on DS CC>100

13. Approach 1 / approach 2
Impossible to say if impact reflects genuine differences in expenditure figures or if it is due to time gap between EU survey (2010) and more recent UN surveys (2010 – 2016):
differences in sample size and composition,
differences in economic environment
However, approach 2 gives greater precision and may therefore be preferable

14. Comparison at COICOP 12 groups level

15. Price data -1 UN P2P surveys Complementary data collection for Group 2
All surveys to spring 2016 received and integrated
Survey planning
7 duty stations not surveyed within 7 years target
Complementary data collection for Group 2
Cars
Flights (to/from BXL rather than NYC)
Communication (to/from BXL rather than NYC)
RTPC items (Real Time Price Comparisons)

16. Price data -2 ECP data from ESTAT and ISRP for 17 places
Possible data for Israel, Chile in 2018
CPI availability
5 duty stations with long extrapolation time series…may stop CC publication in 2018 (Barbados, Congo, Central African Rep, Gabon, Myanmar)

17. Workflow No calendar change for data exchange/reporting
“Early warning system” for administration (where possible)
CC > 100 become CC < 100
CC < 100 become CC > 100
cease CC production (events, 7 year rule, CPI age)
start CC production
Corollary: early information about staff changes, opening/closing delegations, etc.

18. Conclusion:
Delegates are invited to give their endorsement for the proposed approach for weighting structures
And take note of the other information presented in this document

19. Thank you for your attention!