Towards a Better Integration of Towards a Better Integration of Survey and Tax Data in the Unified Survey and Tax Data in the Unified

Enterprise SurveyEnterprise Survey

Claude Turmelle

Statistics Canada

ICES-III Montréal, Québec, Canada

June 18-21, 2007

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Outline

Overview of the UESCharacteristics of the target populationCurrent use of tax data

At samplingAt imputationAt estimation

Issues and ChallengesTowards a better use of tax dataConclusion

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Overview of the UES

Unified Enterprise Survey (UES) started in 1997Objectives

Integrate all annual business surveys into one unified survey frameworkTo produce quality financial and commodity estimates

National and sub-national levelsIndustrial levels

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Overview of the UES

Target populationAll Canadian businesses within the covered industriesThe UES is an Establishment based survey

Coverage over time1997: Seven Industries1998: Sixteen more (including Wholesale)1999: Four more (including Retail)2000: Four more (including Manufacture)….2007: Now covers over 60 major industries

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Characteristics of the Target Population

Divided into two main types of businesses: unincorporated (T1) and incorporated (T2)

General Index of Financial Information (GIFI) data are available electronically for the entire T2 population

T1 data are only available electronically for about half the T1s (e-filers)

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Characteristics of the Target Population

An enterprise is Complex: Multi-provincial and/or Multi-industry and/or Multi-legal Simple: The opposite

An enterprise is alsoSingle: Only one establishment Multi: More than one establishment

Simple-Single enterprises represent about 95% of the population, although only about 40% of the economy

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Current Use of Tax Data

Why would someone use tax data?Improve efficiency of the sample design

Reduce the response burden

Reduce the collection cost

Improve quality of the estimates

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Current Use of Tax Data

At samplingSome key variables taken from different tax files are put on the sampling frame

Total Revenue, Total Expenses from GIFI

Total Sales from Goods & Services Tax (GST)

Salaries & Wages, # Employees from Payroll Deductions (PD7)

Used to define a size measure (Total Revenue) for each establishment on the frame

Used to stratify the population by size and to define the Take-None (T-N) portion

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Current Use of Tax Data

At imputationUsed to replace survey data (financial variables) for a predetermined sub-sample of selected Simple-Single units

Also used to replace survey data for some non-respondents

Used as auxiliary data during imputation

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Current Use of Tax Data

At estimationGIFI data are used to produce estimates for all T2 units falling in the T-N portion

T1 e-filer data are used to produce estimates for all T1 units falling in the T-N portion

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UES Survey Design at a GlanceT2

T2 Take-None:

Census of GIFI

EXCLUSION THRESHOLD

Main sample to be surveyed

For variables available from tax:

Total estimate = Survey estimate (T1,T2) + T2 Take-None + T1 Take-none e-filer estimate

For variables not available from tax (Characteristics):

Total estimate= Survey estimate (T1, T2)

Not eligible for tax : full questionnaire

Tax replaced

Characteristic quest. (services surveys) or full questionnaire (other surveys)

T1

Main sample to be surveyed

T1 Take-None:

Sample of e-filers

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Issues and Challenges

At samplingSometimes we get inconsistent tax data

Ex: GIFI Total Revenue=$2M

GST Total Sales=$25M

What do we do?We use a conservative approach, i.e. we take the maximum

We manually verify and adjust the extreme cases (we’ll make use of survey data if available)

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Issues and Challenges

At sampling (cont’d)Sometimes all we get is # Employees or Salaries & Wages (Revenues = . or $0)

What do we do?We model Total Revenue using what’s available

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Issues and Challenges

At imputationSometimes we can’t find the link to tax data (ex.: not-for-profit organizations)

Sometimes we link to 2 or more tax files

We currently use direct tax replacement (i.e. Ysurvey = Xtax). Should we instead use a modelling approach (i.e. Ysurvey = f(Xtax)?

Studies have shown that in some cases it might be more appropriate to use f(X)

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Issues and Challenges

At estimationCurrently, we use the one-phase Horvitz-Thompson estimator

It’s a very simple, and fairly efficient estimatorUnfortunately, it could be severely biased if the model y = x doesn’t hold

unitsreplacedTaxforx

irequestionnathroughcollectedunitsforyywhere

ywY

i

ii

si

ii

*

*1

ˆ

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Issues and Challenges

At estimation (cont’d)Estimates for variables not available from tax file (characteristics/commodity) do not cover the T-N portion

For some characteristics the T-N portion can count for a lot more than 10%

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Issues and Challenges

Data qualityResponse rates (What is a respondent?)

Respond to tax but not to the characteristic questionnaire

Reported tax data vs imputed tax data

Planned tax replacement vs tax replacement for non-response

Variance & CVA lot of imputation occurs in the current strategy (incl. tax replacement)

Shouldn’t we include the variance due to imputation?

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Towards a Better Use of Tax Data

Understand the particularities of the different tax data sources (ex.: GST vs T2 is currently under investigation)

Explore different administrative files to help with particular sub-populations (ex.: not-for-profit organizations)

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Towards a Better Use of Tax Data

Keep investigating why Ysurvey ≠ Xtax even when they should conceptually be equal

Explore the idea of using Ysurvey = f(Xtax)

Fine-tune our definition of who is eligible for tax replacement and who is not

Currently studying the possibility of using a more robust estimator to protect against the potential bias

Developing a strategy to cover the entire population for all variables of interest

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Start taking into account the variability introduced by imputation when computing variances and CVsA framework is under development to define response rates when both tax data and survey data are used for the same unitsExplore the possibility of making use of all the GIFI data, not only for the T-N and the sample

Towards a Better Use of Tax Data

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Towards a Better Use of Tax DataT2

T2 Take-None:

Census of GIFI

EXCLUSION THRESHOLD

Main sample to be surveyed

For variables available from tax:

Total estimate = Survey estimate (T1,T2) + T2 Take-None + T1 Take-none e-filer estimate

For variables not available from tax (Characteristics):

Total estimate= Survey estimate (T1, T2)

Not eligible for tax : full questionnaire

Tax replaced

Characteristic quest. (services surveys) or full questionnaire (other surveys)

T1

T1 Take-None:

Sample of e-filers

Eligible Ineligible

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Conclusion

Since the introduction of the UES, the use of tax data has increased consistently

It has significantly reduced response burden and the cost of the survey

Unfortunately, sometimes at the expense of a reduced data interpretability

Fortunately, it was recently decided that we would take a few steps back to evaluate how we currently do things, and to determine how we could improve our strategy

Pour plus d’information, veuillez contacter

For more information please contact

Visit our web site atwww.statcan.ca

Claude Turmelle(613) 951-3327

claude.turmelle@statcan.ca