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Are partner-country statistics useful for estimating"missing"trade data?

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  • Yeats, Alexander J.

Abstract

Because many developing countries fail to report trade statistics to the United Nations, there has been an interest in using partner-country data to fill these information gaps. The author used partner-country statistics for 30 developing countries to"estimate"actual (concealed) trade data and analyzed the magnitude of the resulting errors. The results indicate that partner-country data are unreliable even for estimating trade in broad aggregate product groups such as foodstuffs, fuels, or manufactures. Moreover, tests show that the reliability of partner-country statistics degenerates sharply as one moves to more finely distinguished trade categories (lower-level SITCs). Equally disturbing, about one-quarter of the partner-country comparisons take the wrong sign. That is, one country's reported free-on-board (f.o.b.) exports exceed the reported cost-insurance-freight (c.i.f.) value of partners'imports. Aside from product composition, tests show that partner-country data are equally inaccurate for estimating the direction of trade. Why are partner-country data so unreliable for approximating"missing"data? Evidence shows: 1) problems in reporting or processing COMTRADE data; 2) valuation differences (f.o.b. versus c.i.f.) for imports and exports; 3) problems relating to entrepot trade, or exports originating in export processing zones; 4) problems associated with exchange-rate changes; 5) intentional or unintentional misclassification of products; 6) efforts to"conceal"trade data for proprietary reasons; and 7) financial incentives to purposely falsify trade data. The author concludes that efforts to improve the general quality, or availability, of trade statistics using partner-country data holds little or no promise, although this information may be useful in specific cases where the trade statistics of a certain country are known to incorporate major errors. Significant progress in ugrading the accuracy, and coverage, of trade statistics can be achieved only by improving each country's procedures for data collection.

Suggested Citation

  • Yeats, Alexander J., 1995. "Are partner-country statistics useful for estimating"missing"trade data?," Policy Research Working Paper Series 1501, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1501
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    References listed on IDEAS

    as
    1. Yeats, Alexander J, 1978. "On the Accuracy of Partner Country Trade Statistics," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 40(4), pages 341-361, November.
    2. Sheikh, Munir A, 1974. "Underinvoicing of Imports in Pakistan," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 36(4), pages 287-296, November.
    3. Robert E. Lipsey & Merle Yahr Weiss, 1974. "The Structure of Ocean Transport Charges," NBER Chapters, in: Explorations in Economic Research, Volume 1, Number 1, pages 162-193, National Bureau of Economic Research, Inc.
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    2. Janse, Gerben, 12. "Forest Products Trade Flow Discrepancies--Unintentional and International Errors," Scandinavian Forest Economics: Proceedings of the Biennial Meeting of the Scandinavian Society of Forest Economics, Scandinavian Society of Forest Economics, issue 40, May.
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    6. Cubinar, Gloria A. & De Guzman, Estela T., 2008. "Exploratory Study on Selected Philippine Agricultural Commodity Import Statistics vis-à-vis Export Statistics of the Exporting Countries," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 5(2), pages 1-27, December.

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