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5342.0 - Balance of Payments Statistics, Information Paper on Quality , 1996  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 20/02/1996   
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2.4. Sampling procedures are used in several collections from which balance of payments estimates are compiled. These include:

      • the ABS Survey of Foreign Investment, which measures major components of investment income and the capital account;
      • the Bureau of Tourism Research's International Visitor Survey, which provides estimates of per capita expenditure of non-residents visiting Australia and their average earnings during their stay;
      • the ABS Survey of Returned Australian Travellers, which provides estimates of per capita expenditure and earnings by Australian residents while abroad;
      • the ABS overseas arrivals and departures statistics which, together with the International Visitor Survey and the Survey of Returned Australian Travellers, are used in measuring parts of the travel and labour income items; and
      • the ABS International Trade in Services Survey, which collects information on Australia's imports and exports of selected services and details of amounts payable and receivable by Australia for royalties, use of copyrights and licences etc.

2.5. Sample error provides a mathematical measure of the difference between an estimate derived from a sample survey and the true value that would be obtained if the whole population were enumerated. One measure of the likely difference is given by the standard error. Table 1 provides approximate standard errors on Australia's balance of payments statistics for the year 1993-94. When estimating sample error for aggregate series within the balance of payments, independence is assumed between each of the sample surveys used in compiling the balance of payments.

2.6. There are about two chances in three that a sample estimate will differ by less than one standard error from the figure that would have been obtained if all the population were enumerated, and nineteen chances in twenty that the difference will be less than two standard errors. For example, the table shows that income debits (broadly, income earned by non-resident owners of resources from the use of those resources by residents) are estimated as $21,597 million with a standard error of $277 million. Therefore, there are about two chances in three that the true figure lies within the range $21,320 million to $21,874 million and nineteen chances in twenty that it lies in the range $21,043 million to $22,151 million.

2.7. Table 1 shows that there are no standard errors associated with merchandise exports, merchandise imports and unrequited transfers (these data are not based upon sample collections). The relative standard errors for services and income debits transactions are 1% or less. Income credits (principally income earned on Australian investment abroad) has a higher relative standard error of 3%.

2.8. Care is needed in interpreting relative standard errors on net items (net services, net income, net transactions in each of foreign investment in Australia and Australian investment abroad, all the current and capital account balances, and the balancing item). The relative standard error will greatly increase as the value of a net item approaches zero. For example, while the relative standard error on net capital account transactions classified as Australian investment abroad was only 1% in 1993-94, it was 9% in 1992-93, when the net value of transactions was much smaller ($2,959 million). In 1990-91, when the extent of netting was less, the relative standard error was 5%. In the table, relative standard errors have been shown for the balances on the current and capital account, net foreign investment in Australia and net Australian investment abroad because these measures are generally significantly different from zero and are also the focus of analytic attention.

2.9. The ABS keeps sample errors under review and attempts to ensure that they are within acceptable limits. Taking account of the issue of netting in evaluating sample errors, the sample errors shown in Table 1 for annual balance of payments series are considered to be within those limits. The relative standard errors on quarterly data are usually higher for gross measures.



1: BALANCE OF PAYMENTS, AUSTRALIA, 1993-94, ANALYSIS OF APPROXIMATE STANDARD ERRORS
Value
Standard error
Relative
standard
error
Aggregate
$m
$m
$m

Current account
Merchandise exports
63 896
. .
. .
Merchandise imports
64 400
. .
. .
Balance on merchandise trade
- 504
. .
. .
Services credits
18 274
51
-
Service debits
18 967
27
-
Net services
- 693
58
. .
Income credits
5 835
159
3
Income debits
21 597
277
1
Net income
- 15 762
319
. .
Unrequited transfers credits
2 820
. .
. .
Unrequited transfers debits
2 624
. .
. .
Balance on current account
- 16 763
325
2
Capital account
Foreign investment in Australia
30 903
309
1
Australian investment abroad
- 14 580
175
1
Balance on capital account
16 323
355
2
Balancing item
440
481
. .

Source: Balance of Payments, Australia, December Quarter 1994 (5302.0).





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