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1504.0 - Methodological News, Mar 2010  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 10/03/2010   
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Update Strategy for Derived Employment Size on Business Survey Frames

In August 2008, the Derived Employment Size (DES), a modelled size variable based on number of payees data, replaced the Derived Size Benchmark (DSB) as the indicator of size on the frames for business surveys. From June 2010, two DES variables will be made available on the frames: a Stratification DES, and a Latest DES which will hold the most up-to-date information and is typically used in estimation. A strategy has been developed for the Stratification DES to allow sizing information for stratification to be updated, while minimising adverse effects on sample rotation.

Because most business surveys stratify by size, changes to the stratification variable can lead to units changing strata and a high likelihood of sampled units being rotated out. Payees information is available to the ABS from the ATO, and for most businesses, this value is updated once a year. This means the DES assigned to most businesses on the frame will be updated once a year. The update strategy for Stratification DES tries to minimise this impact on surveys by spreading the updates over four quarters, and by using "sticky stratification".

Each unit on the ABS Business Register is randomly assigned to an update quarter, and while the Latest DES for each unit will be updated as soon as new information becomes available, a unit is only eligible to have its Stratification DES updated in its update quarter. This way, in each quarter, at most only 25 per cent of the units on the Register could possibly have their stratification size value changed, thus controlling the number of units which would change size groups at any one time.

In addition, a standard set of stratification size groups has been defined. The groups are finer than the stratification size bounds used in ABS economic surveys so that the stratification needs of the surveys can be met. For each stratification size group, upper and lower "sticky boundaries" have been defined. In a unit's update quarter, the unit's Latest DES is compared to its Stratification DES, and only if the Latest DES has moved beyond the sticky boundaries will the unit's Stratification DES be changed. For example, if the 5-19 size group has an upper sticky boundary of 26, then a unit would not move to the 20-49 size group until its Latest DES is greater than 26. This minimises stratum changes of units whose DES fluctuates around a size boundary.

By implementing this strategy, a balance will be achieved between keeping the stratification size information up-to-date, and managing sample rotation.

For more information, please contact Carmen Kong (02) 6252 5944 or carmen.kong@abs.gov.au.


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