WHAT IS MEANT BY ACCURACY
For most users, accuracy is the most sought after attribute of data. Accuracy can be defined as the proximity of an estimate to some notional true value. Because the national accounts draw data from a wide variety of sources, reflecting varying valuations, coverage, frequency, detail and timeliness, it is not possible to produce an objective overall measure of accuracy of the accounts. Instead, assessments need to be made of individual component items within the accounts. Even at this level, the use of multiple data sources in estimating a single item, their variable accuracy over time and changing compilation methods complicate the picture. As a result, assessment of the accuracy of an item requires a high degree of subjective judgement based on knowledge of the sources, the data and the compilation methods used.
In considering the quality of national accounts statistics, it can also be useful to make a distinction between the concepts of accuracy and reliability. Accuracy is the proximity of an estimate to some notional true value while reliability is the proximity of initial and intermediate estimates for a particular period to the 'final' estimate for that period. A series which is never revised is reliable, but it may not be accurate. Although reliability can be objectively measured by an analysis of revisions, it is a relative term and users are likely to have some tolerance to revisions given the trade-offs with other characteristics of quality.
In practice, at least in Australia's national accounts, accuracy and reliability tend to be interwoven and reinforcing. Ideally, as the estimate for a particular period passes through a sequence of revisions, the size of revisions gets smaller (the statistics become more reliable) and the estimate moves closer to the true value (the statistics become more accurate), but in practice this may sometimes not be the case. Revisions can be reduced by delaying the release of statistics until all or most 'final' data sources are available, but this would mean that the statistics would be less relevant to users. ABS policy is to always aim for the most accurate estimate, even though this may be at the expense of more frequent revisions. Chapter 9 of this paper provides a detailed description of the revisions process together with an analysis of the revisions history of quarterly GDP and its components. It also contains information on how the ABS proposes to make information on national accounts revisions available on a more regular basis.
By being aware of the factors that influence accuracy, judgements can be made as to the extent of error likely to be associated with an estimate. Additionally, historical analyses of the revisions that the ABS makes to its estimates of GDP and its components can provide a quantitative guide to the reliability of the statistics produced.