TECHNICAL NOTE 2 DATA QUALITY


RELIABILITY

1 The estimates in this release are based on information obtained from a sample survey (EAS) and from administrative data collected by the ATO. Any collection of data can be affected by factors that affect the reliability of the resulting statistics, regardless of the methodology used. These factors result in non-sampling error. In addition to non-sampling error, sample surveys are also subject to inaccuracies that arise from the fact that a sample was selected rather than conducting a census. This type of error is called sampling error.


Sampling error

2 The majority of data contained in this publication have been obtained from a sample of businesses. As such, these data are subject to sampling variability; that is, they may differ from the figures that would have been produced if the data had been obtained from all businesses in the population. One measure of the likely difference is given by the standard error, which indicates the extent to which an estimate might have varied by chance because the data were obtained from only a sample of units. 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 units had been included in the collection, and about nineteen chances in twenty that the difference will be less than two standard errors.

3 Sampling variability can also be measured by the relative standard error (RSE), which is obtained by expressing the standard error as a percentage of the estimate to which it refers. The RSE is a useful measure in that it provides an immediate indication of the percentage errors likely to have occurred due to the effects of random sampling, and this avoids the need to refer also the size of the estimate. Selected data item RSEs at the industry division level for Australia are shown in the table overleaf. Detailed relative standard errors can be made available on request.

4 To illustrate, the estimate of total income for Transport, postal and warehousing in 2008-09 was $134,647m. The RSE of this estimate is shown as 1.9%, giving a standard error of approximately $2,558m. Therefore, there are two chances in three that, if all units had been included in the survey, a figure in the range of $132,089m to $137,205m would have been obtained, and nineteen chances in twenty (i.e., a confidence interval of 95%) that the figure would have been within the range of $129,531m to $139,763m.

5 The size of the RSE may be a misleading indicator of the reliability of some of the estimates for (a) operating profit before tax, (b) earnings before interest, tax, depreciation and amortisation and (c) industry value added. It is possible for an estimate legitimately to include positive and negative values, reflecting the financial performance of individual businesses. In this case, the aggregated estimate can be small relative to the contribution of individual businesses, resulting in a standard error which is large relative to the estimate.

RELATIVE STANDARD ERRORS
	Total income	Total expenses	Industry value added	Sales and service income	Wages and salaries
Agriculture, forestry and fishing	3.1	3.1	5.1	3.0	2.5
Mining	0.6	0.9	0.6	0.5	1.0
Manufacturing	0.6	0.5	1.2	0.6	0.6
Electricity, gas, water and waste services	0.6	0.5	1.1	0.5	1.2
Construction	1.6	1.7	3.8	1.6	2.0
Wholesale trade	2.6	2.5	3.1	2.6	1.8
Retail trade	1.8	1.9	2.7	1.8	1.5
Accommodation and food services	3.2	3.5	5.2	3.3	4.9
Transport, postal and warehousing	1.9	2.1	2.4	2.1	2.0
Information media and telecommunications	1.2	1.2	1.3	1.1	1.1
Rental, hiring and real estate services	9.1	2.5	2.8	2.1	5.0
Professional, scientific and technical services	1.5	2.0	2.0	1.4	1.3
Administrative and support services	4.2	5.9	3.0	2.9	3.2
Public administration and safety (private)	4.0	4.1	3.9	4.1	3.5
Education and training (private)	2.8	2.7	2.5	6.2	2.0
Health care and social assistance (private)	2.9	2.8	3.4	4.4	2.2
Arts and recreation services	1.5	1.9	4.7	1.5	2.6
Other services	2.3	2.5	3.8	2.6	2.3
Total selected industries(a)	0.7	0.7	0.7	0.6	0.6
(a) Excludes Division K Financial and insurance Services. See the Glossary for the full definition.

Non-sampling error

6 Error other than that due to sampling may occur in any type of collection, whether a full census or a sample, and is referred to as non-sampling error. All data presented in this publication are subject to non-sampling error. It can arise from inadequacies in available sources from which the population frame was compiled, imperfections in reporting by providers, errors made in collection such as in recording and coding data and errors made in processing data. It also occurs when information cannot be obtained from all businesses selected. The imprecision due to non-sampling variability cannot be quantified and should not be confused with sampling variability, which is measured by the standard error.

7 Although it is not possible to quantify non-sampling error, every effort is made to reduce it to a minimum. Collection forms are designed to be easy to complete and assist businesses to report accurately. Efficient and effective operating procedures and systems are used to compile the statistics. The ABS compares data from different ABS (and non-ABS) sources relating to the one industry, to ensure consistency and coherence.

8 Differences in accounting policy and practices across businesses and industries can also lead to some inconsistencies in the data used to compile the estimates. Although much of the accounting process is subject to standards, there remains a great deal of flexibility available to individual businesses in the accounting policies and practices that they adopt.

9 The above limitations are not meant to imply that analysis based on these data should be avoided, only that the limitations should be borne in mind when interpreting the data presented in this publication. This publication presents a wide range of data that can be used to analyse business and industry performance. It is important that any analysis be based upon the range of data presented rather than focusing on one variable.


QUALITY INDICATORS

10 In the 2008-09 survey of Australian industry, there was an 89.5% response rate from all businesses that were surveyed and found to be operating during the reference period. Data were imputed for the remaining 10.5% of operating businesses. This imputation contributed 7.9% to the estimate of sales and service income for Total selected industries.


DATA COMPARABILITY

11 This section discusses the comparability of estimates across time.


Historical comparisons

12 To provide comparability with the 2006-07, 2007-08 and 2008-09 estimates, the estimates for 2004-05 and 2005-06 presented in table 1.1 have been adjusted to take account of various changes in collection design, estimation methodology, scope and the introduction of the 2006 edition of ANZSIC (ANZSIC06). In the 2006-07 publication the data for 2004-05 and 2005-06 were updated to take account of any revisions to the data since they were originally published in the 2005-06 issue. The data so revised were then mapped to ANZSIC06 and further adjusted to incorporate the scope and methodological changes discussed in the notes for the 2006-07 publication. This process is known as 'bridging' and was used to create the key data items presented in table 1.1 for 2004-05 and 2005-06. This table is the only occasion, in the 2008-09 issue, where a longer time series is presented.

13 This release includes a change to the information presented in the Business Size table. Where a time series was previously published in this table, only the current 2008-09 reference year estimates have been included. A time series has not been presented due to a change in the survey's size stratification variable leading to movements between size categories. These movements result in the 2008-09 business size estimates not being comparable to the previous years' estimates. A two-year time series will however be available in the next release.