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INFORMATION PAPER: IMPROVEMENTS TO THE ESTIMATION OF NET OVERSEAS MIGRATION, MAR 2018
The input data for calculating NOM is mainly sourced from administrative data provided by the Department of Home Affairs. Administrative information on persons arriving in, or departing from, Australia is collected from various sources including passport documents, visa information, and passenger cards. The NOM estimates are produced using all overseas arrivals and departures to determine how many people migrate into, and out of, Australia in each quarter. As the vast majority of movements across Australia’s border represent short term trips, only around 1% of all movements across Australia’s border contribute to NOM.
3. PREVIOUS METHODS FOR ESTIMATING NOM
Conceptually, NOM is the difference between the number of people arriving in Australia to live for 12 months or more, and the number of people leaving Australia to reside overseas for 12 months or more. The introduction in 2006 by the ABS of the '12/16 month rule' method for estimating NOM, means the 12 month duration threshold does not have to be continuous and is measured over a 16 month reference period. Records of each traveller’s overseas arrivals and departures are used to measure their cumulative duration in (or out of) Australia over the subsequent 16 months following an initial arrival or departure. Travellers attaining a combined duration in Australia of 12 months or more, and who are not currently counted within the population, are added to the population. Conversely, residents attaining a combined duration out of Australia of 12 months or more, and who are currently counted within the population, are subtracted from the population. The ability to accurately measure the duration of stay in or out of Australia is a key component in determining which arrivals or departures contribute to NOM, known as 'NOM Arrivals' and 'NOM Departures'.
The '12/16 month rule' can only be fully applied up to 16 months after an initial arrival or departure. However, preliminary estimates of NOM are required in order to provide more up-to-date and timely statistics on Australia’s population. To estimate preliminary NOM, the ABS previously used a model that predominantly applied the behaviour of similar travellers from one year earlier to travellers in the quarter of interest. Travellers with similar characteristics were grouped according to specific variables and their likelihood of representing a NOM arrival or NOM departure is predicted based on the actual behaviour of similar travellers from one year earlier. Previously the variables used were age, country of citizenship, initial category of travel, and State/ Territory of usual residence. The method for the estimation of preliminary NOM has now changed and is noted below in Section 6 - Improvements to Preliminary NOM Estimation.
For detailed information on the 2017 changes in OAD data including imputation, secondary sources used, and in particular information on the State/Territory of residence see Data Quality Issues (Appendix) under the Explanatory Notes tab in Overseas Arrivals and Departures, Australia (cat. no. 3401.0).
5. IMPROVEMENTS TO FINAL NOM ESTIMATION
The NOM methodology, based on the '12/16 month rule', remains substantively unaltered. The changes to final NOM estimates in the new system are primarily attributable to changes to input data used for NOM such as updates to the quality of PIDs, the use of alternate sources, and changes to imputation.
Improvement in the quality of PID data is a significant change. While in the vast majority of cases a traveller has all their movements associated with a single personal identifier, inevitably in some cases a traveller is inadvertently assigned more than one PID. Home Affairs now supplies ABS with a monthly file listing instances where these situations have been identified and rectified. This enables the ABS to more accurately construct person-level data when using the movement records from the 16 months following an overseas movement. A more accurate overall traveller count is achieved through reduced duplication. As a consequence, the number of both NOM Arrivals and NOM Departures is slightly lower than under the former NOM system.
As part of the 2017 review of OAD, the imputation methodology for missing values was redesigned. The values from these improved imputations are now carried forward into the data used in NOM processing, with the exception of instances where State/Territory of residence required imputation.
Changes to the source and imputation of State/Territory of usual residence in NOM
Table 1. Priority order of preference for selecting State/Territory or usual Residence
Improved final estimates
6. IMPROVEMENTS TO PRELIMINARY NOM ESTIMATION
The ABS is now able to source an additional month of movements data from Home Affairs for use in preliminary NOM estimation. Using this additional data source allows a total of four months of movement data to be available after the preliminary reference quarter. This means for many individuals that their ERP status can be resolved. This additional month has been utilised by the ABS to make two significant improvements in preliminary NOM methodology:
Reducing the pool of travellers using the propensity model
The majority of travellers in a given reference quarter take a trip of short duration which will not change their ERP status. Most of these short-term travellers can now have this determination made based on the movements data available at the time of preliminary NOM estimation. For example, an Australian resident counted in the ERP at the beginning of a quarter, may commence a holiday during that quarter and then return to Australia two weeks later. Once four months since their return has passed without a further departure, they can be determined to still be in Australia’s population at the end of the reference quarter. This is because, as counted from the date of their original departure, it will no longer be possible for them to be out of Australia for more than 12 months out of 16.
The increase of available post-reference date data to four months has reduced the proportion of travellers requiring preliminary NOM estimation by the propensity model to less than 30%. This has significantly increased the predictive accuracy of the model.
Changing to one year ago propensity model for all travellers
The previous preliminary NOM propensity model only had 15 months of movement data available to determine the NOM behaviour of travellers from one year earlier. As the full 16 months required was not available to finalise the NOM status for all travellers, durations could not be directly calculated for all travellers in the quarter from one year earlier and a combination of 'one year ago' and 'two year ago' propensities was applied to travellers in the reference quarter.
Availability of an additional month of movements data now means that 16 months of data is available. This enables the calculation of duration for all travellers from the corresponding quarter one year earlier. For example, when estimating preliminary NOM for September quarter 2017, the full quarter of final NOM results for September quarter 2016 are now available for the propensity model to use. To estimate preliminary NOM, the new methodology now only uses a 'one year ago' propensity model and, as such, improves the currency of the propensities being used.
Improved preliminary estimates
Figure 1 — NOM, Australia - Estimates from New and Old method compared
Estimates of both the resident population (ERP) and NOM for Australia and each of the States and Territories are published quarterly in Australian Demographic Statistics (cat. no. 3101.0). The improvements outlined for preliminary NOM in this paper will be introduced from the September 2017 issue. Changes made to final NOM and a subsequent technical note will be released in the December 2017 issue on 21 June 2018.
The quarterly variability always experienced in Australia's population growth is predominately driven by trends and seasonality in NOM. To help reduce the impact of revisions to ERP the ABS is now able to release Final NOM one quarter earlier than was previously possible. Previously there was a lag of five quarters between the release of preliminary NOM and the release of final NOM estimates. With the availability and use of an additional month of movements data, the ABS can reduce this lag to only four quarters.
The first quarterly revision cycle for publishing final NOM will be for December 2016 in the December 2017 issue of Australian Demographic Statistics (cat. no. 3101.0) scheduled for release on 21 June 2018. This release will also include the final NOM estimate for September 2016.
Historical NOM data from September quarter 2011 onwards has been produced based on the new methods. The ABS intends to apply the series using this improved method to the 2011-2016 intercensal period as part of the final rebasing of population estimates to be released in Australian Demographic Statistics, December 2017 (cat. no. 3101.0) on 21 June 2018.
The ABS data referred to throughout this paper is sourced from data provided by the Department of Home Affairs and the Department of Human Services and from information provided by travellers. Their continued cooperation and support is highly valued and appreciated; without it, the wide range of statistics available on overseas arrivals and departures, net overseas migration and population published by the ABS would not be available. All data received by the ABS is treated in strict confidence, as required by the Census and Statistics Act 1905.
1 Dutton, P (Minister for Home Affairs & Minister for Immigration and Border Protection) Media release, 25 June 2017, viewed 15 March 2018 <http://minister.homeaffairs.gov.au/peterdutton/Pages/removal-of-the-outgoing-passenger-card-jun17.aspx>
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