January 15, 2014

He’s a forestry export statistic and he’s ok

From the Herald

Log exports to China are driving an increase in the value of New Zealand’s forestry products – which has more than doubled in the past 20 years, according to figures from Statistics New Zealand.

and from Stats NZ, this infographic (click to embiggen, as usual)

forestry-exports-infographic-jpg

 

In both the infographic and the Herald story there’s interesting information about changes in the makeup of NZ forestry exports (more logs, more to China), but in both cases the headline number is a bit misleading.

The change is from $1.9 billion in 1992 dollars to $4.5 billion in 2012 dollars. It’s not explicit that the dollar values are nominal, but they are — if I were a newspaper I’d say “evidence obtained by StatsChat under the Official Information Act”, which is to say I asked the always-helpful @StatisticsNZ twitter account.

My general view is that comparing nominal dollars twenty years apart is Not Even Wrong, but I have to admit it’s not obvious what the ideal adjustment would be. Consumer Price Index? Producer Price Index? Something that involves exchange rates? For that reason, here’s a selection of adjustments

  • CPI: $1.9 billion in 1992 is $2.97 billion now, using the Reserve Bank’s calculator, which all journalists should have bookmarked
  • PPI (outputs, all industries) $1.9b in 1992 is $3 billion now
  • PPI (inputs, all industries) $1.9b in 1992 is $3.1 billion now
  • As a proportion of GDP, forestry has fallen from 2.5% to 2.1%
  • As a proportion of all exports, forestry has fallen from 10.4% to 9.4%

So, there’s a reasonable degree of agreement between measures that forestry has increased in value about 50% and has fallen slightly as a fraction of the economy. “More than doubled” doesn’t seem defensible.

(via @kiwieric)

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Thomas Lumley (@tslumley) is Professor of Biostatistics at the University of Auckland. His research interests include semiparametric models, survey sampling, statistical computing, foundations of statistics, and whatever methodological problems his medical collaborators come up with. He also blogs at Biased and Inefficient See all posts by Thomas Lumley »

Comments

  • avatar
    Richard Penny

    As someone who works at StatsNZ I am always happy when someone actually looks at what the figures mean, rather than assume they mean what they say.

    What is being said here reminds me of the very old joke
    “How are you today?”
    “Compared to what?”

    So what are we comparing? Presumably the headline is trying to say forestry is contributing much more to the economy. If that is the case then GDP is a good starting point, but really you should be looking at tradeable and non-tradeable parts. For non-tradeables (mostly services) you only compete with people in NZ. For example, it is hard to export or import hair-dressing services, or official statistics gathering for that matter. For tradeables you are competing against the world, as forestry would be. As non-tradeables tends to be a larger proportion of GDP over time I would expect forestry to be a smaller part of GDP over time even if they had the same output.

    However getting back to the “compared to what question” it would be useful to see what proportion of the tradeables part of GDP forestry is over time. And that requires more work.

    10 years ago

    • avatar
      Thomas Lumley

      That’s why I looked at exports, but GDP tradeables would certainly be better.

      10 years ago