The situation as portrayed in reports by the Central Bureau of Statistics does not always correspond to reality. There are many examples of this. In defense of the Central Bureau of Statistics, it can be said that the differences indicate mainly the limited ability of statisticians to provide decision-makers with a reliable status report in real time, not to lack of professionalism or, heaven forbid, negligence.
One prominent example of this was the false alarm about a recession in early 2016. The initial figures published by the Central Bureau of Statistics in May set off alarm bells: only 0.8% growth in the first quarter, which amounts to negative per capita growth. Initial figures for the second quarter, which showed a continuation of the trend, caused economists to declare that the economy was on the verge of recession. Pressure groups and interested parties, such as the Manufacturers Association of Israel, quickly raised their voices, demanding that the government adopt emergency measures. An interest rate cut would also been a possibility, had it not been for the fact that the rate was already near zero.
Fortunately, the government was in no hurry to act (and was accused of dragging its feet and indecisiveness). Meanwhile, however, the statistical picture improved from one month to the next when the figures were revised (the Central Bureau of Statistics publishes three growth estimates for each quarter, and continues revising them even after that). The revised figure for annual GDP growth in the first quarter of 2016 was no less than 4.5% - among the highest growth figures in recent years. The Central Bureau of Statistics insists that the figures it had at the time of the first estimate were correct, but incomplete. Would it have been better to hold off publishing the estimates until a more complete picture was available? It appears that the practically obvious answer is yes. On the other hand, two errors in the growth figures are not an unusual event for statisticians. A Bank of Israel examination of the deviations in growth estimates around the world shows that at least during the period examined (2005-2010), the Israeli Central Bureau of Statistics was fairly average in comparison with other statistical bureaus. It appears that the lesson from these events is simply that it is best to wait.
Real estate figures have become a real minefield in recent years for the Central Bureau of Statistics' statisticians. A year ago, the Central Bureau of Statistics announced that it would no longer publish figures for the inventory of unsold housing, due to problems with the quality of the data. Before that, a dispute arose about housing prices, leading the minister of finance to forbid the government appraiser and any agency other than the Central Bureau of Statistics to publish figures. He issued instructions to establish a public committee to consider the matter. Last October, the Central Bureau of Statistics admitted that the housing prices index that it publishes suffered from inaccuracies, due to the incomplete data provided by the Israel Tax Authority, as of the date of its publication. Following the committee's probe and other faults that were discovered, some of them by "Globes," the Central Bureau of Statistics announced that it would begin publishing housing price indices for districts. It appears, however, that the worst professional criticism of the Central Bureau of Statistics was by the Bank of Israel, which found that the initial estimate for housing starts published each year by the Central Bureau of Statistics was consistently downwardly biased by 10%, and only the later estimates (sometimes published only two years after the initial figure) were reliable.
There is a methodological dispute between statisticians about employment. Statistician Benny Fefferman, former head of the Ministry of the Economy planning and economy division, asserts that the definition of unemployment used in Israel is outmoded and irrelevant, and does not provide a multi-dimensional picture of unemployment. The existing definition measures the economic loss or the proportion of the unrealized potential for work in the economy. For example, the published number of unemployed does not include people who have despaired of finding work and people seeking full-time jobs who are forced to settle for part-time jobs, due to some limitation. Fefferman believes that applying the optimal definition of unemployment would increase the unemployment rate by 1.8 to 2.4 times, compared with the official estimates.
In poverty statistics, the picture created also suffers from important limitations in the Central Bureau of Statistics' ability to collect data. The problem is focused on an objective difficulty in interviewing residents of Bedouin communities, with an emphasis on unrecognized communities. As a result, incomplete poverty reports were published in 2012-2015 that did not include poverty figures for Bedouins in the Negev.
Published by Globes [online], Israel Business News - www.globes-online.com - on February 1, 2018
© Copyright of Globes Publisher Itonut (1983) Ltd. 2018