Appendix 1. Data Appendix
A1.1 BOS Variables
The data we use here has been edited by SNZ to remove any coding errors, with the exception of Table 22 and Table 24. A common edit is for financial data where there are components and totals. If there is no total amount (e.g. "operating revenue", Q10), but all the components (e.g. "Sales of goods and services", Q8; and "other operating revenue", Q9) contain data, then the total is calculated from the components. If the total does not equal the sum of the components, then an alert is displayed and this may be manually edited (e.g. if the figures in one number are clearly transposed, or there is a scanning error).
We do not use SNZ-imputed values in cases of item non-response where it is impossible to obtain them by simple edit rules (e.g. more than one expenditure categories are missing).
Objective Data
Expenditure
Salaries and Wages
The figure for salaries and wages comes from Question 13: "For the last financial year, what was the total amount this business paid for salaries/wages?" Respondents are asked to include: "employee ACC contributions", "severance and redundancy payments", "sick and holiday pay", "directors" fees', "bonus and other performance payments (e.g. commissions)", and "other employment related expenses". They are asked to exclude "capitalised salaries/wages". Data item A1301.
Interest
The figure for interest payments comes from Question 14: "For the last financial year, what was the total amount this business paid in interest?" Respondents are provided with two examples: "interest paid to banks, affiliated companies, and interest finance leases" and "use-of-money interest to the Inland Revenue Department (IRD)". Data item A1401.
Depreciation
The figure for depreciation expenditure comes from Question 15: "For the last financial year, what did this business record in the book of accounts for depreciation and amortisation?" Respondents are asked to include: "depreciation of fixed assets", "depreciation on finance lease assets operated by this business" and "amortisation of intangible assets". Data item A1501.
Purchases
The figure for purchases comes from Question 16: "For the last financial year, what was the total amount this business paid for all other operating expenditure?" Firms are given the following examples: "purchases of goods and services from suppliers" and "renting and leasing costs". They are asked to not include: salaries and wages; purchase of fixed assets; interest and finance costs; depreciation or amortisation; losses on sales of fixed assets. Data item A1601.
Total operating expenditure
Total operating expenditure is the sum of salaries and wages (A1301), interest (A1401), depreciation and amortisation (A1501) and "all other operating expenditure" (A1601).
Revenue
Sales
The figure for firm sales comes from question 8: "For the last financial year, what was the total this business received from the sale of goods and services?" Data item A0801.
Other operating revenue
Other operating revenue comes from Question 9 . Respondents are asked to include: "renting and leasing income", "government grants received for operating purposes" and "interest and dividend revenue". It excludes "proceeds from the sale of fixed assets" and the "gains on the sale of fixed assets". Data item A0901.
Total operating revenue
Total operating revenue is the sum of sales of goods and services (A0801) and other operating revenue (A0901).
Other Variables
Employment
Employment is the sum of full-time working proprietors and employees plus one-half of the sum of part-time working proprietors and employees, where full-time is defined as working 30 hours or more per week. These data come from the answers to question 30 "At the end of the last financial year, how many staff worked for this business?" respondents are asked to include 'those temporarily absent from work (e.g. sick, on leave, strike or temporary lay off).
In the BOS 2005, responses are recorded as data items A3001 (full-time working proprietors), A3002 (part-time working proprietors), A3011 (full-time employees) and A3012 (part-time employees). In 2006 the two employee responses are recorded as data items A3003 and A3004, respectively.
In the BOS 2006, the layout of the question was changed and an additional data item was included "Total of full-time and part-time working proprietors and employees, as above", data item A3005.
Value added
Value added is calculated as sales of goods and services (A0801) minus purchases (other operating expenditure) (A1601).
Operating Profit
Profit is defined as operating revenue less operating expenses.
Subjective Data
Relative Productivity and Profitability
Question 38. "Mark one oval for each item listed. How do you think this business compares to its major competitors on each of the following?"
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lower than competitors |
on a par with competitors |
higher than competitors |
don't know |
| profitability |
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| productivity |
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Data items A3801 and A3802.
Performance change: sales, profitability, productivity & market share
Question 39. "Mark one oval for each item listed. Over the last financial year, did the following items decrease, stay the same or increase for this business?"
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decrease |
stay the same |
increase |
don't know |
| total sales of goods and services |
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| productivity |
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| profitability |
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| market share |
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Data items A3901, A3902, A3903 and A3904.
A1.2 Business Activity Indicator (BAI) Data
The Business Activity Indicator uses GST data from the Inland Revenue Department matched to the SNZ Business Frame. The BAI data come from the Goods and Services Tax return form, GST 101. In order to create the BAI dataset, SNZ temporarily apportion the data down to a monthly frequency, apportion returns across GST group members and apply limited imputation in cases where a single return appears to be missing. As noted in Fabling et al. (2008), the GST-based sales and purchases data is potentially contaminated by capital income and expenditure. In particular this includes sales of second-hand assets and businesses, purchases of land, buildings, plant, machinery and businesses. For more on this subject see section 5.4 of Fabling et al. (2008).
Sales
The sales data in the BAI relate to "Total sales and income for the period (including GST and any zero-rated supplies)." This is adjusted to an ex-GST basis using data on zero-rated sales as follows
where SE = Sales excluding GST, SI = Sales including GST, Z = zero rated sales.
In a small number of cases zero-rated GST data is missing. This scenario arises when GST total sales (and purchases) have been imputed. For these observations, we assume Z equals zero in the GST adjustment process.
Purchases
The purchases data in the BAI also come from the Goods and Services Tax return form, GST 101. They relate to "Total purchases and expenses (including GST) for which tax invoicing requirements have been met" and include an estimate for imported goods and the use of private goods and services in taxable activity adjusted by 8/9.
A1.3 IR10 Data
The IR10 data used in this paper come from page 1 of the IRD form Accounts information IR10 form. More information on what should appear in the IR10 form can be found in the IRD guide IR10G. Note that a table of descriptive statistics for all items on page 1 of the IR10 is provided in Table 21 of Appendix 2.
Sales
The sales data recorded in the IR10 form relate to Box 2 "Gross income from sales and/or services" and are GST exclusive.
Other income/revenue
The "other income/revenue" variable used in Table 5 is the sum of Box 7 "interest received", Box 8 "dividends", Box 9 "rental and lease payments" and Box 10 "other income".
Profit
The profits data recorded in the IR10 form relate to Box 29 "Total current year taxable profit". Note that this includes changes in stocks.
Other expenditures
"Other expenditures" in Table 5 is the sum of Box 4 "Purchases" (less the change in stocks from Box 3 "Opening stock" and Box 5 "Closing stock" (both of which include work in progress)), plus Boxes 13-16, 18, 19, 21-27. For a list of the box numbers, the names of the variables and descriptive statistics, see Table 21 of Appendix 2.
A1.4 LEED/PAYE Data
Our data on employment come from the Linked Employer-Employee Database. It has two components, counts of employees and working proprietors.
Employees
Employment is measured using an average of twelve monthly PAYE employee counts in the year. These monthly employee counts are taken as at 15th of the month. This figure excludes working proprietors and is known as Rolling Mean Employment (RME).
Working proprietors
The working proprietor count is the number of self-employed persons who were paid taxable income during the tax year (at any time). In LEED, a working proprietor is assumed to be a person who (i) operates his or her own economic enterprise or engages independently in a profession or trade, and (ii) receives income from self-employment from which tax is deducted.
From tax data, there are five ways that people can earn self-employment income from a firm:
- As a sole trader working for themselves (using the IR3 individual income tax form [this is used for individuals who earn income that is not taxed at source]);
- Paid withholding payments either by a firm they own, or as an independent contractor (identified through the IR348 employer monthly schedule);
- Paid a PAYE tax-deducted salary by a firm they own (IR348);
- Paid a partnership income by a partnership they own (IR20 annual partnership tax form [this reports the distribution of income earned by partnerships to their partners] or the IR7 partnership income tax return);
- Paid a shareholder salary by a company they own (IR4S annual company tax return [this reports the distribution of income from companies to shareholders for work performed (known as shareholder-salaries)]).
Note that it is impossible to determine whether the self-employment income involves labour input. For example, shareholder salaries can be paid to owner-shareholders who were not actively involved in running the business. Thus there is no way of telling what labour input was supplied, although the income figures do provide some relevant information (a very small payment is unlikely to reflect a full-year, full-time labour input).
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