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Benchmarking comparison in the time dimension
OECD Statistics Working Papers, 2011/09 on time distance PDF Print E-mail
Sunday, 08 January 2012

New understanding and insights from time-series data based on two generic measures: S-time-distance and S-time-step

Professor Pavle Sicherl prepared a methodological paper on time distance approach that was published by OECD Publishing. It covers several additional technical points and application examples of the time distance method beyond earlier applications. The time distance approach presents a means of presentation of complex data sets that have universal appeal; it is intuitively understandable and can be usefully applied to a wide variety of substantive fields at macro and micro levels. It represents a new way of presenting and analysing indicators complementing and not replacing existing methods. 

In summary, time distance is an innovative approach for looking at time-series data. Expressed in time units, the approach is easy to understand and provides a useful complement to existing methods. The time distance approach compares time series in the horizontal dimension, i.e. for a given level of the variable, based on two generic statistical measures: S-time-distance and S-time-step. These measures are based on a time matrix that summarises information over many units and years and that provides a first-level visualization tool. The paper also introduces the concept of the ‘overall degree of disparity’, defined as proximity in the indicator space as well as in time, arguing that this concept has the potential to bring new understanding in economics, management, research and statistics. 

While the OECD ‘Your Better Life Index’ is a tool that allows addressing differences in subjective opinions among fields of concern and indicators, the time distance concept opens the question about the weight that people assign to the two dimensions of disparity discussed in this paper (static measure and time distance) to arrive at a overall evaluation of their position in society and globally. 

The empirical examples included in this paper demonstrate how the method could be applied to three indicators (life expectancy at birth, the share of the elderly population, and projections of population growth) drawn from the OECD Factbook. These examples were drawn from an earlier presentation by the author referring to 14 variables (‘Visualisation of 50 years of OECD countries at a glance’, which is available on wikiprogress.org and on ‘50 years of OECD countries at a glance’). The paper has also applied the methodology for monitoring Millennium Development Goals across many indicators, either for the world regions or at the country level. 
 
50 years of OECD countries at a glance PDF Print E-mail
Monday, 07 February 2011

A visual overview of 50 years in OECD countries with time distance methodology


At the occasion of the 50th Anniversary of the OECD SICENTER presents a visual overview across several decades of the development for all present OECD countries for selected indicators based on the time distance methodology.

Time distance concept arranges the same data from the OECD Factbook 2010 in an additional way so that data are arranged by selected levels of indicators showing in which year these levels of the indicators were achieved by given country. The level-time matrix compresses original data from the usual time series table in the Factbook 2010 in a new easily understandable way while still containing the most important information. The table-graph in yellow colour shows the range of values achieved for a given country over the period from available data. This allows for a quick level comparison of the situation across the whole set of OECD countries and individual countries as well as of how many steps over levels of indicators was achieved a given country.

The selected indicators are: life expectancy at birth, infant mortality, road fatalities, projections of population growth rates and of elderly population until 2050, employment rates, tertiary attainment, gross domestic expenditures on R&D, telecommunication access paths, gross domestic product per capita, international trade in goods and services, current account balance, and general government expenditures as percent of GDP. This additional way of presentation over many countries and many years provides a much better summary and understanding.




The level-time table-graph for share of elderly population covers the period of 100 years (1951-2050). It is difficult to imagine that the usual table of 34 countries across 100 years with 3400 entries would allow such a compressed essence of the long-term information and visualisation for a relevant perception of the situation. 

For the majority of the selected indicators it is obvious at a glance that the differences between OECD countries are large. For instance, for gross domestic expenditures on R&D, GDP per capita and tertiary attainment the indicator values for the best countries are 4 to 5 times higher than for the lowest countries. While best practices are of interest it is obvious that policies have to be differentiated and adjusted to such wide differences in the circumstances. There is a wealth of information and possible comparisons in the tables; the comments provided are just some examples of such interpretations. ‘Seeing with new eyes’, to borrow the phrase from Marcel Proust, creates new knowledge, better understanding and material for telling new development stories.    
 
Annex 1 shows using the example for life expectancy how the level-time matrix can lead further to derivation of two novel statistical measures: S-time-distance and S-time-step.  All three look easily understandable and are bringing even to general public additional understanding of the situation to build their perception about the disparities involved. S-time-step shows how many years were needed in the past to increase one year in life expectancy, thsi indication of dynamics depends only on the developments in the given country. The values of S-time-distance in the table compare the value for a country to the benchmark OECD average, showing the lead (-) or lag (+) in time against the OECD average.
 
S-time-distance perspective on the current crisis in CIRET conference New York PDF Print E-mail
Thursday, 25 November 2010

Providing new insights from Business Tendency Surveys and GDP data


The paper ‘S-time-distance perspective: providing new insights of the current crisis from BTS
and GDP data’ prepared by P. Sicherl, J. Cirjaković, M. Remec was presented in the session
New Methods at the 30th CIRET Conference, New York, October 2010. The time distance
methodology deals here with the description of the current economic crisis with selected
indicators from the Business Tendency Surveys and GDP for EU and selected countries. This
makes it possible to analyse the severity of the crisis in the two dimensions: decrease in
the static index from the peak in 2008 and the S-time-distance lag indicating how many
years earlier the same levels of GDP were already achieved in the past.

The latter indicates that e.g. for EU27 this would amount to 3.3 years for 2009, 3.9 years
for 2010 and to 4.4 years for 2011. Alternatively, this means that the forecast level for 2011
would be lower than that achieved in 2007. On the other hand, S-time-distance measure
clearly shows how debt crisis has weakened the possibility of higher growth rate in the near
future. In 2011 the investment rate for EU27 would still be around 10% below 2008 value and
about at the level attained 14 years ago (about 1997 level). For the USA the investment rate in
2011 is expected to be about 13% below the 2008 value at a level before 1994 resulting in S-
time-distance of about 17 years. For investment rate Triad countries are expected to fall
back to the levels in past century which could not be perceived by looking only at the static
indexes.


Comparing maximum and minimum values of ESI and GDP in the period 2007-2009 shows
different development in the declining and recovery phases. ESI for EU27 started to decline
after June 2007, while GDP started to decline after first quarter of 2008, this means
8 months later than ESI. In the declining phase ESI offered a leading warning of about 8
months, showed a fall of about 21 months from the maximum in June 2007 to the minimum
levels in March 2009, while the fall in quarterly GDP from first quarter of 2008 lasted about
15 months. In the current crisis ESI showed much higher volatility than GDP. As mentioned
before, this may indicate that much greater decline of ESI than of GDP might be a sign
that the economic sentiment goes considerably beyond GDP and include also problems
related to the decrease in the investment rate, employment and other conditions.

The examples show that more attention needs to be paid to levels and time, which means
that S-time-distance can bring about additional information for a more thorough analysis and
understanding of the situation. An obvious extension would be to repeat such analysis for
the ESI components and also on types of indicators like OECD composite leading indicators.
There are lessons that can be learned with the new methodology from comparisons
across indicators and countries and lessons from a more detailed analysis within a given
country.
 
Measurement for success - The role of indicators PDF Print E-mail
Monday, 15 November 2010

ICT solutions for innovative economic and social development


Centre for eGovernance Development (CeGD) and Microsoft delivered in October in Portorož, Slovenia a three-day conference event targeted at government policymakers and decision makers focused on how technology can transform the public sector in citizen services, education, and healthcare.

Professor Pavle Sicherl in his presentation discussed first the role of indicators in knowledge-based governance and its knowledge and political aspects. For efficient and transparent decision making we do not need only data and indicators but also better measures used in the analysis, presentation and semantics of discussing these issues as indispensable elements from which the perceptions and decisions are formed. Experience and databases at the international level were presented with particular focus on the ICT sector. Examples of applications of the novel generic statistical measure S-time-distance as an analytical, presentation and communication tool for benchmarking and monitoring of implementation of targets at various levels were shown. In principle they could be also applied to key performance indicators (KPI) in business. On the global level the analysis showed that the speed of diffusion of ICT sector indicates its much greater potential for catching up and becoming an important instrument to reduce world disparities.
 
S-time-distance shows that EU has lost 4 years of growth of GDP and employment PDF Print E-mail
Wednesday, 30 June 2010

GDP and total employment in EU27 are at the 2006 levels

Growth rates of the respective magnitudes or indicators seems to be the prevailing
measure used by statistical offices, national and international organisations and media for
describing economic development over time. They need to be complemented by other easily
understandable statistical measures to facilitate the stakeholders to better understand the
situation in a broader framework.

Tables 2 and 3 offer two more statistical measures beyond growth rates that can additionally
describe the severity of the crisis related to levels of GDP and total employment for EU27
countries, United States and Japan: static index of fall from the peak level and S-time-
distance, which in this special declining phase indicates for how many years have the current
levels fallen back to levels already achieved earlier. Time distance analysis lead to a
summary statement that EU27 has in the current crisis lost 4 years of growth of GDP
and of total employment.

For 2010 it is expected that all EU countries except Poland will still be below their 2008
levels: from 1% to 22% according to one measure and falling back from 2.4 to 8 years
according to the time distance measure. USA are expected to return to its 2008 GDP level
while for Japan time distance would be 5 years. The time distance lag would be between 2
and 3 years for 5 EU countries, between 3 and 4 years 9 countries, between 4 and 5 years 7
countries and for 4 countries between 5 and 6 years. Mostly positive growth rates of GDP in
2010 were much too low to compensate for the fall in 2009.

Table 3 for total employment shows even a more difficult situation than for GDP even though
the fall of total employment in 2009 was -1.6 percent, i.e. less than for GDP of -4.2 percent.
In percentage terms total employment fell more in the USA, in EU and in Japan the fall
was similar. However, S-time-distance shows again a different picture. The time lag for the
USA is expected to be in 2010 about 6 years, for Japan about 21 years (USA level of total
employment is expected to be at their 2004 level and for Japan at their 1988 level), for the
EU27 about 4 years. The forecast for 2011 shows that for 7 EU countries total employment
would be shifted back to levels attained more than 10 years ago (before 2001). They are
Portugal and six earlier socialist economies (Czech Republic, Hungary, Romania and the
three Baltic members Lithuania, Estonia and Latvia). Even in static terms total employment
fell for 5 countries (which include Ireland) between 9% and 19%.

S-time-distance measure adds a perspective that is easily understandable by everyone.
This additional time distance perspective can be a very useful tool for better
understanding of the situation needed for policy discussions among social partners
in difficult circumstances. Looking only at growth rates of GDP and employment
does not give a clear indication of the severity of the crisis to policy makers and to the
general public. 

The summary statement that EU27 has in the current crisis lost 4 years
of growth of GDP and of total employment needs to be complemented with diverse
situations in the countries. Also, the employment situation is shown to be even more
difficult than that with GDP. In the next paper we shall show that investment rate has
declined even more to affect the medium term possibilities of growth.
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