Examining the Revisions in Monthly Retail and Wholesale Trade Surveys Under a Rotating Panel Design

Patrick J. Cantwell and Carol V. Caldwell

Abstract:
Under the rotating-panel design used in the U.S. Census Bureau's monthly surveys of retail and wholesale trade, sample firms belong to one of three panels, each reporting only every third month, providing data simultaneously for the month just completed and the month before that. Compositing information obtained from the overlapping panels produces estimates of level with a smaller variance. Due to the timing of the data collection under this design, the Bureau releases a preliminary estimate one month and then revises it one month later. Each of the published estimates is a composite, incorporating data from the overlapping panels. Several factors can affect the size and direction of the revisions. A differential bias in the firms' responses for the two reported months can lead to consistent, positive revisions. But more important, if any of the three panels changes in volume relative to the other two, the result can be a predictable cycle of large revisions. We describe these problems in greater detail, investigating how persistent they are in the Census Bureau's monthly retail and wholesale trade surveys, how they affect the revisions to the estimates, and what can be done about them.

Keywords:
Panel imbalance; response bias; composite estimation; fixed-panel design.