Monthly & Annual Wholesale Trade

How Surveys are Collected

Annual Methodology

Confidentiality: Title 13 of the United States Code authorizes the Census Bureau to conduct censuses and surveys. Section 9 of the same Title requires that any information collected from the public under the authority of Title 13 be maintained as confidential. Section 214 of Title 13 and Sections 3559 and 3571 of Title 18 of the United States Code provide for the imposition of penalties of up to five years in prison and up to $250,000 in fines for wrongful disclosure of confidential census information. The Census Bureau's internal Disclosure Review Board sets the confidentiality rules for all data releases. A checklist approach is used to ensure that all potential risks to the confidentiality of the data are considered and addressed.

Disclosure Statement: A disclosure of data occurs when an individual can use published statistical information to identify either an individual or firm that has provided information under a pledge of confidentiality. Disclosure limitation is the process used to protect the confidentiality of the survey data provided by an individual or firm. Using disclosure limitation procedures, the Census Bureau modifies or removes the characteristics that put confidential information at risk for disclosure. Although it may appear that a table shows information about a specific individual or business, the Census Bureau has taken steps to disguise or suppress the original data while making sure the results are still useful. The techniques used by the Census Bureau to protect confidentiality in tabulations vary, depending on the type of data.

Sampling Frame: Companies, parts of companies (defined by Employer Identification Numbers, or EINs), and single-unit establishments (also defined by EINs) that are located in the United States, have paid employees, and are classified in wholesale trade as defined by the 2002 NAICS. This includes wholesalers that take title to the goods they sell such as jobbers, industrial distributors, exporters, importers, and Manufacturers' Sales Branches and Offices (MSBOs), as well as companies that do not take title of the goods they sell such as agents, merchandise or commodity brokers, commission merchants, and electronic business-to-business markets. The EIN is the identifier employer businesses use to report Social Security payroll withholdings to the Federal government. Read more [PDF] about the AWTS sampling frame.

Sample Design and Size: The sample for AWTS consists of three separate samples: (1) a sample of merchant wholesalers, excluding MSBOs, (2) a sample of MSBOs, and (3) a sample of wholesale electronic markets and agents and brokers. AWTS uses a stratified, one-stage design with primary strata defined by industry (e.g., Motor Vehicle and Motor Vehicle Parts, Furniture and Home Furnishings, Grocery, etc.). There are 59 primary strata: 40 from the merchant wholesale sample, 17 from the MSBOs sample, and 2 from the Agents and Brokers sample. The primary strata are substratified into 4, 7, 10, or 13 annual sales size strata. The largest sales size stratum within each industry stratum consists of companies, all of which are selected with certainty (sampling weight equal to one). The other strata are populated by EINs. Sample sizes are computed to meet multiple coefficient of variation constraints on estimated annual sales and end-of-year inventory totals. Constraints are specified at detailed industry levels and at broad levels up to the total wholesale level. Sampling weights range from 1 to 250. Units are selected independently between strata using simple random sampling without replacement within the size substrata. The sample consists of approximately 2,100 certainty companies and 5,900 EINs. Updates to the sample are made on a quarterly basis to account for new businesses, deaths, and other changes to the universe. Read more [PDF] about how the AWTS sample is stratified,selected, and maintained.

Data Collection: Data are collected by mail, fax, Internet, and telephone. Response is mandatory under the authority of an Act of Congress, Title 13, United States Code, Sections 182, 224, and 225. Firms in the AWTS sample are asked to report their data for the year just ending. Two years of data are requested in the year in which a new sample is introduced.

Data Items Requested: Data items requested include annual sales, e-commerce sales, number of establishments covered by the report, value of inventories, inventory by valuation, inventory outside of the United States, total purchases of products, total operating expenses and the ending date of the report period if the data provided are for a period other than the calendar year.

Estimation and Sampling Variance: Total estimates are computed using the Horvitz-Thompson estimator (i.e., as the sum of weighted data (reported or imputed) for all selected sampling units that meet the sample canvass and tabulation criteria). The weight for a given sampling unit is the reciprocal of its probability of selection into the AWTS sample. These estimates are input to a benchmarking procedure, as described below. Variances are estimated using the method of random groups and are used to determine if measured changes are statistically significant. Read more [PDF] about how the AWTS arrives at its estimates and the reliabilty of those estimates.

Response Rates: Economic surveys at the Census Bureau are required to compute two different types of response rates: a unit response rate and weighted item response rates. Read more [PDF] about AWTS response rates (including the 2010 rates).

Benchmarking: Final results of the 2007 Economic Census are used to benchmark the AWTS sales estimates for MSBOs and merchant wholesale excluding MSBOs. Prior to benchmarking to final 2007 Economic Census results, two operations are performed:

• Historical corrections are made to current sample data back to 2004. Corrections are made to replace previously reported data with more accurate data received at a later date or to replace imputed data with reported data obtained from the company.
• Sales estimates from the current sample are linked to the published census-adjusted estimates from the prior sample. For a given detailed industry based on the 2002 North American Industry Classification System (NAICS), the linking is performed by multiplying the sample-based sales estimate by a ratio. The numerator and denominator of the ratio are as follows:
  • The numerator is the 2004 published census-adjusted sales estimate for the industry from the prior sample.
  • The denominator is the 2004 sales estimate for the industry from the current sample.

The resulting sales estimates (call these “modified” sales estimates) for 2002 through 2010 are input to the benchmarking program. Using this program, the modified sales estimates for 2002 through 2010 are revised in a manner that:

• Uses the 2002 and 2007 Economic Census sales totals as constraints.
• ·Minimizes the sum of squared differences between the year-to-year changes of the input and revised estimates for 2003 through 2010.

Refer to the estimates output from the benchmarking operation as "benchmarked."

A method similar to the one for adjusting sales is used to adjust end-of-year inventories and purchases estimates for merchant wholesalers, excluding MSBOs. First, the sales ratio described above is applied to the sample-based estimates for the given detailed industry for 2004 and subsequent years, resulting in adjusted estimates for these years. Then, the published adjusted estimates for 1998 through 2004 from the prior sample are input to the benchmarking program. Using this program, the estimates for 1999 through 2004 are revised in a manner that:

• Uses the published adjusted estimate for 1998 from the prior sample as a constraint, resulting in no revision to the published 1998 estimate.
• Uses the adjusted estimate for 2004 from the current sample as a constraint.
• Minimizes the sum of squared differences between the year-to-year changes of the input and revised estimates for 1999 through 2004.

The resulting modified inventories and purchases estimates for 1997 through 2010 are input to the benchmarking program. Using this program, the modified estimates for 1997 through 2010 are revised in a manner that:

• Uses 1997, 2002, and 2007 constraints for inventories and purchases where the constraints are calculated by multiplying the modified inventories and purchases estimates just calculated by the ratio of the benchmarked-to-modified sales.
• Minimizes the sum of squared differences between the year-to-year changes of the input and revised estimates for 1998 through 2010.

Benchmarked e-commerce estimates are produced in a manner similar to that used for inventories and purchases, except 1998 is used as a constraint because e-commerce was not collected prior to 1998.

For merchant wholesalers excluding MSBOs, benchmarked total expenses estimates for 2006 and subsequent years are calculated by multiplying the Horvitz-Thompson estimates of total expenses by the ratio of the benchmarked-to-modified sales estimates for the corresponding year. To compute benchmarked estimates of Electronic Data Interchange (EDI) sales for 2000 and subsequent years, first the modified EDI estimates are calculated as done for e-commerce. Then, the modified EDI estimates are multiplied by the ratio of the benchmarked-to-modified e-commerce estimates. Benchmarked foreign inventories estimates for 2005 and subsequent years are calculated by multiplying the Horvitz-Thompson estimates of foreign inventories by the ratio of the benchmarked-to-modified total inventories estimates for the corresponding year.

For MSBOs, benchmarked total inventories, expenses, and e-commerce estimates for 2002 and subsequent years are produced using the same methodology as used for the total inventories of merchant wholesalers excluding MSBOs. Benchmarked foreign inventory estimates for 2005 and subsequent years are produced using the same methodology as used for foreign inventories of merchant wholesalers excluding MSBOs.

For Wholesale Electronic Markets and Agents and Brokers (NAICS 425), benchmarked estimates for 2004 and subsequent years are produced by multiplying the Horvitz-Thompson estimates by a ratio. The numerator and denominator of the ratio are as follows:

• The numerator is the sum of the gross selling value and sales on own account from the 2007 Economic Census.
• The denominator is the sum of the Horvitz-Thompson estimates for gross selling value and sales on own account for 2007 from the AWTS sample.

Benchmarked estimates at aggregate industry levels are computed by summing the benchmarked estimates for the appropriate detailed industries comprising the aggregate.