# Statistical discrepancy;Canada; Unadjusted (v62295575); from Cube 36100103: Gross domestic product, income-based

Compensation of employees is defined as the total remuneration, in cash or in kind, payable by an enterprise to an employee in return for work done by the latter during the accounting period

## Series Attributes:

- Unit and Multiplier:
- Dollars, Millions
- Frequency:
- Quarterly
- Seasonal Adjustment:
- Not seasonally adjusted

A time series is said to be “not seasonally adjusted” when no adjustments have been made to it to remove predictable seasonal regularities due to normal variations in climate through the year, the schedule of religious, civic and other holidays, established social patterns such as the timing of the school year and other factors of this nature. Time series that have not been seasonally adjusted are also not adjusted for calendar effects, as for example when one month has more working days (Mondays to Fridays) than another. Time series that are not seasonally adjusted are typically more volatile than time series that are seasonally adjusted.

## Methods:

- Statistical Discrepency:
- Statistics Canada produces two independent measures of quarterly gross domestic product. One measure is referred to as gross domestic product by expenditure, which is a measure of all final expenditures less imports within the accounting period. The other measure is referred to as gross domestic product by income, which measures all the incomes generated as a result of the production of goods and services within the accounting period.
While these two measures should be identical, for statistical reasons they diverge each quarter, that is, there is a statistical discrepancy between the two measures. Rather than forcing the measures to be equal, Statistics Canada publishes the statistical discrepancy between these two measures and incorporates it into its official measure of gross domestic product. The sign and direction of the statistical discrepancy provides users with some indication about the quality of the current quarter’s estimate.

The gross domestic product statistical discrepancy is calculated by first deriving the arithmetical mean of the measure of gross domestic product by expenditure approach and gross domestic product by income approach. Second, gross domestic product by income approach is subtracted from the average gross domestic product to derive the statistical discrepancy on the income side. Finally, the gross domestic product by expenditure is subtracted from the average gross domestic product to derive the statistical discrepancy on the expenditure side.

This is best illustrated using an example. Assume that gross domestic product by income approach yields an estimate of 1,000,000,000 and gross domestic product by expenditure approach yields an estimate of 1,000,000,500.

The average gross domestic product (and official measure of gross domestic product) would be:

(1,000,000,000 + 1,000,000,500)/2 = 1,000,000,250

The income side statistical discrepancy would be:1,000,000,250-1,000,000,000 = 250

The expenditure side statistical discrepancy would be:1,000,000,250-1,000,000,500 = -250

The average gross domestic product calculated above is the official method of measuring Canada’s gross domestic product. In many countries they often target one of the measures of gross domestic product as the official measure. For example, in the United States the gross domestic product by expenditure approach is the official measure of gross domestic product. They do not calculate or incorporate the notion of a statistical discrepancy into their official estimate of gross domestic product.

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