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Coronavirus lockdown challenges Argentina’s statistics

From The Essential

By | [email protected] | April 20, 2020 10:00am

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It’s not just the country’s healthcare system or the economy. The coronavirus outbreak is also taking a toll on Argentina’s national statistics system, run by the INDEC statistics bureau. The mandatory lockdown is forcing data collectors to stay at home, making in-person data collection impossible and raising questions over how inflation, unemployment, poverty and other key reports will be produced and whether any alternative results would be accurate.

In a country known for a decade-long statistics scandal when the Kirchnerite administration took over INDEC and cooked up inflation numbers between 2007 and 2015, and at a moment in which Argentina and the world are seeing large economic shocks, there’s strong reasons to keep a close look at how the statistic system functions during the emergency.

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Coronavirus lockdown challenges Argentina’s statistics

By | | April 16, 2020 3:59pm

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It’s not just the country’s healthcare system or the economy. The coronavirus outbreak is also taking a toll on Argentina’s national statistics system, run by the INDEC statistics bureau. The mandatory lockdown is forcing data collectors to stay at home, making in-person data collection impossible and raising questions over how inflation, unemployment, poverty and other key reports will be produced and whether any alternative results would be accurate.

In a country known for a decade-long statistics scandal when the Kirchnerite administration took over INDEC and cooked up inflation numbers between 2007 and 2015, and at a moment in which Argentina and the world are seeing large economic shocks, there’s strong reasons to keep a close look at how the statistic system functions during the emergency.

Overall, while inflation measurements might lose some precision during the pandemic, the country has vast experience with alternative price measurements that will give a good enough approximation. Other reports, however, like those of the job market, will prove difficult to build, meaning that peaks in unemployment during the pandemic might be hard to report accurately, one of many similar problems that are taking place in statistics bureaus across the globe.

Alternative methods

INDEC suspended all in-person data collection activities by their staff members until further notice when President Alberto Fernández announced the nationwide lockdown in mid-March. Nevertheless, the calendar of publications so far remains without changes, as the statistics bureau hopes to come up with alternative ways to collect their data.

This means using phone, emails and online surveys, methods the INDEC is generally not fond of and with which it has little experience, all of which could affect the quality of the information, experts agree. To minimize disruption, the statistics bureau is working with other agencies across the globe, including the World Bank and the IMF, to look for methodological guidance.

“We never imagined to see all statistic bureaus across the globe simultaneously facing the same crisis,” Graciela Bevacqua, former INDEC director ousted during the years of Kirchnerite intervention (and now working again at the bureau in a different capacity), told The Essential. “Argentina faces a particular situation, as data collection has a high component of in-person work. The calendar could end up being altered,” Bevacqua said.

Patchwork with inflation

March’s inflation rate, unveiled yesterday by INDEC at 3.3 percent, was the first report affected by the coronavirus outbreak. Nevertheless, a large part of the data collection could be done in-person prior to the lockdown, and April will be the first month in which figures will fully depend on alternative methods.

Unlike economic production indicators that are obtained online from companies, the inflation rate is measured by INDEC staffers at supermarkets and stores, checking all prices manually. This is now being replaced by going to the website of the same stores, trying to maintain the original sample of the survey.

“INDEC is highly dependent on in-person surveys, while consultancies like ours work mainly with online data. This means that their statistics are now likely going to be more problematic and less reliable,” Fausto Spotorno, chief economist of the OJF consulting firm that build multiple parallel reports during the statistics blackout of 2007-2015, told The Essential.

Matching the old in-person price series with the new online series will be one of many challenges. Many stores are also closed due to the lockdown, which means several elements in INDEC’s consumer price index will not be there for measurement, ranging from clothing to in-person services.

The good news is that once the lockdown finishes the inflation reports that were affected can be corrected with more complete information, allowing for adjustments upwards or downwards. This means that the information reported over the coming months should be taken with a pinch of salt, experts agree.

“INDEC had to adapt, which is understandable. But this doesn’t mean it will be able to measure with its usual quality and precision. The adaptation won’t be easy or innocuous,” Martín Kalos, chief economist at Elypisis, said.

Poverty and unemployment

Other INDEC reports bring even bigger challenges, such as the Permanent Household Survey (EPH in Spanish), used to measure the sociodemographic and socioeconomic features of the population. Many key indicators are obtained from the EPH, including unemployment, income, poverty and destitution.

The EPH involves choosing a representative sample and then visiting a group of chosen homes across the country. Unable to do such visits, INDEC employees are now replacing them with phone surveys. But this could be tricky, as telephone landlines which are often used for surveys are growing increasingly rare in the country, especially in poorer areas.

Ensuring that the sample remains representative and that making sure that the information conveyed to pollsters is accurate will be harder in these circumstances.

“There’s an enormous difference between working with phone and in-person surveys. When the pollster visits a home, he is capable of telling if the person is replying with the truth. That can’t be done over the phone. INDEC will have to take a leap of faith on the replies it gets,” Kalos said.

Although the data will certainly lose reliability, there is broad agreement that work at the bureau remains independent from the government at this present time, with Marco Lavagna, the son of third-placed former presidential candidate Roberto, in charge of the institution since December.

Upcoming challenges

INDEC said it is currently reviewing different alternatives to ensure the quality of the statistics amid the current context. Any option that is eventually implemented will be previously tested and validated by the technical experts, sources at the statistics bureau argued.

“Since this is affecting all statistic agencies across the globe, we are in constant communication with international agencies and organisms to identify the best practices and adopt recommendations in this emergency period,” INDEC said yesterday on its inflation report.

While the calendar of publications remains unchanged, there’s not much hope among experts for the national census, originally scheduled for October 28 this year. The date is still officially in place but taking on such effort in the current context would go against all public health indications.

“The census won’t happen in this context; I imagine it will be pushed for 2021. The conditions for the bureau to do such a nationwide action are not there,” Kalos said,” Moving it to next year shouldn’t be problematic as the census was barely on the first stages of implementation.”