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# Regular Addition of New Sample Enterprises to TANKAN

February 23, 2006
Bank of Japan
Research and Statistics Department

From the March 2006 TANKAN (Short-term Economic Survey of Enterprises in Japan), 66 enterprises will be added as samples of the survey.

We examine the statistical accuracy of TANKAN once a year. This is to prevent a decline in the statistical accuracy due to a decrease in the number of sample enterprises caused by bankruptcies, mergers, and other factors. We add new sample enterprises to TANKAN when the examination reveals that statistical accuracy has in fact declined (see "Sample Design and Sample Maintenance of TANKAN," June 7, 2004, Research and Statistics Department, Bank of Japan, for details).

We have decided to add 66 enterprises1 to TANKAN (see appendix) after recent examination of the statistical accuracy of the last TANKAN (December 2005). As a result, the total number of the sample enterprises for the March 2006 TANKAN will be 10,292 (including 205 financial institutions). The details are as follows:

1. Some sample enterprises have been included in the newly added enterprises in accordance with the "Incorporating spin-off companies in the course of time" rule. For more detail, refer to: "Sample Design and Sample Maintenance of TANKAN," June 7, 2004, Research and Statistics Department, Bank of Japan.

## (1) Sample Distribution

Population enterprises are classified into 377 strata by industry, scale based on capital size, and number of regular employees to calculate the population estimate.

For each stratum subject to the sample design2, we examined similarities between the distribution of sample enterprises and that of population enterprises.

The results reveal two things: 1) the distribution of samples in one stratum has deviated from that of the population,3 and 2) a few strata indicate a high likelihood of deviation from the distribution of the population, in case of further decline in the number of sample enterprises.

To maintain statistical accuracy, sample enterprises have been added to these strata.

1. 2Strata with less than five enterprises (forty strata) have been excluded.
2. 3The "test of the goodness of fit" using chi-square distribution is used in the regular examination. This method tests the null hypothesis, H0: "The distribution of the sample and that of the population have the same shape." When the hypothesis is statistically rejected, it is judged that a deviation exists between the distribution of the sample enterprises and that of the population enterprises.

## (2) Error Ratios of the Population Estimates

For all of the main six divisions by industry and scale (Manufacturing/Nonmanufacturing and Large/Medium-sized/Small, see below), the error ratios of the population estimates4 (measured by sales data), after the addition of 66 samples, remained within the target range (Manufacturing: 3 percent, Nonmanufacturing: 5 percent).

1. 4Population estimates based on sample surveys, like those in TANKAN, inevitably entail certain estimation errors. Users are advised to take this into consideration when using the data.