Modelled Territorial Authority GDP methodology
This page outlines the methodology for the Modelled Territorial Authority Gross Domestic Product estimates of annual GDP estimates for 66 territorial authority areas and 18 industry groups.
Our experimental Modelled Territorial Authority Gross Domestic Product (MTAGDP) series is based on the earnings (wages and salaries) of people in employment by industry and territorial authority area.
The data is attained from a custom Annual LEED (Linked Employer-Employee Data) dataset provided by Statistics New Zealand (Stats NZ).
The MTAGDP series uses Statistics New Zealand's (Stats NZ’s) published and custom Regional GDP series for 15 regional council regions as a benchmark to estimate GDP for New Zealand’s 66 territorial authority (TA) areas and the industries in them.
These estimates have been derived by a mathematical method called iterative proportional fitting (also known as bi-proportional scaling or raking) that rakes up the earnings data to align with the official Regional GDP totals.
As LEED earnings data is not available for the final year in the MTAGDP series, a forecasting procedure is employed to generate the TA estimates for that year. These are also raked to align with the official Regional GDP totals for regional council areas. The industry breakdown is not available for this final year, as it is not provided in the official Regional GDP series.
Lastly, the MTAGDP estimates for the final year should be regarded as more likely to be revised than other years, as it uses a less rigorous method and is raked to Regional GDP totals that are published as provisional figures.
See the methodology document below for more details:
2018 methodology revision
We developed the experimental MTAGDP series in 2015. In 2018,we made a significant update to the methodology to improve the accuracy and consistency of the estimates using a more detailed custom Annual LEED data set from Stats NZ. The revision involved the following major changes to the method of producing these estimates:
- replacing the Stats NZ published Quarterly LEED earnings and Business Demography Statistics (BDS) datasets with a single custom Annual LEED dataset from Stats NZ,
- removing the commuter correction procedure, as this was no longer needed,
- changing the reported industry categories.
Consequently, historical MTAGDP estimates for some territorial authorities (TAs) and some industries have been revised significantly in the post-revision releases, mainly due to:
- removing the commuter correction procedure, which changed the distribution of GDP estimates across the territorial authorities,
- removing the Business Demography Statistics data (replacing it with the custom Annual LEED data), which impacted the distribution of GDP estimates across the industry categories.
Most other differences will be due to standard annual revisions in the Regional GDP series.
More details of the MTAGDP 2018 methodology revision can be seen in the latest MTAGDP methodology document:
The previous MTAGDP methodology can be seen in the document below:
Why estimate MTAGDP
Although Regional GDP figures have been available from Stats NZ since 2013, there are a number of research questions and policy needs that require finer-scale information (ie, both in terms of the industry classifications and the spatial granularity).
This project was initiated in order to partially fulfil this need, providing an internally consistent, robust estimate of GDP at the Territorial Authority (TA) level.
How estimates compare to Regional GDP
Estimates of MTAGDP were calculated to align with official published statistics for Stats NZ's Regional GDP.
There are small differences between the population estimates in the MTAGDP and the Regional GDP. MTAGDP uses year-ended June population estimates while Regional GDP estimates year-ended March figures by taking the mean of two year-ended June figures, and benchmarking that to the New Zealand total for the year-ended March. These differences are small and have a negligible effect on GDP per capita trends and comparisons across industries or regions.
Quality control applied to estimates
Since the original proof of concept in late 2014 for MTAGDP estimates, we have made several presentations and held question and answer discussion sessions with the New Zealand Institute of Economic Research (NZIER) and the Stats NZ's National Accounts team. Our Business and Economic Development team has also validated and error-checked results.
Assumptions when using estimates
The base data for generating MTAGDP is the earnings (wages and salaries) of people employed by TA and industry, sourced from custom Annual LEED data provided by Stats NZ. This data is used on the assumption that the distribution of earnings is well correlated to the distribution of GDP by geographical area and industry.
How often MTAGDP is updated
We update MTAGDP annually, about 4 weeks after Statistics New Zealand’s Regional GDP series is released at the end of March.
MTAGDP includes estimates for 16 regional council areas and 66 territorial authority areas for every year of the time series, from year end March 2000 to the most recent year published. The breakdown by the 18 industry categories (plus a further 4 sub-industry categories) are available for every year of the time series bar the latest year and align with the industries used in Stats NZ’s Regional GDP series.