It is a good sign that people in Iran are paying increasing attention to the accuracy of government data.
Earlier, they used to dismiss all data, especially inflation, as propaganda. The fact that an announcement about which government agency is authorized to release economic statistics became news last week is a sign that more people take such data seriously, as they should, wrote Djavad Salehi-Isfahani, a professor of Economics at Virginia Tech.
On June 9, a brief but broad ruling from the High Council of Statistics reiterated an old law that assigns the role of the sole reporter of economic statistics to the Statistical Center of Iran.
SCI publishes a vast array of data, including the rate of inflation, which is the most closely watched economic indicator in Iran, and is also produced by SCI’s rival, the Central Bank of Iran. Three days later, the CBI governor, Valiollah Seif, denied that his agency was about to cease collecting or publishing its own data.
More than turf may be involved in the institutional rivalry. The council is chaired by the head of the newly revived Management and Planning Organization, Mohammad Baqer Nobakht, who happens to be SCI director’s boss. CBI governor, on the other hand, is appointed by the minister of economy.
Limiting the source of information to SCI gives Nobakht, who is also the vice president and the government spokesman, more control over what and when it can be announced. This small institutional detail may also explain why the CBI governor was able to shrug off the ruling easily.
Two of the many economic indicators that SCI publishes, on inflation and unemployment, are closely watched by the public and are therefore politically consequential. But, at least for inflation, the two agencies have been telling the same story, so there is no reason—other than saving on costs—to restrict their production to one agency only.
As the graphs show, the Consumer Price Index series for urban areas published by SCI and CBI show remarkable similarity. The graph on the left shows the urban CPI series from both institutions, which follow each other rather closely, although CBI shows faster inflation since 1390. If you are interested in how inflation is reported each month, in some months the two indexes can differ (see graph on right). For example, a year ago, in July 2014, SCI had the rate of inflation going up while CBI had it coming down. But most of the time, there is no discernible difference.
SCI’s inflation series fares better because SCI reports both a rural and an urban index and, more importantly, because it collects and makes public a comprehensive consumer budget survey—since 1963—that provides the weights for CPI. (CBI also collects a consumer survey for its urban CPI, which it keeps to itself, so we don’t know how good it is.)
The similarity of the two inflation indices is not really surprising because there is little one can do to manipulate the rate of inflation in the long run. People make their own independent observations (though on very limited baskets), and CPI in one period depends on its level in the previous period, so a lie is caught sooner or later. Fudging a trended time series is not very smart.
The same is not true of the unemployment rate, which people cannot quite observe on their own and without a national survey, and which is not cumulative or trended and can therefore be misrepresented for a while without the misrepresentation being revealed by later observations. It happens that unemployment is reported solely by the SCI.
The Ministry of Labor sometimes makes its own assessments of unemployment, which do cause a stir, but they are not based on national surveys, so it is good that they should stay out of it.
