METHODS OF REGIONALISATION

13.15 Regional accounts are based on the transactions of units that are resident in a regional territory. In general the regionalisation can be done by using bottom-up methods, top-down methods or mixed methods. The methods may be described as follows:

  1. bottom-up methods:

    the bottom-up methods of estimation involve the use of information on units that are resident in the region, and ascending by addition until the regional value of the aggregate is established. The regional values must add up to the corresponding national value;

  2. top-down methods:

    the top-down methods involve the distribution of a national figure among regions, without attempting to single out resident units, by means of a distribution key which reflects as closely as possible the feature to be estimated. The methods are called top-down because the aggregate is allocated to a region and not to a single unit. However, the notion of a resident unit is needed in order to have a correct regional coverage of the key to be used;

  3. mixed methods:

    the bottom-up methods are rarely encountered in their pure form. Therefore mixed methods may also be considered. For example, can occur that a variable or an aggregate of variables can only be regionalised with the help of the bottom-up method at level NUTS-1. For a further regionalisation at level NUTS-2 or NUTS-3 a top-down method has to be used.

13.16 In principle, the advantage of bottom-up methods is that they directly employ relevant sources at the regional level. An advantage of top-down methods is the guaranteed numerical consistency between national and regional accounts. A disadvantage is that the estimates are not produced with direct data but with a key that is supposedly correlated with the phenomenon to be measured.

13.17 Whenever possible regional values which directly correspond in concept with the national values should be estimated directly by means of the bottom-up methods. The top-down procedures do not lead to a solid, reliable data basis for judging the accuracy of the estimated values, whereas in the bottom-up methods attention is drawn to a possible divergence with the national totals.