International trade data quality index

When two countries report different values about trading with each other, the globally endemic phenomenon of trade data discrepancy arises. Substantial discrepancy in claims raises serious concerns about the quality of international trade data, which has profound implications on policymakers and researchers alike. In this paper, we construct an index which measures the level of consistency between each country’s reports on bilateral trade data and the corresponding data reported by the rest of the world. The index takes into account the relative significance of each trade partner and the level of data availability. The paper investigates 1,517,085 bilateral trade flows from 1962 to 2013 and concludes that: (a) malpractice is the main reason why some countries have lower data quality than others, (b) for most countries, trade data quality is in fact improving over time, (c) countries are generally more aware of the origin of their imports than they are aware of the destination of their exports. Our original findings have impacts on any study which utilizes trade data.