Several Approaches to Estimating Low-Valued Exports from the U.S.
Patrick J. Cantwell
KEY WORDS: exemption level, international trade, reconciliation study, Customs, courier.
Each month the U. S. Census Bureau receives from the Customs and Border Protection Service
documents describing all U.S. exports over $2,500. Most exporters now file the required
documents via the Automated Export System. Because of filing options, for the majority of
exporters, we have no information on "low-valued" exports (LVEs), those valued at or below the
exemption level of $2,500; for the remainder, we have records for all LVEs. As exporters are
not required to report their LVEs, the Census Bureau estimates the low-valued component for
any country by multiplying its total of exports valued over $2,500 by a pre-determined factor.
This factor, specific to the country of export, was determined in the late 1980's based on data
collected up to that point in time. However, while export patterns--commodities, modes of
transport, quantities, and values--have changed, the factors remain the same. Some experts
believe that the current system may underestimate LVEs.
In this paper, we look back at research into several approaches to estimate LVEs. The goal was
to develop robust procedures that accurately represent what is currently being exported, and can
adapt over time with minimal review to reflect changes in export patterns. After reviewing
background on the collection of export data and the estimation of LVEs, we briefly describe
several methods for estimating LVEs. In all of these strategies, we start by combining exports
into groups determined by common features, such as the export's commodity or its mode of
transport. We review methods based on (1) data from the small portion of exporters who report
their LVEs, (2) export data to Canada and from courier shippers, (3) models that try to predict
how an exporter will file, and (4) models that hypothesize that some shippers split their exports
into smaller pieces to avoid filing export documents. The research reveals promising aspects of
the approaches as well as serious flaws.