Wherein lies the difference in the estimate of the size of the South African small business sector?
This paper investigates the difference of over 4 million business owners found in the estimates produced by the QLFS 2010:2 and the Finscope (2010) South Africa Small Business Survey. The paper discusses a number of possible reasons for the discrepancy and finds that the QLFS 2010:2 understates the number of small business owners, with the converse being true for the Finscope (2010) South Africa Small Business Survey. Even after accounting for differences in the inclusion criteria of the two surveys as well as the use of divergent sampling weights, a large part of the difference in the estimates produced is still unaccounted for. The paper also calls into question the reliability of the estimates produced in Finscope survey as well as the validity of the negative binomial sampling methodology used to conduct the survey. Access to additional data from both Statistics South Africa and Finscope, will further unravel this mystery and provide a better understanding of the sources of the differences in the estimates produced.
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