On the Representativeness of the ifo Business Survey

From the results of the ifo Business Survey, one should be able to draw the most reliable and robust conclusions possible about developments in the German economy. This applies to both the analyses at the aggregate level with the business cycle indicators and to scientific evaluations at the level of the anonymized micro data. To ensure this, the panel of survey participants must meet various requirements in order to provide as accurate a picture as possible of the business landscape in Germany. Though full surveys of all companies would be desirable, they are neither practical nor feasible. Moreover, participation in the ifo surveys is voluntary. Therefore, the ifo Business Survey is based on a sample of companies active in Germany. The sample size must be of a certain size to provide solid results. In this context, it is important to cover all the important economic sectors (professional representation) as well as a sufficiently large share of companies (company representation). Furthermore, so-called selection effects, which would lead to systematic distortions of the results, must be avoided. Therefore, it is important to ensure that both the regional composition of the participants and the distribution of the companies by size and economic sector roughly reflect the composition of all German companies. Generally, the sample has to accurately reflect the essential properties of the population of all German companies.