Since countries report both their imports and their exports to the United Nations, the raw data we use may have duplicates flows: trade from country i to country j may be reported by i as an export to j and by j as an import from i. The reported values should match, but in practice are virtually never identical, for two reasons:
1) Import values are reported CIF (cost, insurance and freight) while exports are reported FOB (free on board).
2) Mistakes are made, because of uncertainty on the final destination of exports, discrepancies in the classification of a given product, etc...
BACI provides a unique, reconciled trade flow by implementing an harmonization procedure whose two main ingredients are:
1) CIF costs are estimated and removed from import values to compute FOB import values.
2) The reliability of each country as a reporter of trade data is assessed. If a reporter tends to provide data that are very different from the ones of its partners, it will be considered as unreliable and will be assigned a lower weight in the determination of the reconciled trade flow value.
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