Transcript Conceptual Framework and data collection for value added

Viet Vu
Consultant
UN STATISTICS DIVISION
1

Conceptual framework

Data collection and compilation of value
added
• Statistical units for SNA household production: households as
unincorporated enterprises.
• Statistical units for Household Enterprises Producing At Least
Some Goods and Services for Markets (HUEMs).
• Further clarification: is “some goods and services for market”
sufficient?
• Informal sector as a sub-sector of HUEMs
• Specification of activities engaged in by HUEMs
• Framework for the collection of economic data.
• 1-2 Survey technique.
• Compilation of value added.

Data extrapolation by use of labour force
survey

Household units as non-producing consumers:
• earn their income by providing their labor services to other
producers, or by receiving transfers from other institutional
sectors such as the government, NPISHs, financial corporations
and other households.
• do not even own dwellings in order to produce services of
owner-occupied dwellings.

Household units as unincorporated enterprises:
• are households which produce goods and services for own
consumption and for the market.
• can be farmers, small retail traders and manufactures, money
lenders, owners of owner-occupied dwellings, households with
paid domestic staffs.
Area
subject
to 1-2
survey
SNA household sector
HUEM units
Agriculture
(commercial
agriculture)
SNA corporations
sector
Non-HUEM
units:
Household
Incorporated
•Producing only
quasiNon-Agriculture
for own final uses
enterprises
corps.
•Subsistence
farmers
SNA general
government
sector and
NPISH sector
Nonmarket units
(general
government,
NPISH)
Informal Formal Informal Formal
statistical units: household enterprises that do not incorporate
This is the part
of the system
that the ILO is
interested in



HUEMs:
are household unincorporated enterprises as defined
by the SNA, but:
 (1) with “primary objective of generating employment and
incomes to the persons concerned” as defined by the ILO in
the resolution of the 15th ICLS (SNA2008, 25.37); and
 (2) “with at least some production for sale or barter
(SNA2008, 25.46)”.
HUEMs as defined above must have entrepreneurial spirit in the sense
that they pursue production for the market on a regular basis;
therefore HUEMs should exclude the unincorporated household units
that have some incidental sales, and subsistence farmers who must
sell some of their outputs on the market to pay for nonfood survival
needs.
Non-HUEMs:
Household unincorporated enterprises
producing only for own final consumption.



HUEMs are defined at a level higher than the informal sector
so as to help collect data for national accounting more
systematically and exhaustively and at the same time to
create a broader grouping in the household sector that are
internationally comparable purposes.
HUEMs can then be sub-divided by countries according to
their own country specific criteria on status of registration,
size of employment, types of activities (non-agricultural only
for example), terms of employment (entitled to benefits
beyond wages and salaries) as guided by the ILO:
 Formal sector
 Informal sector
Another reason for HUEMs to be singled out for survey is as
the SNA wrote:
 “…there is broad agreement that no single criterion on its
own is sufficient to determine what is meant by informal;
several criteria must be considered.” (SNA2008, 25.18)
Informal own-account
enterprise
Other own-account
enterprises
Own-account
HUEMs
Informal enterprises of
employers
Other enterprises of
employers
HUEMs of
employers
Informal
Sector
Additional criteria: size, nonregistration
Conditions:
• HUEM must sell (or barter) at least some of its produce on the
market
• However, many farmers are commercial farmers who produce
mainly for the market like growing and processing tea, coffee,
rubber plants, coconut trees, bananas, pineapples or engaging in
husbandry etc.
• They always have to sell some of their products to market to earn
money for other survival needs
Questions:
• Should farmers be included as HUEMs?
• Should all farmers be treated as HUEMs?
Proposal:
• All subsistence farmers should be excluded.
• Only units that aims at producing for the market can be HUEMs.
Household with only incidental sales are eliminated.

HUEM

Agricultural HUEM: produces a significant amount of
is an unincorporated enterprise that regards itself as
engaging in enterprising and sell (or barter) at least some of
their output on the market, whether they are owned by one or
more than one family member, and whether they are individually
owned by a household or in partnership with other households.
agricultural products for the market. The word "significant" can
be understood in the sense that the agricultural HUEM is not just
selling what it cannot fully consume, or selling just for the sake
of having income to pay for his own survival needs, e.g. clothes,
health and educational needs, etc.

Non-Agricultural HUEM: output sold should not be
incidental but significant enough for the household to regard
itself as engaging in enterprising.
ISIC Rev. 4
A. Agriculture, forestry and
fishing
A.1. Major products
A.2. Supplementary products
B. Mining and quarrying
C. Manufacturing
D&E. Utility
F. Construction
G-T. Services
Corporations
Households
NPISH
Government

Scope of Activities:
• Activities of HUEMs scan fully all the activities defined by ISIC4,
except those that can only be provided by the government or
international organizations.
• A non-agricultural HUEM can engage in both agricultural and
non-agricultural activities.

Imputation:
Any type of HUEM can produce the following
services that cannot be measured directly but must be indirectly
measured and imputed:
• Owner-occupied dwellings services
• Domestic services with paid staff
• Money lending
• Outputs produced to be used for intermediate consumption (new
2008 SNA), gross capital formation and final consumption.

Output of goods and services for sale:
• Normal goods and services
• Money lending



Output of goods to be used as intermediate
consumption (SNA2008).
Output to be bused as gross capital formation (e.g.
dwellings, production utensils).
Output to be used as final consumption:
• Owner-occupied dwellings services
• Domestic services with paid staff

Comparability:

Strategy of measurement:
To compare the output and value added
produced by HUEMs or by the informal sector with respect to the
total economy, the full scope of activities they engage in, in
principle, must be measured, including imputations.
• Direct measurement by survey: can be applied for
construction, manufacturing, services except those that need
imputation. This is particularly essential for supplemental
agriculture (backyard).
• Indirect Measurement: can be applied to:
• Plants and animals that need long time to maturity: use proxies
to allocate national output given acreage and animal heads.
• Owner-occupied dwellings, money lending, domestic services
with paid staff.
ISIC Rev. 4
Corporations, Households
NPISH,
government
A. Agriculture, forestry and fishing
A.1. Major products
A.2. Supplementary products
Direct
measurement
through
HUEMs.
B. Mining and quarrying
C. Manufacturing
D&E. Utility
F. Construction
G-S. Services
K. Services of money lenders
L. Services of owner-occupied housing
T. Domestic services produced with
paid staff
•Allocation of
national
output for
“long time to
mature”
plants and
animals
•Others:
direct survey.
Households
as
statistical
units
By
imputations
with proxies
obtained by
surveys
Universe of Enterprises
List-frame segment
Large units
Public
sector
Small units
Area-based frame
segment
With fixed
premises
Without
fixed
premises
Private
sector
Not in business
register
In business
registers contain
only corporations
Contains HUEM units
1.1 In your main or secondary job during the {last month}, you were:
1- Employer
2- Own account worker
3- Employee
4- Unpaid family worker
5- I did not operate any business/have a job last month
Indicate the
status of
enterprising
6- Other (specify) _____________________________
1.2 What is the legal status of your business?
1- Individual business or business in partnership with members of household
2- Ordinary partnership with members of other households
2a- Number of partners living in the same enumeration area:
2b- Number of partners living outside the enumeration area:
3- Corporation
4- Limited liability company/partnership
5- Other (specify) __________________________________






Mongolia
Philippines
Sri Lanka
Palestine
Saint Lucia
Vietnam tested in Hanoi and Hochiminh city
and working independently of ESCAP’s
project.
Total active individuals in sample: 9,993
 Working in private sector: 7,502
 Corporations: 1,825 (agricultural units not candidate of
HUEMS
•HUEMs do  IDI, not registered, don’t know: 5,677
 Enterprise sells/barter regularly
HUEMs: 1,559
not include
2,480
units that have  Enterprise sells/barter from time to time:
only incidental,  No sales/barter
1,570
irregular sales  don’t know
53

HUEMs do not include units that have only incidental,
irregular sales
Definition of informal ILO: At least some outputs sold
or barter.
Definition used by Mongolia is not the same as ILO’s.
ISIC Industry
Agriculture, forestry and fishing
Mining and quarrying
Manufacturing
Electricity, gas, steam and air conditioning
Water supply; sewerage, waste management
Construction
Wholesale and retail trade; repair of m
Transportation and storage
Accommodation and food service activity
Information and communication
Financial and insurance activities
Real estate activities
Professional, scientific and technical
Administrative and support service activity
Public administration and defence; comp
Education
Human health and social work activities
Arts, entertainment and recreation
Other service activities
Activities of households as employers.
Sample might
be too small
to provide
reliable data
on input
ratios
Freq.
58
67
177
5
9
77
620
306
57
5
3
2
5
3
7
20
10
15
95
19
Percent
3.72
4.29
11.35
0.32
0.58
4.94
39.74
19.62
3.65
0.32
0.19
0.13
0.32
0.19
0.45
1.28
0.64
0.96
6.09
1.22
Destination
Total
Export
value
I.
N°
1...
3*
4*
5*
II.
III.
N°
1...
3
4
5
Products sold after transformation
Product name
….
Imputed own production goods produced
for own use as intermediate consumption
Imputed own production of goods
produced for own use as capital formation
Imputed own production of goods
produced for own use as final
consumption
Total trade margins = Products sold
without transformation – cost of
products purchased for resale
Services offered (taken from 4.4, GQ)
Product name
…..
Imputed owner-occupied housing services
Imputed domestic services with paid staff
Imputed services on money lending
Sales to
others
Own
Own final
intermediate consumpti
consumption
on
Must be directly
surveyed
Proxies must be
directly surveyed
Own gross
capital
formation
Total value
Gross output
Total
Less ICT
Total
= GVA
Total
Less
15
Less
Less
01
02
Total value of output of goods and
services produced (G+TM+S)
Total intermediate consumption
(IC1+IC2)
Gross value added (Gross output less
ICT)
Other taxes on production (item 15 from
5.3, GQ)
Wages and salaries (from 3.2, GQ)
Social insurance (from 3.3.1, GQ)
Less
03
Bonuses & allowances (from 3.3.2, GQ)
Less
Equal
Employment
Consumption of fixed capital (for owneroccupied dwellings and premises and
other capital assets)
Net mixed income
Total working hours (taken from 3.2,
GQ)
N°
1
...
IC1
N°
07
08
09
13
*
16
**
17
***
19
Expenditures on raw material and
Total value
stocks (taken from 5.1, GQ)
Name of product
Sum of expenditure on raw
materials (1+2+3+4+...)
Other business expenses (taken
Total value
from 5.3, GQ)
Water
Electricity
Rental payments (machinery,
structures)
Repair & maintenance of facilities &
equipment
ICT
Own
production
Origin
Import
Other enterprises
and households
Own
production
Must be
imputed
as outputs
Imputed insurance services
charged on the establishment
(service charges only)*
Licenses, other fees
Imputed service charges on interest
payment (only FISIM)**
Total value
IC2
Import
Origin
Other enterprises
and households
Sum of expenditure on other
business expenses (=(6+7+...18)
Total intermediate consumption
(IC1+IC2)
Import
Origin
Other enterprises
and households
Own
production

Extrapolation technique: Value added per working hour of
the base year x hours of employment hours of the current period = value
added of the current period in constant price. Extrapolation by activity.

Labor force survey (LFS):

Establishment survey (ES): This survey of producing units
This is a household survey. It
examines if an individual is in the labour force, and then whether he is
employed or unemployed during the reference period.
to count jobs employed by the establishment. Survey of HUEMs is an ES.

Differences:
◦ LFS counts individuals, each individual being counted only once. However,
ES counts jobs held in each production unit therefore an individual may be
counted more than once if that person holds two or more jobs.
◦ Employment status data in LFS include people on the basis of place of
residence regardless of where they work, whereas establishment data
report people at their place of work.

Preference:
ES survey to link actual employment to actual valued
added at actual place of work.

For total economy:

For local economy:

For avoidance of distortion:
Distortion will not happen at the
total economy level, if employment by working hours is used.
Distortion may happen if a region
is small so that workers in one region may work in another
region.
• LFS requests information on both working hours at the
place of residence and at the place of work for each person
interviewed.
• hypothesis that working hours in HUEMs and LFS are close
enough such that the data obtained in LFS can be used for
estimating output and value added in a specific local level
needs to be tested.
Thank You