Transcript Quarterly national accounts and seasonal adjustment

Introduction to the SNA, advanced
Lesson 10
Satellite accounts
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Background
• The concept of satellite accounts was described in detail in
the 1993 SNA
• The use of satellite accounts was adopted during the 1993
SNA review because of the number of proposals for the SNA
to be extended to incorporate additional concepts within its
production boundary
– the “tourism industry”, environmental accounts (“green GDP”) and
unpaid household services were some of the more prominent
proposals
• Given the relatively undeveloped state of these concepts at
the time, satellite accounts were proposed as an alternative
– they enable these data sets to be integrated as closely as possible with
the SNA concepts but without impacting directly on the core accounts
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Background (continued)
• Alternative means of valuation can be tested in satellite
accounts
– the value of household services (commonly referred to as “unpaid
household work”) can vary markedly depending on the valuation
method used
– estimating “green GDP” depends on the value placed on various
environmental factors such as clean air, land degradation and the
services provided by nature parks, all of which are problematical to
value
• Satellite accounts have been produced by many countries in
many fields over the past decade and a half
– many of them have been regularly updated to provide a series for
analysts
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Developing satellite accounts
• The characteristics of satellite accounts differ, depending on
their main focus
• The best means of identifying the possibilities for developing
satellite accounts is to examine some of those already
produced
• In some cases, satellite accounts have become so well
established that detailed conceptual frameworks have been
developed to describe the issues involved in compiling these
types of account
– examples include Tourism satellite accounts, Health
accounts, Environmental satellite accounts, and Accounts
for non-profit institutions
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Tourism satellite accounts (TSA)
• A conceptual framework for tourism satellite accounts was
released in 2000, followed by an updated version in 2008
• Tourism is defined as the activities of persons travelling for
leisure or business and staying in places outside their usual
environment for less than one year
• The goals of the TSA are ambitious
– to estimate macroeconomic aggregates of the size and economic
contribution of tourism consistent with similar aggregates in the core
national accounts
– to measure tourism consumption
– to produce data on employment linkages with other economic
activities
– to provide a link with physical indicators such as duration of stay,
purpose of trip, modes of transport, etc
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Tourism satellite accounts (TSA) (continued)
• A visitor is defined as someone who is outside their usual
environment but not employed by an entity resident in the
place he is visiting
– the usual environment is the area (home or workplace) within which a
person is usually located
• Tourism is broader than those people who visit places for
pleasure (sightseeing, taking photographs, shopping,
attending exhibitions and shows etc)
– it also includes travelling for business or for health reasons or for
education or for training
• The concept of a “tourism industry” is set out in the TSA
– it is the grouping of those establishments whose main activity
corresponds to a tourism characteristic product
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Environmental satellite accounts
• GDP is designed to measure the economic production within a
specified production boundary
– the major emphasis in defining the production boundary is placed on
goods and services that have a monetary value or which can be valued
based on the price of similar products
• The concept of sustainable development relates to
simultaneously balancing the economic, social and
environmental needs of a community
– if any one of these needs is out of balance then the others are also
likely to be affected
– for example, an economic downturn will impact on the social needs of
a community through the unemployment created
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The conceptual framework (SEEA)
• The conceptual framework for environmental satellite
accounts is the System of Integrated Environmental and
Economic Accounting (SEEA)
• Environmental accounts aim to measure the impacts of using
natural resources and the generation of residuals that pollute
the air and water
• They also identify specific activities undertaken to prevent or
combat the environmental impacts of human activity
• Many environmental indicators are available in the form of
physical statistics (e.g. air pollution readings or the measure of
total suspended solids in water)
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SEEA – Rationale for environment accounts
• The current monetary accounts are incomplete because they
do not deal well with flows between the “real economy” and
the environment
– there is no clear or common definition of what constitutes the
environmental or “green” economy
– the SNA framework does not account effectively for the cost of using
up natural resources
• The SEEA provides a view of accounting for the environment
from the perspective of the environment but which can be
linked to human interaction
– land and ecosystem accounts
• A key rationale behind the development of SEEA to link
directly with national accounts concepts is the way in which
such links provide extra information in a coherent framework
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SEEA – Physical flow accounting
• The issues related to physical flow accounting can be under
the headings of conceptual issues and of practical issues
• Conceptual issues
– defining the product boundary
• “territory” is required rather than “residence”
• physical (non-valued) flows rather than values
– defining and classifying residuals
• Practical issues
– measuring different aspects in different units
• tonnes, joules and cubic metres
– environmental areas are subject to different influences
and operate differently, so they are recorded differently
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SEEA – valuation
• One of the major benefits of the SEEA is the way in which it
assigns values to the physical environmental indicators
• On the other hand, one of the shortcomings of SEEA is the
difficulty associated with estimating an appropriate price to
apply to the physical measures
• There is no direct price available to value many environmental
indicators
– indirect methods of valuation have to be used
– the resulting prices can be prone to large variations
depending on the way questions are asked, the payment
periods involved and even the order in which options are
presented
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SEEA – valuation (continued)
• The SEEA suggests the costs incurred when major fixed assets
are decommissioned should be included as part of the
consumption of fixed capital during the life of the assets
• Other valuation issues that SEEA has to consider are
– those relating to natural resources outside the scope of
the SNA
– measuring depletion and degradation
• A method recommended by SEEA to value environmental
assets that are excluded from the SNA is the standard method
of estimating the net present value of the assets
– the net present value of an asset is the value of the income
flows arising from the use of the asset, recorded as the
discounted present value of expected future returns
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Unpaid household services
• Unpaid household services include tasks such as preparing
and cooking meals, doing the laundry, ironing, caring for
children etc.
• The SNA specifically excludes from the boundary of
production any services produced within a household for its
own consumption
– however, the 2008 SNA provides details of how the value of these
services can be presented in a satellite account
• Both conceptual and practical issues contributed to the
decision to classify unpaid household services outside the
SNA’s boundary of production
• Personal activities that cannot be performed by a third party
should be excluded from a satellite account
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Unpaid household services – time use surveys
• The starting point for measuring unpaid household services is
to obtain details of the amount of time that households spend
on the various household activities
– a time use survey (TUS) is used to obtain such data
• A TUS is very burdensome and time-consuming for those
selected to participate and it is also costly for a national
statistics office to conduct
– a relatively small sample is selected in A TUS
– those selected are asked to provide personal details and to report
details of their daily activities
• SNA points out that the results from a TUS are not
unambiguous
– somebody may “multi-task” by preparing a meal while minding a small
child and helping an older child with their homework all at the same
time
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Unpaid household services – valuation
• The output from a TUS is data on the time spent on each type
of household work included in the TUS classification
– the data are equivalent to the labour component of the
inputs used in the input cost approach to valuing nonmarket services, such as those provided by general
government
• One of two broad methods can be used to value the time
spent on unpaid household work
– the first is based on what it would cost households in
wages to hire others to do the household work for them
– the second is based on what household members would
have earned in wages had they spent the same amount of
time on paid work as actually spent on unpaid work
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Unpaid household services – valuation issues
• Imputing a wage rate to the time spent by householders on
different activities assumes that the householder and the
person whose wage rate is being used have the same
productivity
– this is unlikely to be true because of the availability of
specialised equipment by the professional
– it should be noted that the cost of any equipment used by
the householder is already included in household final
consumption expenditure and so does not affect the value
of unpaid household services
• The opportunity cost method assumes that the “income
foregone” by the householder should be priced at the wages
that could have been obtained for the time taken, which is
unlikely in most cases
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Unpaid household services – share of GDP
• Many countries have produced estimates of unpaid
household services
• The ratio of unpaid household services to GDP vary between
countries and also within a country depending on the
valuation method applied
– an estimate of about 50% of GDP is not uncommon
– the estimates can vary significantly within a country depending on
whether a housekeeper replacement wage or opportunity cost is used
in the valuation
– the housekeeper method provides a lower end estimate, with most
estimates being between 30% and 50% of GDP
– the opportunity cost method results in the highest value, with most
estimates being between 45% and 60% of GDP
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References
• 2008 Tourism Satellite Account: Recommended
Methodological Framework
• System of National Accounts, 2008
• A System of Health Accounts
• Integrated Environmental and Economic Accounting 2003
• What is a Household’s Non-Market Production Worth?
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