Transcript Some Problematic areas - African Centre for Statistics

United Nations Economic Commission for Africa
African Centre for
Statistics
Handbook on Supply and Use Table: Compilation,
Application, and Good Practices
Chapter 8 - Some problematic areas
Outline of Presentation
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Production of goods for own consumption
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Estimating imputed rents for owner occupied dwellings
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Domestic services
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Trade margins
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Transport costs
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Financial intermediation services indirectly measured
(FISIM)
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Production of goods for own consumption:
main problematic areas
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The SNA requires that all goods that are produced should be
assigned a value and included in gross output.
This applies both to goods that are sold and to those that are
used by the producer either as consumption goods or as capital
assets.
In the African context, the production of the following goods
for own consumption are particularly problematic and require
special techniques:
– Crops
– Livestock
– Buildings
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Production of goods for own consumption –
Example of calculation for crops
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Start from an estimate of the total production of the main food
crops. Possible sources: agricultural surveys, ministry of
agriculture, FAO, etc.
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Estimate the share of the production that is for own consumption
using coefficient obtained from household surveys.
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Get the value at basic prices using farm-gate prices.
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Get the value at purchasers’ prices by adding estimated
percentages for transport cost, trade margins and taxes less
subsidies on products.
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Production of goods for own consumption
Information sources for livestock
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Data on the total numbers of livestock will come from an
agricultural or livestock census or surveys of farm households.
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In countries where cattle are important, the agriculture
ministries may make animal counts every year.
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Agriculture ministries and veterinary departments can usually
supply information on production and slaughter rates.
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These are generally similar across countries so you could
borrow estimates made in a neighboring country.
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Production of goods for own consumption
Guidelines for estimations for buildings
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In many countries rural households build their own houses and
farm buildings
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The value of these buildings is the cost of purchased materials
plus the labour input to collect and process the other inputs and
erect the buildings.
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The number of dwellings constructed each year has two
components:
– New dwellings needed to house the increase in the population
– Dwellings needed to replace those that are demolished each year.
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Estimating imputed rents for owner
occupied dwellings – standard procedure
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The standard procedure recommended in the SNA for owneroccupied dwellings is to assume that the rents that would be paid
by owner occupiers are the same as the rents actually paid for
similar dwellings.
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But the standard procedure cannot always be applied for many
reasons.
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For example, the standard procedure is not applicable when so
few dwellings are rented that rents actually paid cannot be
regarded as typical or when dwellings are only be available for
rent in the capital city or other principal urban areas.
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Estimating imputed rents for owner
occupied dwellings – alternative procedure
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When the standard procedure cannot be used, expenditure on
dwellings is estimated by the user cost method.
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The user cost method consists of estimating each of the costs that
owners of dwellings would need to take into account in fixing a
market rent if they decided to rent their dwellings:
– Intermediate consumption:
– Repairs and maintenance
– Insurance service charges
– Land and property taxes
– Consumption of fixed capital
– Net operating surplus
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Guidelines for estimations for domestic
services
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The employment of domestic servants – cooks, maids, security
guards – is seen in the SNA as production by households of
services for their own consumption.
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These services are valued at the wages paid to domestic servants.
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Wages must include income in kind which may include provision
of:
– living quarter
– shoes and clothing
– Food and meals.
– Income in kind is valued at the costs to the employer.
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Guidelines for estimations for trade margins
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Trade margins have a separate column in the SUT and are one of
the adjustments to move from the supply of goods and services at
basic prices to supply at purchasers’ prices.
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Trade margins are the difference between the prices at which the
traders sells goods and the prices they paid to purchase them.
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Trade margins include both wholesale and retail margins;
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There are no trade margins on services. Trade margins are only
relevant for
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Information on trade margins usually comes from business
surveys or censuses.
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Transport costs: definition and
characteristics
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The costs of transporting goods from where they
are produced or where they arrive as imports to the
place where they are acquired by purchasers, must
also be added to basic values to obtain supply in
purchasers’ prices.
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As with trade margins, transport costs are incurred
only on goods. Services are not transported.
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Transport costs: SNA recommandations
and possible data sources
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Producers and importers may sometimes pay the
costs of transporting goods to the purchaser. If so,
the SNA recommends that these costs should be
included in the basic price, and only transport
charges “invoiced to the purchaser” are included in
the transport column of the SUT.
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Most countries will have an estimate of total
transport costs from their calculation of GDP from
the production side
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FISIM: definition and SNA recommendation
for allocation
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FISIM is the difference between interest received by
banks on loans and interest paid by banks on deposits.
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The 1993 SNA recommends that FISIM should be
allocated to the institutional sectors that consume it –
either as:
– intermediate consumption if it is consumed by
enterprises
– final consumption if it is consumed by households,
government, NPISH or the rest of the world.
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FISIM: reference rate allocation method
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The SNA suggests that the best way to allocate FISIM is
by the reference rate method.
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The reference rate is a “pure” interest reflecting only what
borrowers charge for having to postpone consumption.
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FISIM paid by borrowers is the difference between the
interest they actually pay and what they would have paid
at the reference rate
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FISIM paid by lenders is the difference between what they
actually earn as interest and what they would have earned
at the reference rate of interest.
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FISIM: alternative allocation method
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For countries having difficulties to apply the
SNA’s reference rate system, the SNA suggest a
second-best alternative:
– Allocate the total FISIM according to the shares
of bank loans and deposits of each sector.
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Suggestions and comments
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Give more practical examples
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Give an idea of the relative importance of the different
issues
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Questions for discussion
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What is the impact on GDP and it main components in
percentage of a wrong estimation of these problematic
areas?
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What is the impact on the comparability of GDP of
different countries using different methods in these
problematic areas?
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Does the use of SUTs improve significantly the quality of
the estimation of these problematic areas?
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Thank you!
African Centre for
Statistics