Transcript Estimating informal production, part 2

Business statistics and registers
Estimating informal production, part 2
Copyright 2010, The World Bank Group. All Rights Reserved.
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N4
• Type N4 are registered legal persons not
included in statistics
• There are various reasons:
Statistical business register is not up-to-date
Units are incorrectly classified
Units are below a certain threshold
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Legal persons not surveyed
Legal persons not surveyed are of different types:
a) the legal person is of a type that is systematically excluded
from the business register
b) the legal person should in principle be included in the
business register but is not actually included
c) the legal person is in the business register but not subject
to survey because classification data are incorrect
d) a part of the legal person is not subject to survey because
profiling data concerning producing units are incorrect
e) the legal person is in the business register with correct
classification and profiling data but excluded from the survey
frame
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N5
• Category N5 is registered entrepreneurs not included
in statistics
• A registered entrepreneur may not be included in the
statistics for many reasons
• Even if there is a regular flow of accurate and
comprehensive information from the administrative
source the registered entrepreneur may not be
included in the business register
• An important category in many countries is output of
agricultural products for own final use
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Registered entrepreneurs not surveyed
Registered entrepreneurs may not be surveyed for different
reasons:
a) the NSO office does not conduct a survey of registered
entrepreneurs
b) the registered entrepreneur is not in the list of registered
entrepreneurs available to the NSO
c) the registered entrepreneur is in a list of registered
entrepreneurs available to the NSO but is systematically
excluded from any survey of entrepreneurs
d) the entrepreneur is in principle in scope for a survey of
entrepreneurs but in practice is excluded from the survey
frame because classification data are incorrect
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N6
• N6 - Misreporting by the producer is common
• Misreporting means that gross output is underreported and intermediate consumption is overreported
• Misreporting often involves the maintenance of two
sets of books; cash payments of salaries which are
recorded as intermediate consumption; payments in
cash without receipts; and VAT fraud
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Concealment
• Underground or concealed production is legal
production which is kept hidden for public authorities
• The most important reasons are avoiding payment of
taxes or the payment of social security contributions
• Other reasons can be the evasion of legal standards or
statistical enquiries
• Some concealed production may be covered in the
national accounts
• The borderline between non observed economy and
illegal production is not always clear
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N7
• Type N7 ‘statistical deficiencies in the data’ can be sub-divided into:
– N7a - data that is incomplete, not collected or not directly collectable
– N7b - data that is incorrectly handled, processed or compiled by
statisticians.
• Some statistical deficiencies are related to:
o
o
o
o
Handling of non-response
Production for own final use by market producers
Tips
Wages and salaries in kind
• Not all statistical deficiencies result in under-estimation of GDP
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Expenditure and income approaches
• The description of non-exhaustiveness has so far
concentrated on the output approach to GDP
• Expenditure and income approaches can also be used
• With the exception of private household consumption
and possibly exports and imports, other expenditure
components may well have similar sources to those
used for gross output and intermediate consumption
• This facilitates consistency in adjustments to the
expenditure and output approaches
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Labor input method
• The labor input method is the principal verification
method for compilation by the output approach
• The elements of the method are:
- Estimate the labor input underlying GDP estimates
- Estimate the labor input based on household survey
data
- Standardize the labor input estimates
- Compare the two sets of estimates
- Analyze any discrepancies taking into account the
reliability of the different sources
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Other methods
• Confrontation and reconciliation methods are part of
the general national accounts toolbox
• Non-observed activities will give rise to imbalances in
the basic data
• Data imbalances may provide evidence of nonobserved activities
• Comparisons may include:
- Comparison of theoretical VAT and actual VAT
- Comparison of theoretical income tax with actual income tax
- Comparisons with norms, e.g. the ratio of intermediate
consumption to gross output by activity
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Commodity flow method
• The commodity flow method involves balancing total
supplies and total uses of individual products
• The equation used is: Output = the sum of all
intermediate consumption, final consumption, changes
(positive or negative) in inventories, gross fixed capital
formation, acquisition less disposals of valuables, and
exports minus imports
• A specific application of the commodity flow method is
to derive the real output of retail trade from the supply
of commodities
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Special surveys
• Special purpose surveys may be conducted by the NSO
to assess the exhaustiveness of the national accounts
• Some methods used are:
- Surveys of expenditure on goods and services from
underground production
- Surveys of labor input to underground production
- Surveys of time use
- Surveys of the informal sector and household
production for own use
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Qualitative surveys
• Qualitative surveys of enterprises and of households can
also provide information about non observed activities
• They have a number of advantages relative to quantitative
surveys
• They are quicker and easy to answer
• They can be easily changed or supplemented to deal with
new circumstances
• They can address questions regarding the causes as well as
prevalence of non-observed activities.
• They can also provide guidance in assigning priorities for
subsequent more precise quantitative assessment
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Use of fiscal data
• Income tax and VAT files are important sources of data
for confrontation
• Tax audit data also have a part to play
• However, there are limitations
• Nevertheless tax audit samples can provide useful
information on some types of non-observed activities
• The output estimates for certain professional business
services such as accounting and legal services, and for
personal services are made on the basis of average
income per practitioner obtained from tax records
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