Expenditure weights Silke Stapel Head of PPP section Eurostat.

Expenditure weights

Silke Stapel

Head of PPP section

Eurostat

Overview

ICP 2004 expenditure questionnaire

Handling of the software

Sources for final consumption expenditure by households

Main “rule” 1 to be remembered

National Accounts is an art, not a science

(David Roberts)

Main “rule” 2 to be remembered

We need a weight for each basic heading.

Main rules to be remembered

What does this mean?

brave estimates maybe necessary to establish weights for each basic headingheroic assumptions may have to be madecomparison, comparison, comparisoncross checking, cross checking, cross checkingbelieve in common sense


Structure of the questionnaires (1)

• follows the ICP expenditure classification• Maximum version as used by Eurostat/

OECD• Minimum version for ICP• regions may decide on intermediate levels• regions may split certain basic headings


Structure of the questionnaires (2)

222/ 158 Basic Headings (level 6 of the software)

152/ 126 Classes (level 5 of the software)

71/ 61 Groups (level 4 of the software)

31/ 26 Categories (level 3 of the software)

7/ 7 Main Aggregates (level 2 of the software)

1/ 1 GDP (level 1 of the software)


Every number has to be entered only once.


weights at Basic Headings’ level to be entered

all subsequent aggregations are calculated

if weights only exist at aggregated level, formula can be overwritten by respective number

manually entered aggregated numbers are copied to all levels they belong to and are used for all subsequent aggregations

Sources for final consumption expenditure by HH Reminder 1

we want to compare price levels and volumes

not only structure of GDP (weights), but also level of GDP matters

in parallel to price collection GDP must be improved, particularly exhaustiveness

consistency between prices collected and prices underlying GDP is important


• always cross-check different sources

simple comparison, common sense, what do you believe more?

set up simple use and supply tables (SUT) or input output tables (IOT)

use product balances and commodity flow


National Accounts is not the police

we do not care if something is legal or illegal

all economic activity and all expenditure should be covered in exhaustive accounts

Sources for final consumption expenditure by HH Supporting NA material from Eurostat

Exhaustiveness project guidelines and templates

Guidelines and analytical tables for private household consumption estimates

NA questionnaire on income in kind, own account production and tips

Sources for final consumption expenditure by HH Need for co-operation (1)

Coverage and structure of GDP can only be improved if there is good co-operation between:Statistical officesMinistry of Finance/ Economy/ PlanningTax offices (VAT, income taxes)Police and customsprofessional and consumers organisationsCharities

Sources for final consumption expenditure by HH Need for co-operation (2)

RC should recommend countries’ NSI to invite these other bodies and explain them objectives and scope of the exercisewin understanding and supportget access to sources you did not know they exist or which were confidentialRC may try to help NSI with particular co-operation problems

Sources for final consumption expenditure by HH Timing of weights exercise

RC provide countries with the expenditure weights questionnaire and NA questionnaires after this workshop Countries complete questionnaires with the most recent information available by June 2003RC analyse responses and identify countries in need for technical assistance by September 2003discussion at regional workshopsRC/ global office organise technical assistance from January 2004acceptable weights available by mid-2005

Sources for final consumption expenditure by HH Typical sources: expenditure point of view

household budget/ expenditure surveys (HBS)

typical problems:undercoverage of certain expenditureundercoverage of poor and very rich households

Sources for final consumption expenditure by HH Typical sources: production point of view

Retail trade statistics (RT)Production statistics (industry, agriculture)VAT or sales tax statisticsSales by utility companies and state monopoliesImport and export statisticstypical problems:undercoverage of small units, thresholdstax aviation, “double” bookkeeping, underground economysmuggling

Sources for final consumption expenditure by HH Typical sources: others

Nutrition surveys/ health statisticsnational food balancesFAO food balances’ databaseMotor vehicle registrationstatistics by professional organisations

Sources for final consumption expenditure by HH Food and non-alcoholic beverages

less problematic, but watch: own account production charities

sources: HBS RT, VAT, production statistics, imports, exports food balances, nutrition surveys

Sources for final consumption expenditure by HH Alcoholic beverages and tobacco

very problematic:own account production HBS understates considerablyproduction statistics and RT underreport foreign trade statistics underreport (smuggling)

additional sources:Ministry of health (smoking and drinking habits)capture rates of customs/ policemirror foreign trade statistics

Sources for final consumption expenditure by HH Narcotics

Politically very problematic, but if important production/ expenditure exists, estimate should be made

additional sources:Ministry of healthcapture rates of customs/ policeassistance organisations for drug addicts number of consumers of drugs by type of drug per head consumption street prices

Sources for final consumption expenditure by HH Clothing and footwear

less problematic, but watch: own account production charities

sources: HBS RT, VAT, production statistics, imports, exports

Sources for final consumption expenditure by HH Actual rents for housing

often problematic:unrepresentative rental marketsstate regulated rental marketssubsidies, social transfers in cash and kindinfrequent sources with often small sample size

sources:rent, real-estate agency surveyscensus, micro-censusadministrative information

Sources for final consumption expenditure by HH Imputed rents for housing (1)

Stratification or user cost?

Stratification: assume for owner-occupied dwelling same rent as for similar rented dwelling

sufficiently big rental market must exist

rents used must be representative

leads to rents approach in PPP

Sources for final consumption expenditure by HH Imputed rents for housing (2)

User cost: Establish GVA (as for other non-market production) by sum of the cost

criteria for stratification not fulfilled because of high owner-occupation

good estimate of capital stock necessary as consumption of fixed capital is vital part of the user cost method

see Eurostat project guidelines and templates

leads to quantity approach in PPP

Sources for final consumption expenditure by HH Water, Gas, electricity, other fuel

Problematic because of income in kind and social transfers in cash and kind

sources:

HBSRTsales by utility companies and state monopoliesimports and exportsadministrative sources on free of charge (or at reduced prices) provision to households

Sources for final consumption expenditure by HH Furnishings, household equipment etc

less problematic, but watch: own account production for furniture


Sources for final consumption expenditure by HH Health

problematic because ofdifferent social security systemsmixture of state and private systemssubsidies, social transfers in cash and kind

sources:social security, ministry of healthhospital statisticsHBSproduction statistics, imports, exportsstatistics on pharmaceutical bulk and retail trade

Sources for final consumption expenditure by HH Purchases of vehicles

problematic because ofsecond hand cars, smuggling of stolen carsdiscounts

sources:HBSRT, VATproduction statistics, imports, exportscar registration informationinformation from car dealer organisations and automobile clubs on discounts

Sources for final consumption expenditure by HH Operation of personal transport equipment

fuelHBSRT, VAT, mineral oil taxproduction statistics, exports, imports

maintenance and repair:HBSservice statistics information from automobile clubswatch: do it yourself, helping neighbors, black market for making stolen cars not recognizable

Sources for final consumption expenditure by HH Transport services

problematic because ofmixture of state and private systemssubsidies, social transfers in cash and kind

sources:ministry of transport, service statisticsHBSsales by state monopoliesadministrative sources on free of charge (or at reduced prices) provision to householdsinternet

Sources for final consumption expenditure by HH Communication

problematic because of mixture of state and private systems mixture of services and goods

sources: ministry of communication, service statistics HBS sales by state monopolies internet

Sources for final consumption expenditure by HH Recreation items and equipment, personal effects

less problematic


Sources for final consumption expenditure by HH Recreational and culture services

less problematic, but watchsubsidies, social transfers in cash and kind

sources:ministry of culture, sport, tourismculture statisticstourism statisticsHBSinternet

Sources for final consumption expenditure by HH Education

problematic because ofmixture of state and private systemssubsidiessocial transfers in cash and kind

sources:ministry of education, service statisticseducation statisticsHBS

Sources for final consumption expenditure by HH Restaurants and hotels, personal care

problematic because of tips consistency of prices in PPP and NA

sources: service statistics tourism statistics HBS

Sources for final consumption expenditure by HH Prostitution

Politically very problematic, but if important production/ expenditure exists, estimate should be madeproblematic borderline to legal services like massage and sauna clubs

sources:Ministry of healthpoliceassistance organisations for prostitutes number of persons providing and consuming services prices, intermediate consumption

Sources for final consumption expenditure by HH Social protection

content: payments of households for assistance and supports services provided to persons who are elderly, disabled, survivors, homeless etc.

sources: HBSorganisations providing such servicesrespective ministries of health, social affairs etc.

Sources for final consumption expenditure by HH Insurance

Reminder: we are only looking at the service charge

Sources: insurance supervising bodies ministry of finance/ economy consumer organisations insurance dealers insurance company business accounts

Sources for final consumption expenditure by HH FISIM/ Other financial services

FISIM: calculations by the statistical offices based on information from:

ministry of finance/ economynational central banksbanking and finance supervising bodies

Other financial services (banks charges):banking supervising bodiesnational central banksconsumer organisationsfinancial dealers

Sources for final consumption expenditure by HH Net purchases abroad

Purchases by residents abroad:HBStourist surveysnational bank (money exchange)

Purchases by non-residents on economic territory of the country

tourist surveysnational bank (money exchange)special survey among retail traders

Sources for final consumption expenditure by HH Thank you for your patience

Expenditure weights Silke Stapel Head of PPP section Eurostat.

Documents

Transcript of Expenditure weights Silke Stapel Head of PPP section Eurostat.