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Training Session on National Accounts. ICP Global Office September 2011. Approaches for Splitting GDP Expenditures. ICP requirement: detailed data needed only once every several years

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Training Session on National Accounts

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Training session on national accounts

Training Session on National Accounts

ICP Global Office

September 2011


Approaches for splitting gdp expenditures

Approaches for Splitting GDP Expenditures


Training session on national accounts

  • ICP requirement:

    • detailed data needed

    • only once every several years

  • Disaggregating GDP into the detailed basic headings is the core part of the national accounts data needed for the ICP

  • Countries will experience some difficulties in providing estimates of final expenditure for all the basic headings required

  • Participating countries should assign weights to all basic headings


  • Training session on national accounts

    • National accounts data for 2011 need to be available by July 2012 (some cases based on preliminary data)

    • Many basic heading details might have to be estimated by using data relating to years earlier than 2011 to split the major aggregates for 2011


    Training session on national accounts

    Five approaches to splitting GDP

    Direct estimation

    The preferred method, if data sources exist

    1

    Extrapolation

    Update an earlier expenditure breakdown using assumptions on population growth, price changes etc

    2

    “Borrowing” a per capita quantity or volume

    Requires clustering countries for each BH or group of BHs

    Multiply the per capita quantity or volume by the population of the “borrowing country” and the price level index between the two countries

    3

    “Borrowing” a structure

    Adjust the “borrowed” structure by a vector of the price level indexes between the two countries

    4

    Using expert opinion

    Consult retailers, manufacturers, marketing experts, chambers of commerce and other sources

    5


    Training session on national accounts

    • Direct estimation

    • Estimation techniques used in compiling national accounts can assist in obtaining the detailed data required for the ICP:

    • commodity-flow method

    • supply-use tables (SUTs)


    Training session on national accounts

    Extrapolation

    Common cases

    country to regularly compile annual production-based measures of GDP but expenditure-based estimates are available infrequently

    2011 level of expenditure GDP can be assumed to be equal to that measured from the production side of the accounts

    The Global Office encourages countries to develop improved procedures to allocate expenditures to basic headings: Commodity-flow techniques and supply-use tables

    the experience and knowledge of the national accountants, can be invaluable in calculating the detailed splits required for the ICP

    Last resort procedure: prorate the level of GDP according to the basic heading distribution from the 2005 ICP, if available


    Training session on national accounts

    Extrapolation

    ii) Expenditure-based estimates of GDP are available on a regular basis but there is a considerable lag in producing them and they have not yet been updated to 2011

    statistical surveys

    Administrative records (Custom data for Exports and imports of goods,

    building approvals for gross fixed capital formation on buildings ,

    credit cards for household final consumption expenditure, VAT data )

    Othersources of information (publications of regulatory bodies and trade associations)


    Training session on national accounts

    Extrapolation

    ii) Expenditure-based estimates of GDP are available on a regular basis but there is a considerable lag in producing them and they have not yet been updated to 2011

    statistical surveys

    Administrative records (Custom data for Exports and imports of goods,

    building approvals for gross fixed capital formation on buildings ,

    credit cards for household final consumption expenditure, VAT data )

    Othersources of information (publications of regulatory bodies and trade associations)


    Training session on national accounts

    A Conditional Step-by-step Process

    Consider a Basic Heading

    Yes

    Yes

    Borrow per capita value

    Use Direct Approach

    No

    No

    Is there data for the BH for a previous year?

    Is there data for the BH for the year?

    Can you obtain data from expert?

    Is there country with similar per-capita value?

    Yes

    1

    No

    3

    Yes

    Use Expert Opinion

    5

    No

    Borrow from country with similar structure

    Use Extrapolation

    2

    4


    Model report on expenditure statistics mores

    Model Report on Expenditure Statistics (MORES)


    Training session on national accounts

    The Model Report on Expenditure Statistics (MORES)

    The MORES aims to assist countries to compile

    Detailed expenditurevalues for each basic heading of the ICP classification.

    Information on the splitting approach

    Information on the indicators that were used/or are going to be used to estimate the expenditure values


    Training session on national accounts

    MORES’s Structure

    NA data information for the latest year available

    Tabs 1 and 4 include initial expenditure values, estimated expenditure values and the discrepancies between those two values. It is recommended that the user insert the values at the basic heading levels. All aggregated levels will be calculated automatically.

    Tabs 2 and 5 compile, for each basic heading, the detailed information of the splitting approach and for all indicators used to collect data related to National Accounts and reveals the estimated expenditure values for the latest year available or for 2011.

    Tabs 3 and 6 summarize the final expenditure values for the latest year available or for 2011 respectively and it will be automactically filled with the discrepancy information of the initial and estimated expenditures values.

    NA data information for 2011

    Parameters used in previous tabs


    Training session on national accounts

    Expanded Form 1

    GDP Classification

    Initial Expenditure Value

    Estimated Expenditure Value

    Discrepancies

    Code

    Heading

    Sheets 1 and 4 include initial expenditure values, estimated expenditure values and the discrepancies between those two values.

    4

    5

    1

    2

    3

    100000

    Gross Domestic Product

    110000

    Individual Consumption Expenditure by Households

    110100

    Food and non-alcoholic beverages

    110110

    Food

    110111

    Bread and cereals

    110111.1

    Rice

    [...]

    […]


    Training session on national accounts

    Estimation of BH Expenditures

    #

    MORES Template

    Indicator name

    Sour ce name

    Year

    Value

    Unit

    Sheets 2 and 5 compile, for each BH, the detailed information of the splitting approach and for all indicators used to collect data related to National Accounts and reveals the estimated expenditure values.

    Code

    Name

    3

    4

    5

    6

    7

    8

    1

    2

    100000

    Rice

    Splitting Approach

    2

    Extrapolation

    Code

    Estimated Expenditure for


    Training session on national accounts

    Final Expenditure Values

    GDP Classification

    Expenditure Value

    Code

    Heading

    Sheets 3 and 6 summarize the final expenditure values for the latest year available or for 2011 respectively and it will be automatically filled with the discrepancy information of the initial and estimated expenditures values.

    1

    2

    3

    100000

    Gross Domestic Product

    110000

    Individual Consumption Expenditure by Households

    110100

    Food and non-alcoholic beverages

    110110

    Food

    110111

    Bread and cereals

    110111.1

    Rice

    [...]

    […]


    Training session on national accounts

    Completing the MORES in 6 Steps

    Sheets

    1

    1

    Complete column 3 of sheet 1 with whatever aggregate estimates are available

    2

    2

    Apply 5 approaches

    3

    From 2 to 1

    Column 4 of sheet 1 receives expenditures values from sheet 2

    4

    1

    Discrepancies between columns 3 and 4 appear under column 5

    5

    1 or 2

    Make adjustments to resolve discrepancies

    6

    3

    Read results if discrepancies solved


    Mores case study

    MORES – Case Study


    Completing mores example

    Completing MORES - Example

    Step 1

    Complete Table1 with whatever aggregate estimates are available.


    Completing mores example1

    Completing MORES - Example

    Step 2

    Complete Table 2 for each basic heading using five splitting approaches.


    Completing mores example2

    Completing MORES - Example

    Step 3

    Table 3 will be automatically filled once discrepancies between aggregate figures and summation of BHs have been resolved.


    Training session on national accounts

    Fictitious country case statistics

    48 indicators were used and five major indicators account for 46% (162 out of 351).


    Fictitious country case statistics

    Fictitious country case statistics


    Multiple approach examples

    Multiple Approach Examples


    Issues

    Issues

    Lack of sources

    • Lack of overall resources, heavy dependence on expert opinions

    Iterative process

    • Iterative process occurs when borrowing a structure from another country

    Distribution of specific BHs

    • Distribution of specific basic headings such net expenditures abroad

    Limited adoption of imputing methods

    • Limited adoption of imputing methods including the user cost method (housing)


    Training session on national accounts

    THANK YOU


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