Measuring the Non-Observed Economy [electronic resource] : a Handbook

233 Pages·2002·6.7 MB·English

by  Organisation for Economic Co-operation and Development

STATISTICS
Measuring the
Non-Observed
Economy
A Handbook
Copyrightedmaterial
©OECD,2002.
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STATISTICS
Measuring the
Non-Observed
Economy
A Handbook
ORGANISATIONFORECONOMICCO-OPERATION
ANDDEVELOPMENT
forcePounrs3u0atnhtSteopArtteimclbeerIo1f9t6h1,eCthoenvOerngtainoinsastiigonnedforinEPcaornisomoinc14Ctoh-oDpeecreatmiboenra1n9d60D,eavnedlwohpimcehncta(mOeEiCnDt)o
shallpromotepoliciesdesigned:
-toachievethehighestsustainableeconomicgrowthandemploymentandarisingstandardof
livinginMembercountries,whilemaintainingfinancialstability,andthustocontributetothe
developmentoftheworldeconomy;
-tocontributetosoundeconomicexpansioninMemberaswellasnon-membercountriesinthe
processofeconomicdevelopment;and
-tocontributetotheexpansionofworldtradeonamultilateral,non-discriminatorybasisin
accordancewithinternationalobligations.
TheoriginalMembercountriesoftheOECDareAustria,Belgium,Canada,Denmark,France,
Germany,Greece,Iceland,Ireland,Italy,Luxembourg,theNetherlands,Norway,Portugal,Spain,
Sweden,Switzerland,Turkey,theUnitedKingdomandtheUnitedStates.Thefollowingcountries
became Members subsequently through accession at the dates indicated hereafter: lapan
(28thApril1964),Finland(28thJanuary1969),Australia(7thJune1971),NewZealand(29thMay1973),
Mexico(18thMay1994),theCzechRepublic(21stDecember1995),Hungary(7thMay1996),Poland
(22ndNovember1996),Korea(12thDecember1996)andtheSlovakRepublic(14thDecember2000).The
CommissionoftheEuropeanCommunitiestakespartintheworkoftheOECD(Article13oftheOECD
Convention).
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©OECD2002
Permissiontoreproduceaportionofthisworkfornon-commercialpurposesorclassroomuseshouldbeobtained
throughtheCentrefrangaisd’exploitationdudroitdecopie(CFC),20,ruedesGrands-Augustins,75006Paris,
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FOREWORDANDACKNOWLEDGEMENTS
Completecoverageofeconomicproductionisavitalaspectofthequalityofthenationalaccounts.
Thisexhaustivenessishardtoachievebecauseofthedifficultiesinaccountingforcertaintypesof
productiveactivities.Activitiesthataremissingfromthebasicdatausedtocompilethenational
accountsbecausetheyareunderground,illegal,informal,householdproductionforownfinaluse,or
duetodeficienciesinthebasicdatacollectionsystemarereferredtoasnon-observed.Theyaresaidto
comprisethenon-observedeconomy(NOE),andincludingtheminthenationalaccountsisreferredtoas
measurementoftheNOE.
GiventhewiderangeofpossibleapproachestoNOEmeasurement,thereisaneedtoidentifyand
promoteinternationalbestpractice.ThisistheaimoftheHandbook.Itpresentsasystematicstrategy
forachievingexhaustiveestimatesofgrossdomesticproductthatisconsistentwithinternational
standardsand,inparticular,withthe1993SystemofNationalAccounts.
TheHandbookwasputtogetherbyateamdrawnfromnationalandinternationalstatistical
organisations.TheprincipalcontributorswereAdriaanBloem,ManlioCalzaroni,lacquesCharmes,
MichaelColledge(editor),RalfHussmanns,YouriIvanov,BrugtKazemier,AndreiKosarev,Ronald
Luttikhuizen,SabinaRonconi,ManikShrestha,SeppoVarjonen,PetervandeVenandDenisWard.
DerekBladesprovideddetailedcommentsonallchapters.Helpfuladviceandcommentswerealso
receivedfromMishaBelkindas,PeterHarper,AnneHarrison,RalfHein,VictorHolovko,OlgaIvanova,
IrinaMasakova,PaulMcCarthy,BrianNewson,VitezslavOndrus,GerhardReinecke,SilkeStapel,
AlexanderSurinovand|iriVopravil.ParticularthanksareduetotheItalianNationalStatisticalInstitute
llstat),theRussianFederationStateStatisticalCommittee,andStatisticsNetherlandsfortheiractive
supportofthisproject.
AnelectroniccopyoftheHandbookandsupportingdocumentationareavailableontheInternetat
www.oecd.org.[e-mail].
Theywillbetakenintoaccountinanyfuturerevision.
EnricoGiovannini
ChiefStatisticianandDirectoroftheStatisticsDirectorate
OrganisationforEconomicCo-operationandDevelopment
CarolS.Carson
Director
StatisticsDepartment
InternationalMonetaryFund
AbimbolaSylvesterYoung
Director
BureauofStatistics
InternationalLabourOrganisation
MikhailKorolev
Chairman
InterstateStatisticalCommitteeoftheCommonwealthofIndependentStates
©OECD2002
7
TABLEOFCONTENTS
ForewordandAcknowledgements 3
AbbreviationsandAcronyms 7
ChapterI. Introduction 9
Chapter2. ConceptualFramework 1
Chapter3. NotionsoftheNon-ObservedEconomy 35
Chapter4. AssessmentofNationalAccounts 49
Chapter5. NationalAccountsMethodstoAchieveExhaustiveness 67
Chapter6, AssessmentandImprovementofDataCollectionProgramme 95
Chapter7. ImplementationStrategy 123
Chapter8. UndergroundProduction 137
Chapter9. IllegalProduction 149
Chapter10.InformalSectorProduction 159
Chapter11.HouseholdProductionforOwnFinalUse 177
Chapter12.Macro-modelMethods 185
Annexes
1. References 195
2. Glossary 205
3. DataRequirementsandSources 231
4. AnalyticalFrameworksfortheNon-ObservedEconomy 238
5. IMFDataQualityAssessment-GenericFramework 247
ListofFigures
23..11.. l(1st9a9t3anSaNlyAtiFciaglurfera1m7.e1w)orPokpulationandlabourconcepts 2437
3.2. Productionincomeframework 47
45..11.. EEsxtaimmpalteioonfosftrGucDtPurbeyofindpauttaoqfuallaibtoyuarsmseestshmoednt(Iftralaimanewaoprpkrofaorchn)ationalaccountsestimates 8603
7.1. ElementsofNOEmeasurementimplementationstrategy 127
7.2. Enterprisesinhouseholdsectorbytypeofproduction 133
10.1.FifteenthICLS:Frameworkforinformalsectordefinition 164
ListofTables
33..12.. UClnaistsibfyicaacttiiovnitoyfbNyOcEaubsyercelgaissstirfaitciaotnioonfoufnnitosn-aonbdselarbvoeudraicntpiuvitties 4456
©OECD2002
MeasuringtheNon-ObservedEconomy:AHandbook
4.1. Primaryincomeofhouseholdsaccordingtothenationalaccountsandincometaxstatistics
4.2. UpfopretrheliNmeitthoefrulnadnedrsgr19o7u7n-d19t8r5ansactionsmissingfrompersonalexpenditure 5527
4.3. UpperlimitofundergroundtransactionsmissingfromexpenditurebasedGDP 57
4.4. NOEupperboundfortheNetherlands,1979 59
46..15.. ESuurrovsetyatrengaitsitornaatiloancacnodunctosllpercotcieonsschtaarbalcet,elriasyteircs1:bQyuasnitzietoaftievneteorvperrivsieew 16068
ABBREVIATIONSANDACRONYMS
(SeeAnnex2fordefinitionsofterms)
11999638SSNNAA SSyysstteemmooffNNaattiioonnaallAAccccoouunnttss11999638
COICOP ClassificationofIndividualConsumptionbyPurpose
CPC CentralProductClassification
CDPQIAF CDaotnasuQumaelritPyriAcsesIensdsemxentFramework(IMF)
ESA1995 EuropeanSystemofAccounts1995
FGIDSPIM FGirnoasnsciDaolmIenstteircmePdrioadtuicotnServicesIndirectlyMeasured
GDDS GeneralDataDisseminationStandard(IMF)
GFCF GrossFixedCapitalFormation
HGoEsSkomstat SHtoautseeShtoatlidstEicxaplenCdoimtmuirteteSuer(vaebybreviationderivedfromtheRussian)
HS HarmonisedSystem
ICLS InternationalConferenceofLabourStatisticians
IMF InternationalMonetaryFund
INSEE InstitutNationaldelaStatistiqueetdesEtudesEconomiques,France
ISIC,Rev.3 InternationalStandardIndustrialClassification,Revision3(UnitedNations)
INNNsSSOtaSOEt INNNtaaoattnliii-ooaonnnbaaNsllaetSSrittvaaotteniiadsslttiEiSccctaaaloltniOSsofytfmsiicytcaeelmInstitute
NPISH Non-profitInstitutionsServingHouseholds
SPPDIDS PSpreocdiuaclerDaPtraicDeiIsnsdeemxinationStandard(IMF)
VAT ValueAddedTax
©OECD2002
ChapterI
INTRODUCTION
1.2. ScopeandObjectives 12
1.3. HandbookUsers 13
1.4. ConceptsandTerminology 13
1.5. MeasurementStrategy 14
1.6. RoadmaptoHandbook 15
ByChapterContent 15
ByUser 16
©OECD2002
1. INTRODUCTION
a1s.1p.ectGofoothdeiqruaqluiatlyitnyaitsiotnhaeleaxctceonutnttoswahreicvhitatlhefyorceocvoenroamllicecpoonliocmyicmaakcitinvgitiaensd.Erxesheaaurscthi.veAncoivmeproargteanits
difficulttoachievebecauseofthewiderangeofeconomicactivities,someofwhicharedeliberately
concealedfromobservationbythoseresponsibleforthem.
1.2. Lackofcoveragecausesproblemsforusersbothintermsoflevelsandtrends.Levelsofgross
domesticproduct(GDP)andotherdataaredownwardbiased,thusgivinganinaccurateimpressionofthe
economyandimpedinginternationalcomparability.Thiscanbeofgreatsignificanceinsituationswhere,
fmoeraesxuarmepdleb,ymGonDePtapreyrchoenatdribourteinovnsirmoanmdeentoarlrescteainvdeadrdbsyaarceomunetarsyudreedpebnydpoonlliuttsaGntDPemoirsswihoennppeorveurnittyoifs
GDP.Similarly,biasesintrendestimatescanbeexpectediftheeconomicactivitiesmissingfromGDP
growatdifferentratesfromthoseincluded.Forexample,itisoftenconjecturedthatundergroundand
informalsectoractivitiesareexpandingatpreciselythetimetheofficialeconomyiscontracting
1.3. Forthenationalaccountants,lackofcoveragecausesimbalancesintheinternalconsistencyof
theaccountsbecausepartsofeconomictransactionsmaybemeasuredwhilstotherpartsarenot.For
example,householdexpendituresongoodsandservicesproducedundergroundmaybemeasured
becausethepurchasershavenoreasontohidetheirpurchases,whereasthecorrespondingproduction
activitiesarenotreportedbytheproducers.
o1.f4t.ensAuggloetstofthmaetdtihaeaGtDtePntfiiognuriessppauibdlitsohtehdebpyosnsaitbiilointaylostfatmiisstsicianlgoeffciocneosmeixcclaucdtieviltairesg,eapanrdtsreopfotrhtes
economy.Thesereportschallengethecredibilityofnationalaccountsestimatesandoftenquote
assessmentsoftheunderestimation.Theproblemisthatmanymediareportsarebasedonresearch
methodologieswithone,orboth,oftwomajorweaknesses.First,thesemethodsfrequentlyfailto
defineexactlywhatistobemeasuredandthus,possibly,missed.Thislackofprecisionregardingthe
measurementtargetisepitomisedbythewiderangeofdifferenttermsincommonuse-hidden
economy,shadoweconomy,paralleleconomy,subterraneaneconomy,informaleconomy,cash
economy,blackmarket-tomentionjustafew.Thereisnocommonunderstandingwhethertheyall
meanthesamething,andifnot,whatrelationshipstheyhavetooneanother.Capitalflight,taxevasion,
shuttletrade,theftandextortionarealllumpedtogetherasundesirableorillegalactivitiesthatare
beinggrosslyunderestimatedbytheofficialfigures.
1.5. The second problem isthe dependence ofmany estimation methods upon simplistic
assumptionsthatcannotbejustified.Forexample,theso-called"monetarymodels"assumethat
changesinthepatternsofcurrencydemandcanbeattributedentirelyto,andreflectaccurately,
changesinmissingeconomicactivities.Anotherpopularmodelisbasedonchangesinconsumptionof
electricitySuchmethodsmakeinadequateuseofthewealthofpertinenteconomicdataavailableand
thereisnoobviouswayinwhichtheirfindingscanbecombinedwithotherstoprovidemorereliable
measures.
o1f.6f.icesOdnoenootfetxhpelarienastohneisrtohwatntmheetsehomdascrsuof-fmicoidenetllsy,gaentdsothmusucuhserasttsenutpipoonsiestthhaattontahteironmaletshtaotdisstiacrael
neededanduseful.Thisdiscussionalsoraisesquestionsaboutwhatismeantbyinformal,
underground,illegal,unmeasured,unrecorded,untaxed,etc.,activities.Flowdotheseactivitiesrelate
©OECD2002