use of statistical and administrative data for national accounts

Use of Statistical Use of Statistical and Administrative and Administrative data for national data for national

accountsaccountsClementina Ivan-Ungureanu

Training: Essential SNA: Building the basics

Addis Ababa, 13-16 February 2012

Content of the presentation

• Main statistical sources used for national accounts

• Administrative sources

- need for administrative sources

- translation of administrative data into national accounts concepts

U

ADMINISTRATIVE SOURCE

STATISTICAL SOURCE

ESTIMATION

Unit 1 Unit 2 Unit n

STATISTICAL INDICATOR

NA INDICATOR

Statistical sources

Main statistical data sources used in SNA.

Survey Periodicity Data items used

Manufacture industry Monthly, Quarterly

Turnover by industry, number of employees

Statistics of energy, gas and water

Production of electric energy, turnover, prices of energy and gas, natural gas distribution, water distribution

Statistics on oil Monthly, Quarterly

Oil production,

Retrial sales Monthly, Quarterly

Turnover, number of employees

Building and engineering construction

Monthly, Quarterly

Value of construction, number of employees

Construction for households

Number of finished households constructions, and in different stage s of execution; surface, number of rooms, etc.

Services for population Monthly, Quarterly

Turnover, number of employees

Transport Monthly, Quarterly

Number of passengers, number of km. made by kind of transports

Tourism Monthly, Quarterly

Activity of tourism agency, number of hotels, number of beds, visitors

Post and telecommunication

Monthly, Quarterly

Activity of the post, telecommunication, telephone

Survey Periodicity Data items used

Imports and exports of goods

Monthly, Quarterly,

Annual

Consumer price index Producer price index Construction price index Unit value index Agriculture production Annual

Structural Business Survey (cover industry, construction, transport, other services)

Annual

Income and expenditures of enterprises. The main items: turnover, changes in inventories, investment, expenditures for intermediate consumption, wages and salaries, number of employees

Employment, earnings Monthly, Quarterly

Number of employees, wage and salaries

Labor force Quarterly,

Annul Employment, number of hours worked, by industry

Households budget Monthly, Quarterly,

Annual Income and expenditure of households, by kind

Source: Measuring the Non-Observed Economy – A handbook, OECD 2002

Statistical sources- Agriculture

• Agriculture household survey

- crop production

- number of livestock

- data of major inputs: seeds and fertilizers, expenditure for agriculture services

• Survey concerning the crop production

• Survey of annual number of livestock

• Other specific surveys

Statistical sources- other sectors

• SBS – main yearly survey

- data for the estimation of O, IC: data for the estimation of O, IC: turnover, stocks, taxes, subsidesturnover, stocks, taxes, subsides

- data about GFCFdata about GFCF

- data wages and number of employeesdata wages and number of employees

Statistical sources- other sectors (cont)

• Monthly or quarterly

- Manufacturing industry

- Construction

- Transport

- Other services

- HBS

- LFS

II MAIN ECONOMIC INDICATORS in

MANUFACTURING INDUSTRY

Code Indicator I-08 I-07 II-07

STS120 Total turnover (without VAT) STS120

STS121 Domestic Turnover STS121

STS122 Export STS122

STS130 New orders STS130

STS131 New orders for domestic customers STS131

STS132 New orders for Export STS132

STS210 Average number of employed persons

STS210

STS211 Average number of employees

STS211

STS230 Wages STS230

STS2301 Treatment and bonus STS2301

STS2201 Working days per week Number

STS2201

STS2202 Working hours per days Number

STS2202

II MAIN ECONOMIC INDICATORS FOR CONSTRUCTION

code Indicator I-08 I-09 II-09 III-09 IV-09

STS110 Volume of the turnover (without VAT) Total STS110

STS1151 - from New construction STS1151

STS1152 - from Reconstruction and major repairs STS1152

STS116 - from Civil engineering work STS116

STS130 New orders STS130

STS135 New order for new construction STS135

STS136 New order for reconstruction STS136

STS210 Average number of employed STS210

STS211 Average number of employees STS211

STS230 Wages STS230

STS2301 Treatment and bonus STS2301

STS2201 Working days per week

STS2201

STS2202 Working hours per days STS2202

LFS• Questionnaire for the household

• Individual questionnaire for the personas more than 15 years old

- Labor status

- Characteristics of the main job, secondary job

- Working time, hours worked

- Education, training

Households surveys• HBS, income and expenditure• Main sections:- Household members- Income : from wages, benefits, own

production, remittances, etc- Expenditures: durable goods, other goods

and services, health, education, transport- Information about the dwelling

ADMINISTRATIVE SOURCES

Definition

The administrative source is the register of units and data associated with an administrative regulation (or group of regulations), viewed as a source of statistical data.

Source: Glossary of Statistical Terms, OECD, 2007 http://www.oecd.org/dataoecd/9/20/1963116.pdf

Examples of Administrative Sources

- Value Added Tax (VAT) data;- Personal income tax data;- Business (including corporate) taxation data;- Social security data;- Business registration and administration

records;- Business accounts of corporations;- Records held by Central Banks;- Records (other than VAT) held by Customs and

Excise Authorities;- Records of government (central and local);

Examples of Administrative Sources (cont)

- Records held by associations of employers, of employees and of businesses and professions;

- Records held by other private sector bodies, e.g. credit rating agencies, non-profit units, etc.

- Identity cards / passports / driving licenses- Electoral register- Register of farms- Local council registers- Building permits- Licensing systems e.g. television, sale

of restricted goods, import / export

Advantages• They are ‘cheaper’ than other sources and oft

en even free.• Provide complete, or almost complete,

coverage of the population to which the administrative process applies.

• Very high response rates, no survey errors, providing more accurate and detailed estimates of sub-populations.

• Timeliness of the statistical variables derived from administrative sources could be improved.

• Reduce the response burden on businesses.

Coverage

• Administrative sources usually offer better coverage of target populations, and can make statistics more accurate:– No survey errors– No (or low) non-response

• Better coverage gives:– Better small-area data– More detailed information

Timeliness• Producing statistics from administrative

sources can sometimes be quicker than using surveys

• No need for:– forms design;– pilot surveys;– sample design etc.

Framework to access to administrative data

• ACCESS Key barrier to the use of administrative data

WAYS – depend of the existing conditions in each country

GENERAL DIMENSSION OF THE FRAME:- Legal- Policy- Organizational

Legal framework

• Legal frameworks are constructed at the national level, and are specific to national sources and circumstances.

• In some cases, relevant legislation at the international level : legislation of the European Union

• IMPORTANT : STATISTICAL LAW

Policy Frameworks• Many countries have general policies on data

sharing within government, which will influence the right of access administrative data for statistical purposes

• UN Fundamental Principles of Official statistics- principle 5 : Data for statistical purposes may be drawn from all types of sources, be they statistical surveys or administrative records. Statistical agencies are to choose the source with regard to quality, timeliness, costs and the burden on respondents

Organizational Frameworks

Organizational arrangements to facilitate data flows by written agreements and protocols.

Key elements:- Legal basis- Defining the data - Frequency of data supply- Quality standard- Confidentiality rules- Technical standards- Provision of metadata

Problem (i)

1.Obtaining access to administrative sources.

2.The information used in administrative sources does not directly correspond to the statistical indicator definitions

3.The classification systems used within administrative sources may be different to those used in the statistical world

Problem (ii)4. Timeliness. Data may either not be

available in time to meet statistical needs or refers to a period that does not coincide with that required for statistical purposes

5. Inconsistency between sources

Problem (iii)

6. Administrative sources are generally set up for the purpose of collecting taxes or monitoring government policies. For this reason, they are susceptible to political change.

7. Resistance to change

1.Public Opinion• The level of public concern about

government departments sharing data varies from country to country

• There is usually some suspicion of the motives for data sharing

• Sometimes public opinion favours data sharing

Solutions• Adopt and publish a code of practice following

international standards

• Clearly stated limits and rules may help reduce concerns

• The principle of the “one-way flow” of sensitive data must be understood by all

• Publish cost-benefit analyses of the use of different sources

2.Definitions of Variables

• Administrative data are collected according to administrative concepts and definitions

• Administrative and statistical priorities are often different, so definitions are often different

Example: Unemployment

• Statistical definition (ILO)

– Out of work

– Available for work

– Actively seeking work

• Administrative definitions are often based on those claiming unemployment benefits

Solutions• Know and document the differences and

their impact

• Use other variables to derive or estimate the impact of the difference

• Statistical adjustments during data processing

3.Classifications• Used for different purposes

• May not be a priority variable for the administrative source

• Different classification rules for the same classification

• Different classifications used

Solutions• Understand how administrative data are

collected and what classification is used• Collaboration for the use of the same

classifications ( help of Government)

• Stress the advantages of using a common classification

• Provide coding expertise, tools and training to administrative data suppliers to use the same classification

Solutions ( cont)

• Provide coding expertise, tools and training to administrative data suppliers to use the same classification

• Use text descriptions to re-code administrative data

4.Timeliness

Two Issues

• Data arrive too late

• Data relate to a different time period

a. Data arrive too late• Data from annual tax returns are often only

available several months after the end of the tax year, so they are unsuitable for monthly or quarterly statistics

• Lags in registering “real world” events

Solutions• Understand the length and impact of lags

• Adjust data accordingly

• Look for ways to reduce lags where possible – collaboration with Ministry of Finance

b. Different Time Periods

• Administrative reference period (e.g. Financial/tax year) may not be the same as the statistical reference period

• Monthly average versus point in time (e.g.

employment data)

Different Time Periods

Statistical / Calendar Year

(0.25 x 146) + (0.75 x 168) = 162.5

(or more complex formulae)

Financial Year 1 Financial Year 2

146

168

Solutions

• Statistical corrections

• Estimations using data from other reference periods

5. Inconsistency between sources

• Data from one source may appear to contradict those from another. This may be due to different definitions or classifications, differences in timing, or simply to an error in one source.

• Could be between:- Administrative and statistical sources- Two administrative sources

Solutions

• Establish priority rules

• Analysis of the variable evolution and trend

6. Change Management• Risk of changes in:

– Government / administrative policy– Thresholds– Definitions– Coverage– Systems

Happed:• Immediately after an election• Change of government, of minister

Solutions

Manage the Risk by:

– Legal provisions

– Contractual agreements

– Regular contact with administrative colleagues

– Anticipating changes

– Contingency plans

7. Resistance to Change

One of the least recognized, can come from within the organization.

• Statisticians may resist the use of administrative data because they do not trust data that they have not collected themselves.

Solutions

• Better education of statisticians

• To analyze and determine the real quality of survey and administrative data.

• to show that cost savings from using administrative data do not necessarily mean staff reductions

TRANSITION FROM ADMINSTRATIVE

DATA TO NATIONAL ACCOUNTS

INDICATORS

How administrative sources are used?

• It is a complex process• It is not a standardised process, but specific to

each country, according to its specific administrative data sources

Two main steps involved:- Constructing transition tables (so-called “bridge

”from administrative data sources to SNA aggregates;

- Applying adjustments in order to fulfill the SNA conceptual requirements, when needed

How administrative sources are used? (cont)

Preparation of “bridge tables”:a) Identification of administrative data sources;b) Analysis of content in respect of national

accounting methodological requirements;c) Collection of data source indicators;d) Translation of each indicator from

administrative data sources into national accounts concepts;

e) Application of adjustments to meet national accounting requirements;

f) Estimation of the national accounts indicators.

ADMINISTRATIVE SOURCES ANALIZING

THE CONTENT

COLLECTION

BRIDGE TABLES

ADJUSTMENTS

NA INDICATORS


The adjustments, could be:- conceptual adjustments, - adjustment to achieve accounting consistency

with other sectors- adjustments for exhaustiveness

In general, the quality of the transition system depends on the stability and harmonization (nationally, internationally) of administrative sources


“Bridge tables” – to be developed for all administrative sources, the most important being :

- Financial statements of enterprises;- Budgetary statements of general government

institutional units;- Balance of payments

“Bridge tables” for are specific to each country, depending on the national accounting tradition

How is made the transition? From financial statements of enterprises

to SNA

The common zones for accounting modeling and harmonization are: the reporting entity (“who?”) assets (“which result?”) flows (“how?”)

• A positive aspect: the extending of the international standardization of accounting world wide, with impact on stability of the transition

• The example is based on the International Accounting Standards

How is made the transition? From financial statements of enterprises to

SNA (cont)

• Direct relations business accounts (IAS/IFRS) and SNA

National accounts Business accounts

Production account, Income accounts

Income statement (Profit and loss account)

Financial account Change in financial position and statement of cash-flows

Capital account, Balance sheet

Balance sheet


SNA (cont)• Direct relations business accounts (IAS/IFRS) and SNA

National accounts Business accounts

Register production, intermediate consumption, value added

Register sales and cost of sales

Valuation of stocks, consumption of fix capital and assets at market prices

Valuation of stocks, consumption of fix capital and assets at historical prices or accounting value

Earnings or loss of capital are not registered as income or expenditure , but only changes in balance sheet due to price changes (re-evaluation account)

Earnings or loss of capital are registered within profit and loss account as income or expenditure

Only actual costs are registered Expenditure with provisions are registered (supposed and established based on past behavior)


SNA (cont)Examples of SNA aggregates which could be compiled using

directly the business accounts indicators:

• Output (SNA)= Output sold + Output held as inventory + Capitalized output + Sales of goods bought for resale - Purchases of goods bought for resale + Changes in stocks of goods bought for resale + Other operating income

• Intermediate consumption (SNA) = Purchases of raw materials and supplies - Changes in stocks of raw materials and supplies + Other purchases and external charges + Other operating costs

• Compensation of employees (SNA) corresponds to the expenses incurred by an enterprise in relation to its employees


SNA (cont)

Other indicators:

• Taxes and subsidies (SNA):

• Property income (SNA) includes interests, dividends, rents on non-produced assets and equity earning

• Gross fixed capital formation (SNA)- difference between acquisitions and disposals of fixed assets

How is made the transition? From financial statements of enterprises to SNA

(cont

Example

• Output = 32200 (1) + 500 (2) + 80 (3) + 300 (4)- 100 (5) = 32 980

• Intermediate consumption = 15 000 (6) + 10000 (7) – 300 (8) = 24700

• Gross value added = Output (32980) – IC (24700) = 8280


to SNA (cont

Adjustments • On output - applied for the transition to basic price

valuation in SNA;• Own-account output of research and development is

part of output in SNA. In business accounting it is not valued as output, so it should be added to the total output;

• Adjustment (in plus) for deliveries between establishments belonging to the same enterprise impacts the value of output and intermediate consumption

• Adjustment for holding gains/losses in stock valuation


SNA (cont

• Output _ adj.= 32980 -1800 + 80 -310 + 300 +2100 +900 = 34250

• IC_adj.= 24700 + 400 + 150 +230 + 650 = 26130

• GVA_adj.= Output (34250) – IC (26130) = 8120

Output Intermediate consumption

Gross value added

Total accounting 32980 24700 8280

Conceptual adjustments: ~Taxes on products -1800 ~Subsidies on products 80 ~Holding gains -310 400 ~FISIM allocation 150 ~Intra-unit deliveries 300 230 Exhaustiveness adjustments: ~Black labour 2100 650 ~VAT fraud 900 TOTAL National accounts indicators 34250 26130 8120


to SNA

• Wide variety of financial units in the world – a complexity of financial statements normalized at national and/or international level

• To use accounting information – deep knowledge in the accounting and legislation in the field used by these units

• Examples : - financial intermediation and insurance and

pension schemes services- banking, - insurance companies


SNA (cont)

Banks

• Banks accounts are in general internationally standardized, using the structure and specific requirements regulated by IAS/IFRS


SNA (cont)

Banks• Banks accept deposits from units wishing to receive

interest on funds for which the unit has no immediate use and lends them to other units whose funds are insufficient to meet their needs

• Each of the two parties pays a fee to the bank for the service provided, by accepting a rate of interest lower than that paid by the borrower, the difference being the combined fees implicitly charged by the bank to the depositor and to the borrower

• From this basic idea emerges the concept of a ‘reference’ rate of interest (R*)


(cont)

Banking institutionsAssuming that R* = 1.5%:FISIM = FISIM loans +

FISIM deposits = [78 820 (3) – 4 378 889 (1) x R*] + [512 500 (2) x R* – 61 830 (5)] =

• 13 137 + 15 458 = 28 595

• Output = 28 595 (FISIM) + 10 950(6) = 39545

• Intermediate consumption = 2 980 (7) + 10 480 (9) = 13 460

• Gross value added= 39 545 – 13 460 = 26 085


SNA (cont)

Insurance companies

• Insurance services are specific financial intermediations

• The accounting statements of insurance companies are normally regulated by international accounting standards (IAS/IFRS)


SNA (cont)

Insurance companies• Output of insurance services in 2008 SNA is

particularly important• Formula for compiling output is separate:- for non-life insurance and - life insurance.


SNA (cont)

Insurance companies

• Non-life insurance output – compilation formula:

Total premiums earned + premium supplements – adjusted claims incurred

• Example of a simplified bridge table for non-life insurance institutions linking income statement transactions (as set out in IAS/IFRS and European Directives on Accounting) to SNA transactions


(cont)Non-life insurance:

• Output = Premium earned (25 700 (1) – 40 (6)) + Premium supplements (700 (5)) + Other technical income (100 (3)) - Adjusted claims incurred (6 500 (4) + 90 (8)) = 19870

• IC = Net operating expenses (3 000 (7)) – Wages and salaries (800 (7e)) – Depreciation (250 (7f)) = 1950

• GVA= Output (19 870) – Intermediate consumption (1950) = 17 920


SNA (cont)

Insurance companies

• Life insurance output – compilation formula:Premiums earned + premium supplements – benefits

due - increases (+ decreases) in life insurance technical reserves

• An example of simplified bridge table for life insurance institutions linking income statement transactions (as set out in IAS/IFRS and European Directives on Accounting) to SNA transactions is shown in Handbook


Non-life insurance:

Output = Premium earned (13000(1) – 30(7)) + Premium supplements (4600(2)) –Difference of gains and losses in realization of investments (40(3) – 60(12)) – Benefit due (3000(5)) – Changes (+/–) in technical reserves (100(6)) =14490

IC= Net operating expenses

(5000(8) – 1250(9) – 900(10)) + Investment charges (30(11)) + Other technical charges, net of reinsurance (1 (13)) = 2881

GVA= Output (14490) – IC (2281) = 11609

How is made the transition? From Government financial statements

to SNA• Data for the general government sector - central element in

compiling national accounts• Statistics for government units and public corporations are

derived from the government financial accounting. • Accounting information is normalized by International Public

Sector Accounting Standards (responsibility of International Public Sector Accounting Standards Board of the International Federation of Accountants)

• Detailed accounting data must be transposed correctly into the framework of the SNA - need for clear guidance on the compilation of GFS

• Main difference: general government data sources are valued on cash basis, SNA uses accrual basis valuation

How is made the transition? From Government financial statements to SNA

(cont)

• The presentation of government finance: the budgets of government units (state, central, local, social security, etc.)

• The budgets consist of transactions that:

- increase net worth based on ‘revenues’ and

- decrease net worth based on ‘expenses’

• There are two main balancing items:

- ‘net operating balance’ and

- ‘net lending or net borrowing’

How is made the transition? From Government financial statements

to SNA (cont)Revenues (resources acquired by governments) comprise:• taxes, • social contributions including grants, • other current revenue (property income, market sales of

goods and services, fines, penalties and forfeits, voluntary transfers, miscellaneous and unidentified revenue)

• capital transfers receivable

Revenues are registered in SNA in: current accounts and capital transfers receivable (capital account)

How is made the transition? From Government financial statements to

SNA (cont)

• Expenses (all uses incurred by governments) comprise:

• production expenses (compensation of employees, intermediate consumption and consumption of fixed capital),

• interest payable, grants, social benefits,

• other current expenses and capital transfers payable

Expenses are registered in SNA in: current accounts and capital transfers payable (capital account)

How is made the transition? From Government financial statements to SNA

(cont) Budgetary items

from income side

• Each budgetary item is classified to SNA transaction.

• Then the SNA accounts are compiled

How is made the transition? From Government financial statements to SNA (cont)

• Each budgetary item is classified to SNA transaction.

• Then the SNA accounts are compiled

How is made the transition?

From Balance of payments to SNA• Balance of Payments (BoPs) describes all international transactions between residents and non-residents during a specific time period

• BoPs used for building accounts for the rest of the world sector of SNA

• BoPs compiled according to ‘Balance of Payments and Investment Position Manual’ 6th edition (BPM6)

• 2008 SNA uses the same macroeconomic framework as BPM6

How is made the transition? From Balance of payments to SNA (cont)

• Each BoP item is classified to SNA transaction, in uses and resources.

• Then the SNA sequence of accounts of RoW are compiled

Main administrative sources for NA estimation

use of statistical and administrative data for national accounts

Documents

number of employeesbuilding

number of employeesemployment

number of hotels

number of beds

number of employeesstatistics

number of hours

number of rooms

administrative data