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Measuring the Non-Observed Economy: a Handbook Know Why These Measures Are All Different and Which Can Be Regarded As the Most Reliable

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« STATISTICS STATISTICS 2002 Measuring the Non-Observed Economy A Handbook Good-quality national accounts are vital for economic policy making and research. An important aspect of their quality is the extent to which they cover all economic activities. However, exhaustive coverage is difficult to achieve. Activities may have been excluded from the statistics used to compile the national accounts because they are underground, illegal, informal, household production for own final use, or due to deficiencies in the basic data Measuring the collection system. Such activities are said to comprise the non-observed economy, and including them in the national accounts is referred to as measurement of the non-observed economy. The aim of the Handbook is to identify and promote best practice for measurement of the non-observed economy Non-Observed that is consistent with international standards and, in particular, with the 1993 System of National Accounts. In addition, the Handbook indicates how stand-alone estimates of the informal sector, of underground production, of household production for own final use, and of some illegal activities, may be obtained. Economy The Handbook is aimed at producers and users of macroeconomic statistics. The primary audience is the staff of statistical offices involved in the collection of macroeconomic statistics and preparation of the national accounts. In addition, the Handbook may prove useful to those who have reason to be concerned about overall levels of economic production and what may be missing. It may also benefit researchers and journalists who are confronted with a plethora of alternative measures of the underground, hidden, shadow economy, etc., and who would like to Measuring the Non-Observed Economy: A Handbook know why these measures are all different and which can be regarded as the most reliable. A Handbook Further reading: System of National Accounts 1993 OECD's books, periodicals and statistical databases are now available via www.SourceOECD.org, our online library. This book is available to subscribers to the following SourceOECD themes: Emerging Economies General Economics and Future Studies Statistics Sources and Methods Transition Economies OECD Essentials National Accounts and Historical Statistics Ask your librarian for more details of how to access OECD books online, or write to us at [email protected] This work is published under the auspices of the www.oecd.org OECD’s Centre for Co-operation with Non-Members (CCNM). The Centre promotes and co-ordinates the OECD’s policy dialogue and co-operation with economies outside the OECD area. For the CCNM website, please see: www.oecd.org/sge/ccnm ISBN 92-64-19745-1 30 2002 05 1 P -:HSTCQE=V^\YZ^: © OECD, 2002. © Software: 1987-1996, Acrobat is a trademark of ADOBE. All rights reserved. OECD grants you the right to use one copy of this Program for your personal use only. Unauthorised reproduction, lending, hiring, transmission or distribution of any data or software is prohibited. You must treat the Program and associated materials and any elements thereof like any other copyrighted material. All requests should be made to: Head of Publications Service, OECD Publications Service, 2, rue André-Pascal, 75775 Paris Cedex 16, France. « STATISTICS Measuring the Non-Observed Economy A Handbook ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed: – to achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; – to contribute to sound economic expansion in Member as well as non-member countries in the process of economic development; and – to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations. The original Member countries of the OECD are Austria, Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries became Members subsequently through accession at the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland (22nd November 1996), Korea (12th December 1996) and the Slovak Republic (14th December 2000). The Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD Convention). Publié en français sous le titre : Manuel sur la mesure de l’économie non observée © OECD 2002 Permission to reproduce a portion of this work for non-commercial purposes or classroom use should be obtained through the Centre français d’exploitation du droit de copie (CFC), 20, rue des Grands-Augustins, 75006 Paris, France, tel. (33-1) 44 07 47 70, fax (33-1) 46 34 67 19, for every country except the United States. In the United States permission should be obtained through the Copyright Clearance Center, Customer Service, (508)750-8400, 222 Rosewood Drive, Danvers, MA 01923 USA, or CCC Online: www.copyright.com. All other applications for permission to reproduce or translate all or part of this book should be made to OECD Publications, 2, rue André-Pascal, 75775 Paris Cedex 16, France. FOREWORD AND ACKNOWLEDGEMENTS Complete coverage of economic production is a vital aspect of the quality of the national accounts. This exhaustiveness is hard to achieve because of the difficulties in accounting for certain types of productive activities. Activities that are missing from the basic data used to compile the national accounts because they are underground, illegal, informal, household production for own final use, or due to deficiencies in the basic data collection system are referred to as non-observed. They are said to comprise the non-observed economy (NOE), and including them in the national accounts is referred to as measurement of the NOE. Given the wide range of possible approaches to NOE measurement, there is a need to identify and promote international best practice. This is the aim of the Handbook. It presents a systematic strategy for achieving exhaustive estimates of gross domestic product that is consistent with international standards and, in particular, with the 1993 System of National Accounts. The Handbook was put together by a team drawn from national and international statistical organisations. The principal contributors were Adriaan Bloem, Manlio Calzaroni, Jacques Charmes, Michael Colledge (editor), Ralf Hussmanns, Youri Ivanov, Brugt Kazemier, Andrei Kosarev, Ronald Luttikhuizen, Sabina Ronconi, Manik Shrestha, Seppo Varjonen, Peter van de Ven and Denis Ward. Derek Blades provided detailed comments on all chapters. Helpful advice and comments were also received from Misha Belkindas, Peter Harper, Anne Harrison, Ralf Hein, Victor Holovko, Olga Ivanova, Irina Masakova, Paul McCarthy, Brian Newson, Vitezslav Ondrus, Gerhard Reinecke, Silke Stapel, Alexander Surinov and Jiri Vopravil. Particular thanks are due to the Italian National Statistical Institute (Istat), the Russian Federation State Statistical Committee, and Statistics Netherlands for their active support of this project. An electronic copy of the Handbook and supporting documentation are available on the Internet at www.oecd.org. Comments on the Handbook are welcomed and should be e-mailed to [email protected]. They will be taken into account in any future revision. Enrico Giovannini Chief Statistician and Director of the Statistics Directorate Organisation for Economic Co-operation and Development Carol S. Carson Director Statistics Department International Monetary Fund Abimbola Sylvester Young Director Bureau of Statistics International Labour Organisation Mikhail Korolev Chairman Interstate Statistical Committee of the Commonwealth of Independent States 3 © OECD 2002 TABLE OF CONTENTS Foreword and Acknowledgements ................................................................................................................. 3 Abbreviations and Acronyms .......................................................................................................................... 7 Chapter 1. Introduction.................................................................................................................................. 9 Chapter 2. Conceptual Framework .............................................................................................................. 17 Chapter 3. Notions of the Non-Observed Economy .................................................................................. 35 Chapter 4. Assessment of National Accounts............................................................................................. 49 Chapter 5. National Accounts Methods to Achieve Exhaustiveness ...................................................... 67 Chapter 6. Assessment and Improvement of Data Collection Programme .......................................... 95 Chapter 7. Implementation Strategy ........................................................................................................... 123 Chapter 8. Underground Production
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