The complete coverage of economic production is important in order to ensure good quality national accounts and exhaustive estimates of Gross Domestic Product (GDP). A lot of attention is paid to the possibility of missing economic activities, which often suggests that the GDP figures published by national statistical offices exclude large parts of the economy. It is hard to achieve exhaustiveness since there are great difficulties to account for certain types of productive activities that cannot be observed and measured directly by the official statisticians when the national accounts and GDP are compiled. The groups of activities that are often non-observed, in the sense of not being directly observed and measured, are those that are underground, illegal, informal or undertaken by households for their final use. Furthermore, some activities may be missed because of deficiencies in the basic data collection systems. These five groups of activities comprise the non-observed economy (NOE). Despite the difficulties, the goal of most national statistical systems is to ensure, as far as possible, that the non-observed activities are appropriately measured and included in the GDP estimates. |
This publication presents an inventory of the current practices of twenty nine UNECE member countries in measuring non-observed economic activities to ensure the exhaustiveness of their national accounts. The material was collected through a survey undertaken by the UNECE Statistical Division during the period September 2001-June 2002. The countries’ contributions are synthesized, organized and edited by the UNECE secretariat in order to allow for some crosscountry comparisons of the methods used to estimate the size and importance of the different types of non-observed activities. The publication includes a number of numerical examples and estimates provided by the member countries. The publication refers to the work of OECD and Eurostat in defining the non-observed economy and developing the appropriate framework for producing exhaustive estimates of GDP. In 2002, the OECD released its Handbook for Measurement of the Non-observed Economy, which contains a framework for measuring the non-observed economy that introduces the concept of three broad areas of activity: underground, informal and illegal. The term non-observed economy is also used by the European Union in connection with its programme to guarantee the exhaustiveness of the GDP. A European Commission (1994) Decision notes that “within the production boundary, national accounts provide an exhaustive measure of production when they cover production, primary income and expenditure that are directly and not directly observed in statistical or administrative files”.