Archive:Satellite accounts sharpen the focus
- Published in Sigma - The Bulletin of European Statistics, 2008/03
- By Annika östergren Pofantis, Eurostat
Satellite accounts have nothing to do with rocket science, orbiting Earth or keeping track of the number of astronauts in the world. They are statistical tools, which are used by national accountants to analyse certain events, which cannot be identified or analysed through normal national accounts.
Introduction
National accounts have very good standard tables, concepts and classifications, which are internationally recognised and harmonised. They are very useful for macroeconomic policy issues, like economic growth, inflation, public finance, balance of payments and employment. However, they can be insufficient when you want to highlight specific economic phenomena,’ said Frits Bos, private consultant in national accounting and economist at the Netherlands Bureau for Economic Policy Analysis.
Satellite accounts exist for many different areas, among which are accounts on tourism, agriculture, health, transport, education, and research and development but perhaps the most well-known example are the environmental accounts (see also article on Environmental accounts).
‘Satellite accounts and tables can meet more specific data needs by providing more detail, rearranging concepts from the standard framework or by providing supplementary information. For some purposes, it may also be necessary to deviate from some of the standard national accounting concepts to improve the link with economic, theoretical, administrative or policy concepts.’
‘Satellite accounts are compiled by combining the standard national accounts statistics with all kinds of statistics and administrative data on a specific area. A major value added of satellite accounts is therefore that they link such data on specific policy issues to macroeconomic issues, like economic growth and public finance,’ explained Mr Bos.
The first experiments with satellite accounts and tables date back to work by the French statistical office during the mid-1970s, but the area has since matured and satellite accounts are now broadly accepted. In fact, both the system of national accounts (SNA) 2008 and the revised European system of national accounts (ESA) will include new chapters on satellite accounts drafted by Mr Bos.
‘In ESA 95 the broad concepts of satellite accounts were mentioned, but in the revised version we go more into detail. We provide examples and tables to make it more concrete and useable and we mention some of the problems you can encounter when compiling satellite accounts.’
Pioneer work at Statistics Netherlands
Statistics Netherlands is one of the frontrunners when it comes to the development of satellite accounts. Mr Bos said that one of the reasons for the advanced agenda was the importance the Dutch government has attributed to national accounts for policy planning since the beginning of the 1950s.
The Dutch Statistical Office is, for example, known for its pioneer work on environmental accounts. At the end of the 1980s, Statistics Netherlands ‘invented’ the national accounting matrix including environmental accounts (Namea), which is a system that creates links between national accounts and environmental statistics. Namea shows the relationship between a number of important economic indicators, for example gross domestic product, consumption and trade balance and a range of environment pressures. The system is now commonly used in the EU.
‘Statistics Netherlands and its users consider both national and satellite accounts important and therefore we have been able to do a lot of research in this area,’ remarked Mark de Haan, national accounts expert at Statistics Netherlands.
‘The environmental accounts are still our flagship accounts. They are well established and mature. Today Statistics Netherlands is involved on the international arena, where I chair the London Group on Environment Accounts, which brings together a number of international experts. The group’s task is to provide input for the updating of the environmental accounts equivalent of the SNA: the system of integrated environmental and economic accounting (SEEA),’ he said.
In total 23 issues, such as how to measure the depletion of natural resources or the value of fish stocks, will be updated in the revised SEEA. By the end of 2009 the outcome of these discussions will be reported to the United Nations Committee of Experts on Environment Accounts and later on adopted by the United Nations Statistical Commission. The first volume of the revised SEEA is expected to be released in 2012.
Finland goes one step further
GDP is the sum of GVA and taxes (value added taxes and other taxes on products) less subsidies on products. In most Member States the national taxes and subsidies on products are distributed on the basis of the relative size of total regional GVA to all the regions. However, in Finland a new methodology was introduced in 2006, which means that taxes and subsidies are distributed based on regional expenditure.
‘We are able to use this method because we made an inputoutput study at a regional level for the year 2002. The study gives us the possibility to extrapolate taxes and subsidies on products at a regional level over the time series,’ said Mr Koutaniemi.
The result is that the regional GDP data users find differences on Eurostat’s and Statistics Finland’s homepages.
‘We believe the study, which took nearly four years to carry out, was worth it because of the increase in accuracy and quality of the regional accounts. Our users are happy and it is possible that another study will be carried out in the coming years.’
Regional details
Regional details in the accounts vary for different purposes. In Finland, data are published down to local administrative unit (LAU) 1 level of detail. This corresponded to 77 subregional units in 2006. In comparison the level of detail used by Eurostat are NUTS (nomenclature of units for territorial statistics) 3 and NUTS 2 level, which for Finland corresponds to 20 and 5 regions respectively.
Finnish users are quite satisfied with the local detail of the data, but many would like to have even more detail information. Although municipalities have been merged, users are still interested in the local situation.
‘We are lucky in Finland. Our source statistics are of a very high quality. Therefore, it is often possible for us to use the same level of detail as they do. There is no need to aggregate the data before we use it,’ explained Mr Koutaniemi.
‘In regional accounts there are normally certain trade-offs. You cannot provide as much information at a regional level as you can at a national one. What you win in regional detail, you lose in accuracy and types of data.’
Not only snapshots
At the moment, the European system of accounts (ESA) 1995 requires regional accounts data to be published only in current prices. However, many users would like to have regional GDP also in volume, which excludes the effect of inflation. In Finland, regional accounts data are released in both current and constant prices.
‘The advantage with data published in constant prices is that we not only get a snapshot of the economy, we can also see the GDP growth in different regions over the years,’ pointed out Mr Koutaniemi.
Timeliness
The regional accounts figures are transmitted with a delay of 24 months at a European level and published after 26 months. The delay is caused by the fact that regional accountants have to wait for other statistics which they use as sources and the final national accounts figures, before they can release their own final figures.
‘In most Member States the backbone of regional GVA compilation is the structural business survey, which has a delay of 18 months. This means that in June 2008 the countries report data for 2006,’ said Mr Krüger.
In Finland the first estimates of the regional accounts are published 15 to 16 months after the end of the year in question and the final figures one year later.
‘Users are never happy about delays, but the reason for them is that we depend on the input from structural business and municipality statistics, as well as the final national accounts figures,’ observed Mr Koutaniemi.