Agenda item 1a
Measuring illegal activities
Joint UNECE/Eurostat/OECD Meeting on
National Accounts and Working Group on
the Impact of Globalisation on National
Accounts (Geneva, 21-24 April 2008)
Anders Nordin
1
Illegal activities: Illegal alcohol
Alcohol production not covered by the
regular statistical observations:
• not registered production at the legal
enterprises;
• illegal production in underground
enterprises;
• household production for own
consumption;
• household production for sale.
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Illegal activities: Drugs
Illegal production activities related to drugs
include drugs production inside the
country and activities of their delivery and
sales to users.
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Illegal activities: Drugs
• Value of drug operations can be estimated
both by the production and expenditure
method.
•Data are needed on the volume of the
domestic production and expenditure,
export, import of the drugs, and also
wholesale, retail, import and export prices
of the drugs.
• Estimations to be done separately for
every kind drug.
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Illegal activities: Drugs
Intermediate consumption is estimated for
each activity: production of drugs and
trade. For the trade activity the value of
intermediate consumption is very low.
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Illegal activities: Drugs
• Volume of consumption of drugs is
estimated on the basis of confiscated drugs
and the average share of discovered cases.
• Value of consumption by the number of
drugs users, average daily drug dose by
type of drugs, number of days of the year in
which the drug is used and the average
price per dose and kind of drugs.
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Conclusions - drugs
Important to identify all possible data
sources to estimate the production and
distribution of drugs: data and
information from ministries, studies from
research institutes or done by different
experts, information from nongovernment organisations etc.
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Illegal activities: Illegal alcohol
Non registered production at the legal
enterprises is regarded as shadow but not
as illegal production and not included into
the evaluation of the illegal production
activities.
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Illegal activities: Illegal alocohol
Illegal alcohol production is undertaken by
underground enterprises and by
households for own consumption and for
sale.
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Illegal activities: Illegal alcohol
Illegal alcohol production and consumption
estimated by the balance method as
difference between registered resources
and alcohol consumption volumes by the
population.
10
Illegal activities: Illegal alcohol
The output of the forged alcohol is
estimated as physical volume multiplied by
price of the forged production (the price is
estimated on the basis of expert
evaluations and usually
should be lower than the price for the legal
products).
11
Illegal activities: Prostitution
For national accounts purposes, the
relevant aggregates are output (value of
services provided by domestic prostitutes),
imports (value of services provided by nonresidents), export services and
consumption.
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Illegal activities: Prostitution
Normally the most reliable method on the
identification of the output of prostitution
services is its definition from the supply
side (resources), on the basis of the data
on the number of employed in this kind of
activity in the country and their average
income.
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Illegal activities: Prostitution
The estimation of prostitution services
should be done by the categories of the
prostitutes, as the prices for services and
also size and structure of the intermediate
consumption for different categories are
sufficiently different (street…….elite
prostitution)
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Illegal activities: Prostitution
The estimation of the value of output of
prostitution is made using data from the
police and other institutions active in this
field with respect to the number of
prostitutes, months worked per year and
the average monthly income.
15
Illegal activities: Prostitution
The output of prostitution services can be
estimated on the basis of the data on the
number of the prostitutes and the average
value of the service for every category.
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Illegal activities: Prostitution
Intermediate consumption of the
prostitution should be related to:
• Rent paid by prostitute for the flat to
receive clients, intimate salons, massage
salons, etc.;
• Expenditures for clothes, cosmetics,
protection measures, transportation,
equipment and advertising (ads in the
newspapers.
15 -20% from the value of output.
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Illegal activities: Prostitution
For estimation of the export of the
prostitution services it is necessary to
define the number of the persons providing
services abroad.
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Illegal activities: Smuggling
Any infringements of the customs
regulations are considered to be
smuggling. These include transportation of
the prohibited goods, transportation of
goods under wrong labels, lowering the
value of the goods, etc.
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Illegal activities: Smuggling
Smuggled import and export of goods can
be defined by the balance method as
difference between registered resources
and consumption of goods.
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Illegal activities: Smuggling
On the basis of customs statistics and
expert evaluations we can define the
relation of the margin to the value of the
good in the prices of import. Therefore, it is
better to have division of the smuggled
goods into several categories depending
on the level of margin. For example,
differentiate categories as household
equipment and electronics, motor vehicles,
alcohol beverages, tobacco, and other
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goods.
Illegal activities: Smuggling
The trade output of the smuggled goods is
defined as the sum of the imported
smuggled goods multiplied by the relevant
trade margin.
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Illegal activities: Smuggling
Intermediate consumption of the trade of
smuggled goods is estimated as a
percentage from output.
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