Vu Quang Viet
International Workshop on
Measuring GDP by Final Demand Approach
Shenzhen, China
25-27 April 2011

Categories
Final consumption
Households
NPISH
Government
Gross fixed capital formation
Households
NPISH
Corporations
Government
Changes in inventories
Imports
Exports
GDP =
+
+
+
-
+
Data availability/indicators
Retail sale, household survey
?
Readily available
Survey + data analysis
?
?
Survey
More or less readily available
Survey
Readily available
Readily available

Country
Final consumption
HH GOV GCF GFCF INV Exports Imports
China
India
0.504
0.368
0.136
0.456
0.696
0.573
0.123
0.350
0.438
0.337
0.017
0.013
0.392
0.206
0.306
0.253
Indonesia
Malaysia
Philippines
Thailand
Vietnam
Australia
Canada
USA
0.682
0.586
0.096
0.310
0.645
0.502
0.143
0.140
0.844
0.739
0.105
0.146
0.683
0.550
0.133
0.219
0.733
0.670
0.064
0.384
0.737
0.557
0.180
0.283
0.807
0.588
0.219
0.210
0.883
0.710
0.173
0.136
0.311
0.204
0.146
0.244
0.348
0.283
0.215
0.146
-0.001
-0.064
0.000
-0.026
0.036
0.000
-0.005
-0.010
0.241
0.969
0.317
0.685
0.762
0.195
0.287
0.111
0.213
0.754
0.308
0.579
0.886
0.200
0.304
0.138

SUPPLY
1
2
3
4
Indus. output basic prices
USE
1 2 3 4 5 Imports Trade & Product Product
Transport margins taxes supply purchr’ prices
31 177 5 70 22 60 15 380
2 2 59
20
10
33 179 64 20 80
2
1
0
28
-60
0
0
0
3
2
0
20
8
23
10
3
4
1
2
VA
Industry output/TT
1 2
7 93
4
1 12
1
25 69
33 179
3
30
0
1
33
64
4
14
20
5
1
5
23
2
55
80
Exports GCF FCE Product uses
37
2
1
40 145
2
1 2
41 40 163
5
9
380
8
23
10

Estimation in constant prices, year = t+n
• Given
– Industry output in basic prices
– Product price indexes
– Data on exports and imports
– Preliminary data on general government FCE and GCF
– Limited information on household FCE
• Need to do
– Convert industry output to product output in purchasers’ prices
– Deflate product output
– Estimate products consumed as intermediate inputs
– Estimate total products that can be used for GCF and household FCE

1
2
3
Data given and estimated, year = t+n
SUPPLY current prices
1 2 3 4 5 Product output in current prices estimated
0.94
0.99
0.08
0.06
0.10
0.92
1.00
0.87
Shares/coefficients in In constant prices
251.3
69.2
22.0
4
Industry output curr. prices
40 200 70 22
0.13
12
15.0
1 2 3 4 5
1
2
USE in constant prices
3
4
VA
Industry output
0.21
0.52
0.47
0.25
0.29
0.02
0.03
0.07
0.02
0.05
0.02
0.01
28.9
73.4
35.3
15.1
7.9
38.2
190.5
68.5
21.6
11.5
Product output in constant prices estimated
239.3
67.8
21.6
1.5

1
2
3
4
Total
1
2
Estimation in constant prices, year = t+n
SUPPLY Products produced
Imports Trade &
Transport margins
Product taxes
Supply of product
239.3
67.8
Data given
?
?
3
4
Total
21.6
1.5
Based on base-year ratios which then adjusted to given totals
?
?
USE Intermediate consumption
Exports
147.9
4.3
Data given
16.4
1.1
GCF FCE
Estimation by:
• Extrapolation based on survey,
• Analysis of production and import data
Uses of products
?
?
?
?

Estimation of trade (wholesaling retailing) and transport (freight) margins for base year
• Direct measurement of output of wholesaling, retailing and freight transport services provided to kind of products.
Normally:
– Wholesaling margins are assigned to intermediate consumption and gross capital formation
– Retailing margins are assigned to household final consumption
• Indirect measurement of margins
– Percentage difference between retail price (excluding all sale taxes) and basic price (normally called wholesale price or producer price) of a product unit . These unit prices are regularly collected to calculate CPI and PPI.
• Allocation rule: Normally margin on a given product is allocated proportionally to the values of products used.

• Ratios of taxes on products of the base year are calculated by kind of products.
• For that, taxes are distributed proportionally to the values consumed, excluding consumption categories that are either not subject to taxes or subject to tax deduction.

• The same ratios are applied to estimate margins and product taxes for the current year for both constant and current prices.
– Margins in constant prices: apply the ratios to values of supply at basic values in constant prices.
– Margins in current prices: apply the ratios to the values of supply at basic values in current prices.

Trade and transport margins in US, 2002
Auto
Tires
Accessories
Furniture
Cereals
Bakeries
Beef & veal
Sea food
Fruits
Vegetables
Processed fruits and vegetables
Producers’ prices
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Trade and transport margins
45%
158%
136%
101%
63%
61%
57%
62%
101%
114%
100% 62%
Freight costs
3%
2%
3%
12%
3%
2%
3%
3%
13%
21%
Wholesale and retail trade
42%
156%
133%
89%
60%
59%
54%
59%
88%
93%
Purchaser s prices
145%
258%
236%
201%
163%
161%
157%
161%
200%
214%
4% 58% 162%

Trade and transport margins in US, 2002
Crops
Forestry
Fishery
Coal mining
Crude oil, natural gas
Processed food
Glass, glass products and ceramics
Trade and transport Product Taxes
11%
8%
9%
22%
3%
13%
4%
4%
20%
8%
31%
5%
5% 4%
Wood and construction materials
17% 4%
Chemicals, fertilizers and medicinal
10% 2%
Machinery, tools and metal products
Textiles and leather products
Products of publishing houses (newspapers, periodicals and books)
Gasoline and lubricants
ALL COMMODITIES
GOODS ONLY
8%
11%
10%
5%
7%
10%
1%
2%
12%
0%
4%
4%

Allocation of supply of goods and services destined to final expenditures
• Basically, supply of a particular good or service destined to final expenditures = Total uses - Exports - Intermediate consumption
• Thus, this residue can go either to final consumption or gross capital formation.
• Allocation rules:
– Construction after deducting maintenance should go to GCF
– New automobiles should be allocated to households (FC) and other sectors (GCF) on the bases of car registration. Old car is estimated differently
– Machineries (need to identify them properly) should go to GCF.
– Besides known national inventories (oil, cereal, etc.), shares of products going to inventories should be based on surveys or base-year ratio (if no information is available.
• Estimation rules:
– Base year: all sources of data should be confronted to arrive at reliable data at both detailed and aggregate levels.
– Annual/Infra Annual: indicators based on limited but consistent set of data are used to extrapolate base-year data.

End