Towards a better measure of
non market output
The OECD non market project
Report of the joint OECD/UK/Norway workshop
(London, October, 3-5, 2006)
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November 6-10, 2006
10th NBS-OECD workshop on national accounts
Session 7 - Alain GALLAIS
The OECD non market project
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This project, focussed on education and health especially,
both in temporal and spatial dimensions, was presented by
OECD at the 2005 meeting of the Committee on Statistics.
INSEE has assigned Alain GALLAIS to coordinate this project
in OECD, for 18 months (April 2006 -> September 2007).
workshop in London, 3-5 October 2006, co-hosted by ONS
and the government of Norway. Attendance of more than 160
experts of National Accounts, PPP, education, health and
public services efficiency fields. Next workshop in Paris, 7-8
June 2007.
Possibility of a « transatlantic gap » : the US and Canada still
apply input measures. Impact of 0.25% of GDP growth/year ?
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November 6-10, 2006
10th NBS-OECD workshop on national accounts
Session 7 - Alain GALLAIS
The context : SNA 93
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16.134.
« In principle, volume indices may always be compiled
directly by calculating a weighted average of the quantity relatives for the
various goods or services produced as outputs using the values of these
goods and services as weights. Exactly the same method may be
applied even when the output values have been estimated on the basis
of their costs of production. »
16.138.
« There is no mystique about non-market health or
education services which make changes in their volume more difficult to
measure than volume changes for other types of output, such as
financial or business services or fixed tangible assets. Moreover,
changes in their volume are also needed in order to be able to measure
volume changes for the actual consumption of households. The same
principles apply to the measurement of consumption as to production. »
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November 6-10, 2006
10th NBS-OECD workshop on national accounts
Session 7 - Alain GALLAIS
The context : the European handbook
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pupil-hours or number of pupils
Education « the quantity of teaching received by the
students, adjusted to allow for the qualities of the services
provided, for each type of education » class size, school
by ISCED-97
inspections, scores ?
« the transfer of knowledge, successfully or not »
number of treatments, or consultations, or first visits
 Health
« quantity of health care received by patients,
adjusted to allow for the qualities of service provided, for
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each type of health care. »
by providers, then by functional care, then by DRGs
« The quantity of health care received by patients should be
measured in terms of complete treatments ».
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November 6-10, 2006
10th NBS-OECD workshop on national accounts
Session 7 - Alain GALLAIS
The context : the Atkinson review
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Principle A : “the measurement of government non-market
output should, as far as possible, follow a procedure parallel
to that adopted in the national accounts for market output.”
Principle B : “the output of the government sector should in
principle be measured in a way that is adjusted for quality,
taking account of the attributable incremental contribution of
the service to the outcome.”
Principle C : “Account should be taken of the
complementarity between public and private output, allowing
for the increased real value of public services in an economy
with rising real GDP”.
good practice for
6 other principles (H on triangulation…) quality adjustment
Note : the UK had already output methods, but sub-optimal ?
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November 6-10, 2006
10th NBS-OECD workshop on national accounts
Session 7 - Alain GALLAIS
The London workshop : scares and
hopes about output methods
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National Accountants
Before, with hypothesis of null
productivity,
countries
were
comparable.
Now, with diversity on quality
adjustment, countries could not be
comparable any longer.
Data on productivity will be
scrutinized by politicians
But new productivity is often
negative !
Output is not outcome
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Policy makers
Before, output in NA was of no
interest.
Interest of harmonization.
Now, NA could capture all
outcomes useful for policy
makers, with an official and
consistent label, according to the
vocation of NA.
Interest of explanations. Model of
class size.
NA can only be one-dimensional
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November 6-10, 2006
10th NBS-OECD workshop on national accounts
Session 7 - Alain GALLAIS
The London workshop : education for PPP
Proposal of an output deduced from outcome indicators.
Output in NA
(my point of view)
OECD Education
unit statistics
Outcome for policy makers
(ex of FR point of view)
PISA national scores
corrected on ESCS
+ time-lag
PISA national
average scores
Level of knowledge
Out of purpose of NA
PISA national SD
Reduction of inequalities
Externality ? Out of purpose
Ancillary activities ?
Citizenship
Health
Quality adjustment for
Rates of
upper second. vocational employment
Insertion in Labour market
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November 6-10, 2006
10th NBS-OECD workshop on national accounts
Session 7 - Alain GALLAIS
Education : draft framework for PPP (M + NM)
Recommendations Finest detail of
of the handbook
cycles
Act. Num. Quality index
F.C. pupils education
Qual
ancil.
ISCED 0
Pre-school
none
Primary school
– ISCED 1
Primary school
PISA / PIRLS +
TIMSS ?
Lower secondary
– ISCED 2
Secondary 1st stage
PISA
Special secondary
PISA
Upper secondary
- ISCED 3
general, pre-voc.
PISA
vocational
PISA + emp. rate ?
Post-sec. non tert.
Post-secondary non
tertiary
PISA
Long superior ISCED 5A
Number of
degrees
and duration of
studies.
- ISCED 4
Higher education
- ISCED 5 and 6
November
6-10, 2006
Other
education
Special primary
Short technical superiorISCED 5B
Advanced research
qualification – ISCED 6
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10th NBS-OECD workshop on national accounts
Session 7 - Alain GALLAIS
Proposals (complaints) of DH
for health output (UK)
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“Two treatments might have the same costs, but one might result in a
major increase in health outcomes (longer life, or better quality life) while
the other might have much smaller health gain. The aggregate measure
of healthcare output should reflect the number of treatments with major
health gain, rather than just taking account of current costs.”
Use of value weights (QALY = Quality-Adjusted Life years)
instead of cost weights.
Use of mortality rates and waiting times.
Use of « value weight » for statins : prevention better than
curative care.
Patient experience.
Nothing in British NA yet. DRGs not fully convenient.
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November 6-10, 2006
10th NBS-OECD workshop on national accounts
Session 7 - Alain GALLAIS
New : Paris Health accounts meeting,
6th of October, 2006
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« Cost of illness » has been compared among a dozen of
European countries, and Eurostat finds the results
homogeneous and plausible. Diseases 1st, providers 2nd.
« Cost of illness » is recommended for international
comparisons, should be integrated in SHA, which would
harmonize some conventions (fixed costs, prevention,
collective purposes…)
NL wants to calculate volume and price with this
alternative framework (no methodology yet).
But few data on QALY (main idea for quality adjustment).
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November 6-10, 2006
10th NBS-OECD workshop on national accounts
Session 7 - Alain GALLAIS
Possible content of the final
« OECD best practices manual »
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Synthesis of national experiences and results
Definitions, principles and terminology (input / output / outcome)
Then by activities (education, health)
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Definitions, principles, terminology
Review of (best) stratification and quantity indicators
Review of best quality indicators
Verification of consistency between market and non-market methods
Temporal formulas
Spatial framework and formulas
Suggestions for further developments
For September 2007
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November 6-10, 2006
10th NBS-OECD workshop on national accounts
Session 7 - Alain GALLAIS