Measurement of non market volume output Clarification item C10

1
Measurement of non market volume
outputClarification item C10

• Charles Aspden on behalf of
• François Lequiller
• OECD

2
Status of item

• ISWGNA accepted to open a clarification item C10
  on measurement of volume non market output
• The objective is to incorporate in the SNA the
  recommendations of the Atkinson report and of
  Eurostats Handbook on volume and prices
• No conceptual change of the SNA is proposed

3
Status of item (continued)

• The message remains to recommend  output
  methods  for individual services, but to accept
   input  methods as a second best for collective
  services
• However, reference is made to  willingness-to-pay
    as a quality effect, with impact on volume
  measures (but not on current price measure)
• The proposal appears as a set of new or amended
  paragraphs

4
Theory of marginal benefits

• 16.134 the general conditions of market prices
  do not apply for non market prices
• 16.135 in theory, the price relative of non
  market services should reflect  marginal
  benefit , which is equal to  willingness to
  pay 
• there is evidence that the change in
  the value of many non market services is linked
  to the general propsperity in a countrys economy

5
Change in marginal benefit impacts volume

• 16.136 However, the current price value of
  government output remains equal
• to the sum of costs (including capital
  services?)
• The change in the marginal benefit
  for the consumer is to be treated as a change in
  the volume of the services
• The rationale is that this price change
  corresponds to a change in the content of the
  service. It is therefore treated as a change in
  quality, thus a change in volume.

6
Recommendations on output methods

• 16.139 the objective is to identify that part of
  the overall change in outcome directly
  attributable to the non market services
• 16.140 use cost weights,
• respect two criteria reflect full range
  of services make allowance for quality change
• 16.141 test output methods and implied
  productivity measures with experts of the domain
• Use input methods if the tests are
  not satisfactory

7
Health

• 16.142 definition of health services
• main recommendation use
  cost-weighted number of treatments, taking into
  account quality adjustments
• illustration in the case of hospital
  services to inpatients use detailed number of
  treatments by category of desease
• adjust, if possible, for quality
  change

8
Education

• 16.143 definition of education services
• main recommendation use detailed
  cost weighted quantity indicator.
• stratification should at least
  distinguish pre-school, primary, lower secondary,
  higher education and other education
• proposed indicator number of hours
  of pupil attendance
• include quality change (school
  inspection, pupil/teacher ratio, exam success)

9
Collective services

• 16.144 Current SNA paragraph is left unchanged
  it may not be feasible to avoid using the input
  method
• 16.145 existing SNA paragraph defining how to
  deflate inputs is left unchanged