Illegal Activities

1
Illegal Activities

• NOE Meeting
• OECD, Paris, January 2006

2
Production Boundary

• If there is consent between the two parties to a
  transaction, the SNA regards it as a productive
  transaction even if it is unlawful
• Commonest examples
• Prostitution
• Production and trade in narcotics
• Trade in stolen goods

3
Prostitution

• Number of sex workers by type times
• Number of clients per head and per year times
• Average fee equals gross output
• minus Intermediate consumption equals value added

4
Narcotics

• Annual consumption of each type of drug
• Numbers of users and consumption per head
• Drug seizures by police and customs (x10?)
• Average prices
• Point of production
• Place of import
• Sale to consumer

5
Trade in stolen goods

• The original theft is non-productive because no
  consent
• If the stolen goods are sold to a third party who
  then resells it, the margin is gross output of a
  trading activity
• Motor cars are most commonly involved
• Insurance records and police statistics

6
Production of counterfeits

• Software, CDs, DVDs, Brand-name clothing,
  accessories, etc
• Manufacturing process like any other
• Trade activity like any other

7
Current practices

• All EU Member countries are supposed to include
  illegal activities at some future date yet to be
  decided
• Estimates are regularly made in a few countries
• Estonia, Poland, Czech Republic
• Increase GDP by around 1