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Eurostat-OECD Workshop on the Non-Observed
Economy for the Western Balkan Region, Paris,
23rd to 25th January 2006
MEASUREMENT OF THE NON-OBSERVED
ECONOMY EXHAUSTIVENESS ADJUSTMENTS IN THE
REPUBLIC OF SERBIA FOR THE YEAR 2003, USING
EUROSTATS TABULAR APPROACH
Dragana Ratkovic National Accounts Department
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Compiling the national accounts

• Data sources
• Annual financial statements
• Distributed public revenues and expenditures
• BoP
• Regular statistical surveys
• Adjustments
• Business and national accounts rules
• Imputed rents and other estimates
• Exhaustiveness

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Exhaustiveness Adjustment OUTPUT APPROACH

• Estimates for certain elements since 1997
• NOE project defining the different types
  (N1-N7)
• Measurement of the exhaustiveness adjustment
  (GVA)
• Impact on GDP - total
• - by type
• - by institutional
  sectors
• - by activities

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N1 Deliberately non-registering - underground
1. Labour input method unregistered
employment private ownership (small size
enterprises and entrepreneurs) Data
sources financial statements and surveys
Balancing and comparing VA/emp. Sector
S.11, S.14 NACE activity G, O, F
Estimate2003 36270.5 mill. din. or 3.31 of GDP
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N1 Deliberately non-registering - underground

• Preliminary LFS results (2004) full-time
• Data sources financial statements, surveys
  and LFS
• Sector S.11, S.14 NACE activity G, O,
  F
• Estimate2003 46898 mill. din. or 4.28 of
  GDP included in summary results
  (Table 1)
• 3. Preliminary LFS results (2004) full-time
  equivalent
• Data sources financial statements, surveys
  and LFS
• Estimate2003 82194 mill. din. or 7.5 of
  GDP

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N2 Illegal activities

• Experimental estimates for drugs and prostitution
  have been made
• Drugs
• Data sources Ministry of Interior Affairs,
  Institute of Addictive Disorders, international
  surveys (UNODC World Drug Report 2005),
  research journalists, experience from other
  countries
• Estimates from supply and demand side
• Sector S.14
• NACE activity G
• Estimate2003 3258.7 mill. din. or 0.3 of GDP

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N2 Illegal activities

• Prostitution
• Data sources Ministry of Interior Affairs
  (number of registered prostitutes in Belgrade),
  research journalists, external studies,
  experience from other countries
• Rough estimates (approximate monthly income,
  number of prostitutes, working months and IC
  20 of Output)
• Sector S.14
• NACE activity O
• Estimate2003 7302.4 mill. din. or 0.67 of GDP

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N3 Producers not required to register

• No need for specific adjustments of non-coverage
  
• Production for own consumption crops and
  livestock products and processing of agriculture
  products is included in the gross output
• Construction of dwellings
• - stipulated by law
• - building permits
• - process of legalization in 2003

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N4 Company is registered but not surveyed

• Data sources Administrative Register of legal
  persons (status on the 31.12.2003), Tax payers
  register (TIN), Financial statements (submitted)
• Measurement updating the Administrative
  Register using TIN and FS and adding the closed
  legal persons
• Assumptions those failing to submit FS ratio
  of VAT-payers and taxpayers closed legal persons
  were active for 4 months
• Sector S.11
• NACE activity A, D, G, I, L
• Estimate2003 25226,1 mill. din. or 2.3 of GDP

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N5 Registered entrepreneurs not surveyed

• Data sources Unique Register of shops, Tax
  payers register (TIN), regular statistical survey
  
• Measurement updating the Unique Register of
  shops using TIN and data from survey and adding
  closed shops estimating number of employees
• Assumption entrepreneurs have to act as small
  size enterprises within the private ownership
• Sector S.14
• NACE activity D, G
• Estimate2003 1794.3 mill. din. or 0.16 of GDP

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N6 Producers deliberately misreporting

• Data sources Financial statements, statistical
  surveys results, indicators according to the size
  of the enterprise
• Measurement two steps
• 1. Value added per worker underestimated
  
• 2. IC/Output overestimated
• Assumption small-size enterprises weighted
  average for medium and large size ones (excluded
  large companies with monopolistic status)
  entrepreneurs - as small size enterprises
• Sector S. 11, S.14 NACE activity G, K, D, F
• Estimate2003 70402 mill. din. or 6.43 of GDP

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N7 Other statistical deficiencies

• Data sources results of ad hoc survey (health
  care, education and tips), HBS, turnover in
  catering trades
• Measurement health care direct payments
  (mainly in kind) by the households considered as
  wages and salaries in kind education
  supplementary private classes tips
  restaurants, bars and cafes, hairdressers and
  beauty shops, taxi drivers, craftsmen
• Sector S.11, S.13, S.14
• NACE activity M, N, H
• Estimate2003 4638.5 mill. din. or 0.42 of GDP

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Exhaustiveness adjustment (N1-N7) - summary
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Exhaustiveness adjustment (N1-N7) relative
importance
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Final remarks

• Estimate of non-exhaustiveness was based on
  available statistical and administrative data
  sources
• Difficulties
• the lack of SBR (updating and maintenance of
  administrative register)
• cooperation with Tax Authorities
• VAT was introduced in 2005
• uncompleted results of LFS
• SUT have not been introduced yet
• possible double counting

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Future work

• Checking the results and implementing new data
  sources
• Labour force balancing (LFS final results) N1
• Verification of the results by experts N2
• Introducing the adjustments for
  non-exhaustiveness into the official national
  accounts (N4, N5, N6 and N7)
• Revision of GDP (1997-2004)

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for further contacts e-mail dratkovic_at_statserb.sr
.gov.yu

• Statistical Office of the Republic of Serbia
• Belgrade, 5 Milana Rakica St.
• phone[phone]
• fax[phone]
• information phone/fax [phone]
• library and archives 381 11 2412-922/ext 251

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