The 5 Approaches for Splitting GDP Expenditures

1. The 5 Approaches for Splitting GDP Expenditures • Operational Material

2. Outline • Topics to be covered • Five approaches to splitting GDP • Reporting Forms Flowchart • MORES Layout • Form 2- Source data & adjustments • Completing Part II in 5 Steps • The Overall Process: Latest Year • A Conditional Step-by-step Process • The Overall Process: Year 2011 • To be reported • Schedule of Submissions

3. Five approaches to splitting GDP Direct estimation The preferred method, if data sources exist 1 Extrapolation Update an earlier expenditure breakdown using assumptions on population growth, price changes etc 2 “Borrowing” a per capita quantity or volume Requires clustering countries for each BH or group of BHs Multiply the per capita quantity or volume by the population of the “borrowing country” and the price level index between the two countries 3 “Borrowing” a structure Adjust the “borrowed” structure by a vector of the price level indexes between the two countries 4 Using expert opinion Consult retailers, manufacturers, marketing experts, chambers of commerce and other sources 5

4. Reporting Forms Flowchart Final Values for 2011 1 Initial Values for L.Y. Adjustments to L.Y. Adjustments to 2011 1 2 2 Data Sources BH Values for 2011 BH Values for L.Y. 2 2 2 Price Review for L.Y. 3 Price Review for 2011 Variations Commodity Flow 3 5 4

5. MORES Layout Introduction • Objectives • Uses of the MORES Part I • Quality Assurance Check List • Eurostat “Tabular Approach to Exhaustiveness” Part II By basic heading • Form 2- Source data & adjustments • Metadata Part III GDP Classification • Form 1- Reporting Table

6. Form 2- Source data & adjustments Latest year: 2011 Exp. obtained directly from the country's NA Exp. information from the original data source Adjustment documentation & adjusted value BH Value for the latest year availa-ble ICP Code Hea-ding Exp. value Reference Year Data Source Type Description Adjus-ted Exp. 100000 GDP 110000 Indivi-dual Consumption Exp by HH

7. Completing Part II in 5 Steps Step 1 Complete column 3 of Table 1 with whatever aggregate estimates are available Step 2 By BH • Apply 5 approaches Step 3 Automatic • Complete column 4 of Table 1 Step 4 Aggregate level • Report discrepancies between columns 3 and 4 under column 5 Step 5 All levels • Make adjustments to resolve discrepancies

8. The Overall Process: Latest Year Report Expenditures in Table 1 Expand Table 1 Complete Column 3 for GDP and Main Aggregates Create Matrix of Data Sources by Basic Heading Estimate Expenditures BH by BH [see next slide] in MORES Adjust Estimated Expenditures in MORES Review Discrepancies [Column 5 in Table 1] Complete Column 4 in Table 1

9. A Conditional Step-by-step Process Take Next Basic Heading Yes Yes Borrow per capita value Use Direct Approach Is there data for the BH for a previous year? No No Is there data for the BH for the year? Can you obtain data from expert? Is there country with similar per-capita value? 1 3 No Yes Use Expert Opinion Yes 5 No Borrow from country with similar structure Use Extrapolation 2 4

10. The Overall Process: Year 2011 Report Expenditures in Table 1 Expand Table 1 Complete Column 3 for GDP and Main Aggregates Create Matrix of Data Sources by Basic Heading Estimate Expenditures BH by BH [see previous slide] in MORES Adjust Estimated Expenditures in MORES Review Discrepancies [Column 5 in Table 1] Complete Column 4 in Table 1

11. To be reported By BH Latest Year Year 2011 Table 1 Columns 1, 2, 3 Columns 1, 2, 3 Content of Table 2: Data and metadata Content of Table 2: Data and metadata MORES Optional Optional Tables 3; 4; 5

12. Schedule of Submissions 2013 ’10 2011 2012 ’14 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Major Aggregate Data & Metadata F F Latest Year Basic Heading Data & Metadata F F Major Aggregate Data & Metadata P P F F Year 2011 Year 2011 Basic Heading Data & Metadata P P F F NCs to RCs P-Preliminary result F-Final result RCs to GO

13. THANK YOU