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challenges in Estimation of gdp through household income approach : Country experience

challenges in Estimation of gdp through household income approach : Country experience. S.C Malik , Director Monojit Das, Deputy Director Ministry of Statistics & Programme Implementation INDIA. GROSS DOMESTIC PRODUCT.

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challenges in Estimation of gdp through household income approach : Country experience

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  1. challenges in Estimation of gdp through household income approach : Country experience S.C Malik, Director Monojit Das, Deputy Director Ministry of Statistics & Programme Implementation INDIA

  2. GROSS DOMESTIC PRODUCT • measure in monetary terms of all the commodities (goods and services) produced without duplication within a given period of time • value terms • counted without duplication 26-28th March, 2012- Beijing, China

  3. Approaches for National income • Three alternative approaches • Production Approach • Measured at the point of production • Income Approach • Measured at the point of income generation or at the point of final utilisation • Expenditure Approach • Measured at the point of final utilisation or consumption • Can be measured in any one of these • Better if measure by all for a complete analysis of the economy 26-28th March, 2012- Beijing, China

  4. Expenditure Approach • Income available is used up in the form of final consumption or saving or capital formation • GDP = PFCE + GFCE + GFCF + CIS + Export - Import • GCF = GFCF + CIS (PFCE: Private Final Consumption Expenditure, GFCE: Government Final Consumption Expenditure, GCF: Gross Capital Formation, GFCF: Gross Fixed Capital Formation, CIS: Change in Stocks, Ex: Exports, Im: Imports) 26-28th March, 2012- Beijing, China

  5. BASE YEARS • Current Series Base Year 2004-05 (2009) • Previous series base years • 1948-1949 (1956) • 1960-1961 (1967) • 1970-1971 (1978) • 1980-1981 (1988) • 1993-1994 (1999) • 1999-2000 (2006) 26-28th March, 2012- Beijing, China

  6. NATIONAL ACCOUNTS COMPILATIONS • Annual National Accounts Statistics • Quarterly GDP estimates • Back series of NAS (one year after new series is introduced) • Sources and Methods (one year after new series is introduced) • Input-Output Transactions Table (5-Yearly) • State-wise value of output of crops and livestock products 26-28th March, 2012- Beijing, China

  7. Press Releases Release Date of release 1. Advance Estimates of national income 7th February 2. Revised Estimates of national income 31st May 3. Estimates of GDP for Q1 (Apr-Jun) 30th September 4. Estimates of GDP for Q2 (Jul-Sep) 30thNovember 5. Estimates of GDP for Q3 (Oct-Dec) 28th February 6. Estimates of GDP for Q4 (Jan-Mar) 31st May 7. Quick Estimates of national income 31st January 26-28th March, 2012- Beijing, China

  8. Early Endeavours: Income & Expenditure Survey • 1955-59: Income & Expenditure Survey (Rounds 9-14) • Schedule 1.1, specially designed for Income & Expenditure surveys, canvassed in Rounds 9-14 • Approach to assessment of income: Collect data on Receipts and Disbursements of the household 26-28th March, 2012- Beijing, China

  9. 26-28th March, 2012- Beijing, China

  10. Later endeavours 19th to 25th rounds of NSS (1964-1971) • Data on receipts and disbursements of the household were collected in an Integrated Household Survey schedule. • the receipts and disbursements blocks were placed after detailed blocks on household consumer expenditure. • however, the receipts and disbursements blocks were much more condensed, with only 16 items each. 26-28th March, 2012- Beijing, China

  11. Experiences of Integrated Household Schedule • The reporting of consumption expenditure could be affectedby collection of data on income and savings from the same household. • Also, the integrated approach to data collection on income, expenditure and savings from the same household necessarily led to a long questionnaire, causing informant fatigue. • Substantially lower estimates for consumer expenditure were obtained during the 19th to 24th rounds (in which the Integrated Household Survey schedule was canvassed). 26-28th March, 2012- Beijing, China

  12. Pilot Survey on Income, Consumption & Savings, 1983-84 Objective Development of an appropriate methodology for conducting comprehensive surveys of household income 26-28th March, 2012- Beijing, China

  13. STRATEGY Draw up two schedules. • Sch.1.1A: Income • Sch.1.1B: Consumption and Savings Divide sample households into 3 sets. Set I households: Canvass Sch.1.1A (Income) Set II households: Canvass Sch.1.1B (Consumption & Savings) Set III households: Canvass both Sch.1.1A & 1.1B 26-28th March, 2012- Beijing, China

  14. 26-28th March, 2012- Beijing, China

  15. Pilot survey on income, consumption & savings Sample size • 100 villages and 80 urban blocks (Total) • A sample of 24 households (three matched sets of 8 households each) were selected for survey from each sample village/block. • All estimates were generated for three sectors of population: rural (R), urban non-metropolitan (U-NM), and metropolitan (M). 26-28th March, 2012- Beijing, China

  16. Classification of income (by source) 26-28th March, 2012- Beijing, China

  17. 26-28th March, 2012- Beijing, China

  18. Results of the pilot survey: income • Annual disposable income (in INR) per household: R: 5,100 U-NM: 9,900 M: 16,500 • Over 10% of hhs in metropolitan cities had annual Y or C+S exceeding (in INR) 30,000. • But negative incomes (Y) were occasionally reported; • in rare cases, C+S was negative. • The difference (C+S)-Y was SMALLER (in % terms) for wage/salaried households than for the rest. • Among non-wage/non-salaried households, the difference (C+S)-Y was LARGER (in % terms) for cultivator households than for other households. 26-28th March, 2012- Beijing, China

  19. Comparison of Y and C+S Rural sector (R) • From Set III hhs (both Y and C+S data collected), av.(Y) was 30% less than av.(C+S). • Using Y from Set I hhs and C+S from Set II hhs, av.(Y) was 40% less than av.(C+S). These differences were very clearly significant. Urban sector (both U-NM and M) Here Y and C+S were nearly equal and the small differences were not significant. 26-28th March, 2012- Beijing, China

  20. Results of pilot survey: savings ratio • Overall ratio S/(C+S): R: 16-17% U-NM: 10% M: 15% considerable doubt on the data on savings collected in the survey, especially from the non-metropolis urban sector. • The savings ratios S/Y and S/(C+S) were negative, if not zero, for the poorest households in all three sectors. • there was concentration of savings in the upper per capita income brackets. 26-28th March, 2012- Beijing, China

  21. Assessment of the pilot survey • The design of schedules of enquiry could be improved. • Informants tended to report large liabilities incurred (especially loans taken) without reporting the asset formation that would be expected to have taken place in the same period. • More alertness was needed in fieldwork to detect such under-reporting. • it also revealed the problems of respondent resistance • These have noticed over time • Pilot survey suggested that further full-scale pilot surveys were needed for arriving at a satisfactory methodology for household income surveys. • However, no further surveys on income have been conducted since then. 26-28th March, 2012- Beijing, China

  22. Thank Youvisit us at:www.mospi.gov.in 26-28th March, 2012- Beijing, China

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