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Measurement of Land and Natural Resources: International Survey and Valuation Methods

This document discusses the importance of measuring land for environmental accounting, GDP, and growth accounting. The need for robust estimates has heightened due to the financial crisis and gaps in information regarding household wealth. Survey results from various countries regarding balance sheets, sectors, and land types are presented, along with valuation methods and sectoral accounts by land type. The document also covers dealing with volume changes, government-owned land, and requests for further work on measuring land under dwellings and valuation guidelines. Next steps include the OECD-Eurostat Task Force on non-financial assets and issues for the AEG to consider.

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Measurement of Land and Natural Resources: International Survey and Valuation Methods

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  1. Land and Natural Resources AEG New York, April 2012 Contact: nadim.ahmad@oecd.org

  2. Background • Not the first time that the measurement of land has caused concern • Discussed on numerous occasions in previous WP meetings. • And land has always been important • Environmental accounting • GDP (via user cost approach for imputed rent) • Growth accounting • But the need for robust estimates has heightened: • Financial crisis information gaps (G20 Recommendation 15) • Focus on household wealth • Produced land in the 2008 SNA • Re-emphasised at • 2010 WPs on Financial Statistics and National Accounts 2010 • CSTAT 2011

  3. Survey Results – Balance sheets • 23 countries responded • 5 (Cze, Fin, Fra, Jpn, Mex) produce full balance sheets by detailed land type • Land underlying buildings • Land under cultivation • Recreational land and associated surface water • Other land and associated surface water • 5 produce partial info (Can, Ita, Kor, Nld, Swe) • Many others have plans to do so. • Appears to be inconsistent treatment of produced land in balance sheets – some countries include it under land, others under other fixed assets.

  4. Survey Results – Produced land • 1 country covers all land categories (Svn) • 10 cover parts (Can, Fin, Fra, Isr, Ita, Nld, ior, Pol, Prt, and Swe). Valuation: • Investment • Survey - Can, Cze, Fra, Nld, Pol,Prt • Commodity Flow – Jpn • Input costs - Swe • Balance sheets • PIM: Can (linear depreciation), Cze, Fra, Nld • Values – Jpn, Pol

  5. Survey Results – Sectors • Balance sheet • Full split by land-type/sector: • Can, Cze, Fra, Ita, Nld produce detailed split. • Partial (total land) by sector: • Jpn, Kor, and Swe • Investment • Full sectoral accounts by land type in Slv • Partial in Can, Fra, Mex, Nld, Pol and Prt.

  6. Land under buildings - methods • Ratios: • Can, Fra, Ita (part), Prt, Svn (owner-occ) • Direct price information • Cze, Jpn • Indirect • (total value minus depreciated building costs) – Ita (part), Nld, Svn (market dwellings), Swe • NPV approach, Mex, Nld (part non-res) • Chi does not include value of land under buildings and structures

  7. Land owned by government • Should be included: • Can, Cze, Dnk, Fin, Fra, Ita, Jpn, Kor, Swe. • Should not be included: • Nld

  8. Dealing with volume changes Revaluation vs OCV • OCV • Cze, Dnk, Fra, Nld, Swe, Kor (for reclassifications) • Revaluations – • Jpn, Mex, Prt, Swe (when the surrounding land changes)

  9. Requests for further work • Measuring land under dwellings • Residual method implies all holding gains/losses end up in land. Correct? • Further guidance requested for BS estimation • Identifying and valuing land owned by government • Guidelines for OVC changes not driven by reclassification? • Timing of OVC/Revaluation changes, who benefits? • Suitability of fiscal data as a market price proxy • Extending the production accounts to re-route rent of land to intermediate consumption (for productivity)

  10. Next steps • OECD-Eurostat Task Force on non-financial assets (focussing on land and dwellings) • 1st meeting June-July 2012

  11. Issues for the AEG • Agree with the need for further guidance? • Views on current practices • Should the use of fixed ratios be explicitly discouraged? • Which sub-categories of land should be stressed? • Measuring quality changes? • New category of rents from land (payable and receivable) in PI? • Other areas/issues?

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