National Income Statistics Research Articles

Universal concepts and national realities: the organisation of the ISI and the implementation of national income statistics in Germany

ABSTRACT Struggles over the degree of the scientific autonomy of statistics led to the demise of one of the first international scientific congresses in European history. But in the 1880s, only a decade after the collapse of that congress, the International Statistical Institute (ISI) was founded as its immediate successor to overcome the nationalist disputes that hindered the idealistic visions of a universal science breakthrough. The connection between universal scientific concepts and state reform processes is examined by the case study of the implementation of national income statistics according to internationally comparable standards in the German Reich. Thereby, the organizational history of the ISI, the role models of the participants and national realities are set in relation. The article argues that the semi-official character of international statistics implies a tension between scientific autonomy and dependence on national administrations. Equally, it offers the possibility of promoting national reform processes with reference to international integration, as the institutional responsibility for the German national income calculation in the 1930s demonstrates.

Personal Income Tax Revenue and Nigeria's Aggregate Earnings

The contribution of personal income tax to gross national income is assessed in this study. Over the years, tax revenue has been an important government source of income to finance public goods and services. In Nigeria, the tax structure includes personal income tax (PIT) as well as other direct and indirect taxes. There is PIT collection by both the state and federal governments. This study examines the influence of PIT on aggregate income of the country from 2011 to 2020 using ordinary least squares method. The dependent variable is the gross national earnings while the independent variable is the personal income tax collected at the federal government level in Nigeria. The study finds corruption and inflation as two useful control variables that have direct influence and link with individuals' tax compliance in Nigeria. The data sources include the Organization for Economic Co-operation and Development (OECD) for PIT figures, Transparency International (TI) for Corruption Perceptions Index (CPI) data and World Bank Economic Indicators for Gross National Income (GNI) and inflation statistics. The empirical findings reveal that PIT has a significant positive influence on the gross national income. The moderating variables applied are not significant and could not explain the vicissitudes in the gross national earnings. The study recommends improvement in the PIT administration to boost tax revenue collections and remittances to the government treasury. Further suggestion by this study is that corruption and inflation should be minimized to enhance PIT collection at both federal and state government levels.

Economic Valuation of Female Family Labour in Agriculture and Animal Husbandry: A Study in a Prosperous Agricultural Region

The present paper seeks to examine the economic contribution of women of cultivating households in agriculture and allied activities in an agriculturally prosperous region. The paper quantifies the labour time spent by household women in activities related to farming and animal husbandry. It also seeks to measure the economic contribution of women in the household income in monetary terms. The study is based on primary data collected through a survey of 240 farm households belonging to Muzaffarnagar and Baghpat districts located in agriculturally developed western Uttar Pradesh (UP). The study reveals that household women contribute about 20 per cent of agricultural income and 61 per cent of animal husbandry income in farm households. The contribution of female workers in family income was significant in all the farm size categories, though the share of women in family income was found to be negatively correlated with farm size. The study clearly shows that women household members contribute a significant amount of family labour and income in the farm households. It is, therefore, important that these women are treated as workers and their contribution is duly accounted for in national income statistics. Government agencies working in the field of agricultural development should focus on women workers as a special category. They should be provided proper training in agriculture and animal husbandry to improve their efficiency and knowledge. Steps need to be taken to ensure access of rural women to agricultural and livestock extension services and other support mechanisms.

Modeling, Statistics and Political Circumstances

AbstractThe notion of “economic development” dominates aid policy. A nation’s per capita Gross Domestic Product (gdp) determines whether that country is considered developed or less developed, and the standard measure of any developmental progress isgdpgrowth. This article investigates the evolution of the concept of economic development, as it emerged from a specific combination of modeling, statistics and political circumstances. In this story, Arthur Lewis played a decisive role, but only by building upon Colin Clark’s first global national income statistics, an indispensible foundation for Lewis’s seminal model of economic development. This model was embraced by policy makers longing for a theoretical framework to clarify and operationalize the hitherto vague concept of development. More importantly, however, the statistical indicator on which Lewis based his theory had already been universally accepted. In other words: statistics came before theory. This holds important lessons for alternative development ideas. It explains why the idea of economic development remains so firmly entrenched and suggests the conditions that might be necessary for an alternative theory to take hold.

William W. Cooper: Innovator, Fighter, and Scholar

W illiam Wager Cooper was born on July 23, 1914 in Birmingham, Alabama, where his father was a bookkeeper and later a distributor for Anheuser-Busch. Bill’s family moved to Chicago when he was three years old. His father owned a chain of gasoline stations, but lost them during the Great Depression. With his father in ill health and no family revenue, Bill left high school after his sophomore year to work at whatever jobs he could find. These included spotting pins in bowling alleys, caddying at golf courses, and even professional boxing, where his record was 58 wins, 3 losses, and 2 draws. While hitchhiking to the golf course one day, Bill met Eric L. Kohler, a principal with Arthur Andersen & Co., who became his life-long mentor. Kohler loaned him money to enroll as a non-degree student at The University of Chicago. Bill liked the academic atmosphere and took the college entrance examinations, intending to become a physical chemist. During his studies, Kohler asked him to review the mathematics used in a patent infringement suit. After Cooper found errors in the mathematics used by the plaintiff’s engineers, Andersen hired him part time during the school year and full time in the summer. This awakened Cooper’s interest in accounting, and he switched his major to economics. While at Chicago, Bill became good friends with a political science student, Herbert A. Simon. Cooper graduated Phi Beta Kappa with his A.B. in 1938.

Korean National Income Based on a Chain Index: 1953~2010

Korea’s national income statistics have been compiled by the Bank of Korea since 1953. However, there is a break in the time series. The current time series (1970 onward) is based on the ‘1993 SNA (System of National Accounts)’ suggested by the UN, and the previous time series (1953~1970) was based on the ‘1953 SNA’. The difference between the previous and current time series is 4.8% in 1970 when the two series overlap. The difference is even greater in terms of comparisons across industries. In addition, it has now become even more difficult to connect the current and the previous time series because, in 2009, the Bank of Korea introduced a chain weighted method for calculating the current time series (1970 onward). Under the chain weighted method, the time series underwent substantial modification; for instance, the economic growth rate during 1970~2005 is 0.9%p higher than the rate under the general method. This paper applies chain weighted values and the ‘1993 SNA’ to the previous time series (1953~1970) by utilizing various national account manuals published by the UN and previous Korean input-output tables in order to calculate a long term time series from 1953 to 2010 based on the same criteria as the current time series (1970 onward). In the revised time series, it appears that 1953 GDP at current basic prices is 3.5% higher and the growth rate for the period of 1953~1970 is 1.5%p higher each year than under the previous time series. Under the revised time series the size of the Korean economy as of 2010 is 50-fold bigger than that of 1953. In terms of industries, manufacturing and SOC show significant expansion whereas the extent of that of the service industry is relatively small.

We Are What We Measure

We Are What We Measure

Constructing a social accounting matrix for Libya

The lack of coherent time series data for Libya is a serious obstacle for applied research on its economy. An alternative to econometric analysis is to use a social accounting matrix (SAM) in conjunction with an appropriately specified computable general equilibrium (CGE) model to address policy questions. We constructed a SAM for Libya for the year 2000, which integrates national income, input-output, flow-of-funds and foreign trade statistics into a comprehensive and consistent matrix. First, a macro-SAM was constructed to capture the macroeconomic framework of the economy. The macro-SAM was then disaggregated into a micro-SAM incorporating the accounts for activities, factors of production and main economic institutions (households, government and the rest of the world). Finally, the micro-SAM was balanced using a cross-entropy procedure in a general algebraic modelling system (GAMS). This matrix facilitates the numerical calibration of large analytical models to provide a suitable vehicle for policy experiments.

The Poverty of Statistics and the Statistics of Poverty

This paper offers a critique of the picture of world growth and world inequality generally disseminated by international agencies. The positive view commonly presented depends on the widespread consensus that economic performance should be measured using ‘Purchasing Power Parity’ (PPP) statistics, instead of market exchange rates. Although originally conceived narrowly as a basis for comparing living standards, PPP indicators are now indiscriminately promoted as an unexceptionable standard for comparing and aggregating national income statistics. This article highlights the flaws in the PPP approach by accepting the claims made on their behalf at face value. It shows that, even on the basis of these claims, the wrong conclusions have been drawn. By comparing PPP and market exchange rate measures of inequality it shows that what really took place, at the end of the last century, was a systematic reduction in the prices of consumption goods in the Third World. PPP statistics have concealed this underlying and unsustainable trend, allowing it to be packaged as a stable reduction in poverty. Neither genuine growth, nor lasting poverty reduction was achieved over this period. The fall in the price of consumer goods masked a systematic failure to overcome the central problem of development—the high price of capital goods, which PPP statistics understate, and of intermediate goods, which they completely omit.

Informal but Not Insignificant: Unregistered Workers in North Cyprus

The size of the informal labour force and its contribution to the national income of North Cyprus has been an issue of considerable controversy and political significance. Because of the relatively free movement of labour between Turkey and North Cyprus, a significant body of unregistered workers have accumulated in North Cyprus. This study carries out an estimate of both the size of the informal labour force as well as its contribution to GNP for the period from 1996 to 2000. This study has been made possible due to three rich data sets available for this period that address different aspects of this issue. These data sets are the population census of 1996, the household income and consumption survey of 1998, and the records of the immigration department up to the year 2000: The size of the informal labour market is estimated through the use of the national census, and also by constructing an inventory of unregistered immigrant workers through the records of the immigration department. Similar estimates are obtained for the number of people working in the informal sector using either approach. The findings are that the informal employment is between 35 to 40 percent of the total labour force. Because not all the informal sectors production is excluded from the official national income statistics, the understatement of the official statistics is estimated to be between 12 to 17 percent of GNP. In addition to the correction of the national income statistics, the fiscal losses are estimated to be about 9 percent of total tax revenues and a loss of social security revenues is approximately 38 percent of the total annual contributions.

System of Nation Accounting in Nepal

National accounting or social accounting is an important concept in an economy. It is, on one side, a tool for the analysis of the trend of the economy and on the other side it is a goal also. Every economy tries to increase and redistribute the national income. The regular and scientific estimation of national income (NI) was started in Nepal since 1974. The process of the calculation of GDP is quite a long and complicated process. A brief discussion of the process of GDP estimation along with NI statistics of Nepal from the beginning is given in this paper. Economic Journal of Nepal Vol.28(3) 2005 pp.178-187

Spurious Growth in German Output Data, 1913-1938

A substantial body of research agrees that unit wage cost in the industrialized economies increased substantially after World War I. For Germany, the popular industrial output estimates of Hoffmann (1965) are partly based on the assumption of constant wage shares, and show rather high growth of the German inter-war economy relative to 1913. This Paper constructs alternative estimates for the affected metal-working sectors, and finds far lower output levels and growth. The change is strong enough to remove the growth bias also from Hoffmann's figures of overall industry and the aggregate economy. After correcting for spurious growth in metal-processing industry, Hoffmann's output estimates are broadly in line with the contemporary output and national income statistics.

Inclusion of Environmental Goods in National Income Accounting

National income statistics take into account the values of market goods and completely ignore the environmental goods. The purpose of this paper is to suggest the integration of environmental goods into the framework of Leontiefs input–output analysis. It is suggested that environmental goods, such as clean air, fresh water, quiet, etc., be treated as sectors in the same way as market goods sectors. The final deliveries of the sectors may be positive, zero or negative, depending on the scarcity of the environ mental goods and political decisions. The paper gives a numerical illustration of how the environmental goods can be valued from an input–output analysis. It is recommended that a system should be devised to adjust the national income estimators of individual countries for the changes in the environmental goods caused by the economic activities of these countries.

China's regional inequality, 1952–1985

This paper explores the change in regional inequality in the People's Republic of China from 1952 to 1985 with the help of a set of newly published provincial national income statistics. The new empirical evidence suggests that interprovincial income gaps did not narrow between 1952 and 1985. There seems to be a positive relationship between fiscal decentralization and regional inequality.

A further note on foreign trade and national income statistics in the Soviet Union

A further note on foreign trade and national income statistics in the Soviet Union

Foreign trade and national income statistics in the Soviet Union: A comment

Foreign trade and national income statistics in the Soviet Union: A comment

Measuring the transformation of the european economies: income, health and welfare

The measurement of national income has added greatly to our understanding of economic and social change in Europe over the past hundred years. But national income analysis does not take full account of changes in welfare and particularly of the causes and effects of long-term changes in the health of the European populations. The paper surveys methods which have been used to adjust national income estimates and shows that they can be supplemented, if not replaced, by measures of growth in human physical height as an indicator of changes in the nutritional status of national populations, of the peoples of particular areas and of social classes. National income analysis is central to our present knowledge of the trans formation of the European economies. By their painstaking work, a generation of scholars such as Bairoch, Feinstein and Hoffmann have delineated that transformation as it appears in the national accounts which they have com piled; they have enormously facilitated comparisons between the national economies as well as the description and analysis of changes within those economies (Bairoch 1976; Feinstein 1972; Hoffmann 1965 and survey in Crafts 1983). As a result of their work, economic historians in western Europe turn naturally to such concepts as gross domestic product per capita, factor shares of labour or capital and growth rates of gross national product and use them as basic building blocks in their endeavour to describe and analyse the European economies and the relations between them. It is in the nature of scholarship, however, that the work of one generation should be questioned by the next. Just as the great compilations of his torical national income statistics are completed and used in such works as British Economic Growth 1856-1973, by Matthews, Feinstein and Odling-Smee (1982), so questions are raised about the suitability of the national income framework for the analysis of economic development in the long-run. Doubts are expressed about the assumptions concerning the structure and workings of economies which underlie this mode of analysis, about the irrelevance of national frontiers to many of the processes of economic growth and, most fundamentally, about the significance of national income itself, either as a measure of production or as a measure of welfare.

Depreciation Expense and the Effect of Inflation

A recent study by Skinner [1982] of United Kingdom depreciation accounting raised the question of whether it is necessary to adjust period depreciation expense to reflect the effect of inflation on firms that use equipment acquired at lower price levels in the past. Skinner compared capital consumption allowances at replacement cost as reported in United Kingdom National Income Statistics with depreciation reported in corporate financial statements. The ratio of fixed asset book values to book depreciation, compared to the ratio of fixed assets at replacement cost to capital consumption allowances, confirmed that British companies seriously underestimated the economic lives of their fixed assets. This meant that annual depreciation reported was roughly the same as if replacement cost had been used with realistic estimates of useful lives. The evidence suggested economic lives were twice as long as useful lives, and that this was not attributable to income tax regulations or attempts to allow for the effects of inflation. This paper reports on an investigation of whether United States corporations underestimate the useful lives of their assets, thereby leading to the same result. Because of the special features of the calculation of depreciation by the United States statisticians, however, I took a more direct approach to this problem by asking firms to provide estimates of the useful lives of their assets. On the basis of their responses, and in the light of recently published United States statistics on the lives of capital stocks in this country, I calculated economic depreciation for a randomly selected group of SFAS No. 33 companies, and compared it with historical cost, constant dollar, and current cost depreciation. The results of my experiment suggest that Skinner's conclusions regarding

The North-South Income Gap: A Demographic Perspective

Picture the map of the world as popularized by the cover of the recent report of the Brandt Commission on international development issues. A line is drawn on the map that, following it from west to east, runs along the southern borders and shores of the United States, Europe, the Soviet Union, and Japan. The line then swings down to enclose the continent of Australia along with New Zealand into a tenuous geographic brotherhood with the globe's upper tier. and as defined by this line are of course synonymous with the familiar collective categories that for the last 25 years or so have been known as the and the developing countries. The change in terminology is felicitous. While it does take some effort to think, say, of the Koreas or of Mongolia as South, such mental gymnastics dispense with awkward euphemisms such as referring to the countries of the Sahel as developing. It is also easier to call New Zealand part of the North than, for instance, to call Albania a developed country. At the very least, economy of expression favors the geographic labels. Whatever the labels, the main justification for making such a cavalier distinction between two broad groups of the world's countries is that North and South represent enormous differences in economic wealth and power. I will illustrate the point by reference to some conventional statistics. World gross national product in 1978 (the last year for which detailed estimates are available) was some US$8.5 trillion. The use of national income statistics either for calculating aggregates of this sort or for making international comparisons, of course, does raise serious problems of concept and measurement. Later I will comment on these problems briefly, but for the time being I will take such statistics at their face value or, at least, as rough indicators of orders of magnitude. World population, now past the 4.4 billion mark, was somewhat over 4.2 billion in 1978. In terms of annual per capita income, these figures translate into an overall world average of just over $2,000.

Book Reviews

book reviewed in this articleBIRD, G. The International Monetary System and the Less Developed Countries.BOWERS, J. K. (ed.). Inflation, Development and Integration ‐ Essays in Honour of A. J. Brown.HARVEY, C. Macroeconomics for Africa (Studies in the Economics of Africa).MORGENSTERN, O. National Income Statistics: A Critique of Macro‐economic Aggregation.RAY, G. F. and UHLMAN, L. The Innovation Process in the Energy Industries. London:ROSTOW, W. W. The World Economy ‐ History and Prospect.WHISTON, T. (ed.). The Uses and Abuses of Forecasting.YAMAMOTO, H. Development Structure of Agricultural Mechanization in China (I.D.E. Special Paper No. 12). Tokyo