REGIONAL ACCOUNTS Ilham Malkaoui

Overview presentation Regions Users Concepts Methods / sources

Regions NUTS: Nomenclature des Unités Territoriales Statistiques level 1 to 3: ‘regions’ former NUTS levels 4 and 5: LAU 1 and 2 (Local Administrative Units) Since 2003 NUTS regulation

the Netherlands

the Netherlands NUTS 1 4 regions

the Netherlands NUTS 2 12 provinces

the Netherlands NUTS 3 40 regions

Users of Regional Accounts national government local / regional government universities research companies Eurostat / European Committee

Policy European Union Treaty of Rome (article 158): In order to its overall harmonious development, the Community shall develop and pursue its actions leading to the strengthening of its economic and social cohesion. In particular the Community shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions or islands, including rural areas.

Flevoland

Structural Funds, 2007-2013

Gross Domestic Product per Region As Gross Domestic Product for a country (GDP) Production process (creating value added) and employment associated with it Regional production ≠ Regional income

Extraction of gas and oil in Groningen Economic growth

Basic concepts in regional accounting Sum Regions = National figure Same basic concepts as in National Accounts: resident units (residency principle and units) transactions (flows and balancing items) accounts sectors If possible, the same statistical sources ESA 2010: European System of National and Regional Accounts (chap.13)

Some specific regional concepts Territory: Extra-region Units/transactions: Multi-regional units

Extra-region For activities in the economic territory of a country but not in one of its regions: Embassies abroad Exploration and exploitation of oil and gas on the continental shelf

Extra-region For activities in the economic territory of a country but not in one of its regions: Embassies abroad Exploration and exploitation of oil and gas on the continental shelf Sum regions + Extra-region = National figure

Multi-regional units Statistical units, mostly: Kind of Activity Unit (KAU) Consists of one or more Local Kind of Activity Units (Local KAU)

Albert Heijn

Multi-regional units a. KAU = 1 Local KAU b. KAU = 2 Local KAUs in 1 region c. KAU = 2 Local KAUs in 2 regions Pay attention: Industry code local KAU = Industry code KAU

Some practical problems Construction industry Company region A region B Building site Railways / pipeline company region A region B region C

Sources Total national accounts (SUT + labour) SBS employment Other available sources

Methods to compile Regional Accounts production income (expenditure) Depending on availability of regional information: bottom up mixed method top down

Regional ‘income’ concepts balancing items Gross Domestic Product per Region Primary Income per Region Disposable Income per Region

Primary Income per Region As National Income Compiled according to the resident region of the employee compensation of employees property income (interest, dividends) Mixed income

Disposable Income per Region As Disposable Income for country Appropriate for ‘standard of living’ particularly Regional. Takes also income transfers into account

Restrictions Regional Accounts Gross domestic product per region for the total economy and for the sector households Primary and disposable income Comments (possible Regional impact) -Price level -Moonlighting not explicitly taken into account

Thank you for your attention! Regional Accounts Thank you for your attention!