1. Satellite accounts
THE CONTRACTOR IS ACTING UNDER A FRAMEWORK CONTRACT CONCLUDED WITH THE COMMISSION

2. What are satellite accounts?
They are extensions of the central system of national accounts, which is taken to be
1. institutional sector accounts
2. the supply-use framework
3. Bridge tables linking supply-use to sectors
4. Tables on expenditure by function
5. Tables on population and employment

3. What are satellite accounts?
Satellite accounts involve a re-arrangement and expansion of central system classifications
They often focus on functional themes (e.g. environment) rather than industry and products
They can involve a change in concept e.g. where the production boundary lies, extension of scope of assets

4. What do they offer?
Satellite accounts enable a particular aspect of economic and/or social life to be high-lighted in the terms of national accounts
The national accounts framework enables difficult issues to be described in a formal manner:
How important is tourism to our economy?
How would our picture of the economy change if human knowledge was taken as a capital asset?

5. Advantages of satellite accounts
They are based on a clear set of definitions
They follow the systematic accounting approach of the SNA/ESA
So they are internally consistent, and coherent
They benefit from national accounts statistics, their well-defined conceptual basis and their international comparability

6. Examples Agriculture Labour Social protection Tourism Informal sector
Non-profit institutions
Tax revenues

7. Examples Environmental Health Household production
Productivity and growth
R & D
Supplementary pensions table

8. Common practice
Usually the supply-use tables play a key part in satellite accounts
The detail of industries and product, and how they are supplied and consumed, gives a starting point for addressing issues such as
What do we mean by tourism? How important is it ? Who benefits from it?

9. Common practice
Which industries and products and functional use categories reflect the economic effect of tourism?
Which industries, products, and functional categories need to be expanded to enable tourism to be separately identified?
What extra information on industry inputs would help? – employment, capital assets?

10. Supply for key industries/products
ESA 2010 Table 22.5

11. Supply table for tourism
Key Ind 1
Key ind 2
Total
Other ind’s
Imp-orts
Total supply
Key prod’s 1
Key prod’s 2
Other prod’s

12. Use table for tourism (part 1)
Key Ind 1
Key Ind 2
Total
Other Ind’s
Key prod’s 1
Key prod’s 2
Other prod’s
CoE
Other taxes
Cons of cap
Op. surplus
Other

13. Use table for tourism (part 2)
Final Consumption
Cap. form
Exp-orts
Total
HFCE
GFCE
NPISH
Key prod 1
Key prod 2
Others

14. Agriculture Economic Accounts for Agriculture
Production account, generation oif mincome account, entrepreneurial income account, capital account for agriculture
Detail of supply and use of products, plus non-agricultural secondary activities such as B&B, camping sites, etc.

15. Environmental accounts
There are international guidelines on environmental accounts: System of Environmental Accounting SEEA, 2003)
The accounts show the contribution of the environment to the economy, and the effect on the environment of economic activity
Key – shows depletion of natural resources (a free good), and the degradation of the environment

16. Environment accounts
Show the use of products including natural resources and the physical volume of by-products harmful to the environment
Transforms the supply and use framework into physical flows so that demand categories can be sen to generate harmful side-effects

17. Health accounts OECD A System of Health Accounts
It answers the questions:
What is used to produce health care?
Who supplies these inputs?
What are the sources of funding?

18. Health care Health care goods and services are split into many types
The headings of the supply-use table are expanded and extra data used to extend the framework

19. Household production
ESA/SNA recognises household creation of goods which could be marketed, as production
ESA does not recognise unpaid services carried out by household members, nor volunteer services, as production

20. Household production
The aim of the satellite account is to recognise and value the unpaid for services provided within a household, to provide a complete picture of production, and to show how income, consumption and saving is altered by type of household
The services to be recognised are only those which can be provided for another user

21. Household production
Sources are household budget surveys, time-use studies – both with limited sample size usually
Functional headings such as caring for children can be spread across COICOP headings to link to national accounts
Spending on durable goods such as furniture is recorded as capital formation, and an associated capital consumption profile must be estimated.

22. Household production
Household services can be valued at market prices of equivalent products
Or a cost approach requires an estimate of the compensation of employees for such work
As usual, these constructs are set up in a supply use framework so that estimates of output, uses and income are all generated in a consistent manner

23. Productivity and Growth accounts
Productivity change is seen as a driver of increased living standards in an economy
It is widely used by analysts and policy makers to judge the “success” of economic policy
It is necessary to measure the role of capital assets in promoting growth, to establish useful measures of productivity

24. Productivity
The national accounts use table is the starting point for productivity analysis.
Value added is broken down into components, including labour inputs in volume terms, and the contribution of the use of capital assets in the industry
The use of assets (capital services) must be estimated using model assumptions on the degradation and life of different classes of assets

25. KLEMS
KLEMS growth and productivity accounts have been developed world-wide.
K – Capital
L – Labour
E – Energy
M – Materials
S - Services

26. KLEMS
Supply-use tables provide the core national accounts structure for the KLEMS accounts
Additional information needed is
Volume information on labour underlying CoE
Estimating the use of capital assets (capital services) from modelling degradation of capital stock

27. Research and development
ESA 2010 says treating R&D as current expenditure benefitting production for the current period only is not consistent with the nature of R&D which provides future benefits over a considerable period of time.
After testing, R&D is now recognised as capital formation, although at present is valued through a sum of costs approach.

28. R&D
However, the recognition of R&D as an asset does not in itself answer the many questions posed, given its key role in determining future prosperity
So we still need R&D satellite accounts, to address questions such as

29. R&D Who performs R&D Who finances R&D Where is R&D used?
How important is R&D compared to other assets?

30. R&D
As usual the supply-use framework is the starting point for building the satellite account
Having established the supply and use of R&D by type and industry, the capital services supplied must be calculated to determine the relative effectiveness in promoting growth, compared to other growth drivers.

31. Social protection
Social protection in national accounts terms is provided by the benefits transferred to households to meet their risks and needs.
So benefits such as social security payments (government old age pensions), other pensions earned through work, free health care from the government, health insurance schemes from business,

32. Social protection
The European System of integrated Social Protection Statistics (ESSPROS) (Eurostat, 2008)
The accounts give the size and composition of social protection benefits, their financing and administrative costs

33. Social Protection
The benefits are classified by purpose (old age, sickness, etc.), delivered through cash or in kind, means-tested, government-controlled or private, basic or supplementary.
Information is available on revenue and expenditure
The concepts are closely linked to ESA/SNA

34. Tourism satellite accounts
They provide information on the supply and use of goods and services for various types of tourism and their impoRtance for domestic employment, balance of payments, government finance and the household and business sectors

35. EXERCISE (TSA)