Land and Natural Resources AEG New York, April 2012 Contact:

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

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.

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

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.

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

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

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)

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)

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

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?