1. Price and volume measures for government output
Overview of EU legal requirements
26-27 May 2005

2. General background
Harmonisation of GDP growth figures became a priority in > intensive work program
ESA95 rules considered not to be sufficient to ensure comparable figures
Commission Decision 98/715 defined various important issues such as chaining
Research program was set up involving all Member States
Non-market services crucial element in view of importance for GDP
26-27 May 2005

3. Work on non-market output
Four Task Forces between 1998 and 2000 (2 on health, 1 on education and 1 on public administration)
Many discussions in NAWG leading up to Price&Volume Handbook, published in December 2001
After publication of Handbook, many countries received Eurostat grants for its implementation, in particular on non-market
26-27 May 2005

4. A, B and C methods A methods: ideal B methods: acceptable alternatives
C methods: unacceptable
26-27 May 2005

5. Available methods for measuring the volume of non-market output
Input methods
Deflation with input price indices
Extrapolation with input volume indices
Productivity adjustments
Volume indicators
Activity
Output
Outcome
26-27 May 2005

6. Input, activity, output and outcome
Inputs: what is used to produce outputs; eg number of doctors and nurses
Activity: what is done with the inputs; eg number of operations in hospitals
Outputs: what is produced with the inputs and consumed by users; eg number of treatments
Outcome: effect of the output; eg change in life expectancy
26-27 May 2005

7. Criteria for appropriate use of output indicators
Full coverage of services provided to external users
Cost-weighted
Defined as detailed as possible
Quality adjusted
26-27 May 2005

8. Quality changes Three approaches: Direct measurement of quality
Measuring the quality of inputs
Using outcomes
26-27 May 2005

9. A, B and C methods for individual services:
A methods: output indicators satisfying all four criteria
B methods: output indicators not satisfying all four criteria
C methods:
input methods
volume indicators relating to inputs, activities or outcome (unless outcome = quality-adjusted output)
non-representative output indicators
26-27 May 2005

10. A, B and C methods for collective services
Basically the same as for individual services, with two exceptions (because of difficulties in defining output):
Input methods are B, provided:
Each input separately deflated
Inputs quality adjusted
NO productivity adjustments
Activity indicators are B
26-27 May 2005

11. Commission Decision 2002/990
For individual non-market services: input methods are banned from 2006
For collective non-market services: input methods need to be improved to comply with the above criteria
Eurostat is now checking the “Price and Volume Inventories” of Member States to assess compliance
26-27 May 2005