Tuesday 7 th April Dr Soo Jung Ha and Janine De Fence (ESRC Climate Change Fellowship Grant ref: RES ) March/April 2009

Transcription

1 A Social Accounting Matrix for the UK and Scotland- the Construction of the I-E Account Presented to the Welsh Economic Research Unit, Cardiff Business School Tuesday 7 th April 2009 Dr Soo Jung Ha and Janine De Fence (ESRC Climate Change Fellowship Grant ref: RES )

2 Why we need a Social Accounting Matrix (SAM) To meet the objectives in set out in the ESRC climate change fellowship As one of the four data requirements for the construction of a computable general equilibrium model.

3 What is a Social Accounting Matrix (SAM) Similar to the Input Output Table but includes additional information about an economies flows of income and expenditure Total Income (receipts)= total Expenditure Single Entry Book keeping Construct an Income- Expenditure account to for the additional data requirements and so the SAM will automatically balance.

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5 The Income Expenditure Accounts Constructed to meet the additional data requirements for the SAM Each account is created for the five main transactor groups in an economy Households Governments Corporations Capital External Sector (RUK, REU, ROW)

6 Template For Constructing Income-Expenditure Accounts Income Expenditure Income from employment (H)* IO final demand expenditure Income from OVA* (incl expend taxes)* Net commodity taxes (G)* Payments from corporations** Payments to corporations ** Payments from government** Payments to government** Payments from households** Payments to households** Transfers from UK** Transfers to UK** Transfers from REU** Transfers to REU** Transfers from ROW** Transfers to ROW** Payments to capital (savings)*** Source- Chapter 5 Dr Turner PHD Thesis

7 Income-Expenditure Accounts for the UK provisional unbalanced million Households Households Income 1,102,360 Expenditure 1,112,061 Income from employment 655,673 IO expenditure 553,490 Profit income (OVA) 72,709 Payments to corporations 251,977 Income from corporations 243,495 Payments to government 220,459 Income from government 101,004 Payments to capital 41,146 Transfers from ROW 29,478 Payments to ROW 44, Total Household Income (Balancing Total) 1,112,061 BB total UK exp(balancing total) 1,112,061 Unallocated 9,701 Corporations Corporations Income 770,312 Expenditure 388,231 Profit income (OVA) 334,382 Payments to households 243,495 Income from households 251,977 Payments to government 66,271 Income from government 68,112 Transfers to ROW 48,371 Income from ROW 115,841 Payments to capital (savings) 30,094 Government Government Income 330,066 Expenditure 445,917 Profit income (OVA) 25,837 IO expenditure 249,916 Net commodity taxes 17,499 Payments to corporations 68,112 Income from households 220,459 Payments to households 101,004 Income from corporations 66,271 Payments to capital (savings) 25,837 Total Govt Income Balancing Total 445,917 Payments to ROW 1,048 Excess -115,852 Total Govt Exp (Balancing Total) 445,917 Capital Capital Income -6,959 Expenditure 145,829 Households 41,146 IO expenditure 145,829 Corporate 30,094 Govt 25,837 ROW -104,037 External Income External Expenditure ROW income from UK ROW expenditure in UK Goods & Services (imports to UK) 186,812 Goods & Services (exports from UK) 265,301 Transfers 116,653 Transfers 142,201 Total income 303,465 Total expenditure 407,502 Surplus/deficit -104,037

8 The Household Account Fixed Entries Income from Employment The sum of compensation of employment row in the Input Output table Final Demand Expenditure by Households - The column total for household expenditure/demand in the Input Output table

9 The Household Income Account : Profit Income (OVA) Income to households not earned through wages UK The Blue Book National Accounts Table code name QWLS - Scotland Previously taken from HH Gross Operating Surplus in SES ONS provides HH disposable income by NUTS regions and different disaggregated components (such as operating surplus and mixed income are aggregated) Use the ratios from 1999 HH accounts

10 Total gross disposable income (from HIA) B.2/B.3 Operating Surplus/Mixed Income D.1 Compensation of employees D.4 Property Income (resources) D.4 Property income (uses) D61/D.62 Imputed social contributions/social benefits other than social benefits in kind D.7 Other current transfers HH profit income (previous components) Gross operating surplus Gross mixed income Compensation of employees Net property income (Property income from resource minus property income uses) All pensions Other social benefits Net other income

11 NUTS2:4 H eadline 1 gro ss d isposable h ousehold incom e (GD HI) 2,3 by N UT S2 area an d com po nent at current prices continued Sco tland C8FZ To tal B.2/B.3 Operating Surplus/Mixed Incom e D.1 Compensation of employees D.4 Property Incom e Primary resou rces total D.4 Property income Primary u ses total B.5g B alan ce of prim ary incom es, gross D61/D.62 Imputed social contributions/social benefits other than social benefits in kind D.7 Other cur rent transfers Secondary resources total D.5 Current taxes on income, wealth etc D.61/D.62 Social contributions/social benefits D7. Other cur rent transfers Secondary uses total Balance of secondary income B.6 Gross Disposable Incom e

12 The Household Income Account : Payments from Corporations 1. Dividend payments from companies going to households 2. Income generated from private pensions 3. Other mixed income

13 The Household Income Account : Payments from Corporations 1. Dividend payments from Scottish companies going to Scottish HH No information on Scottish receipts of dividends In 1999 Scottish SAM, use the UK data from Hill and Taylor (2001) Estimate 2004 UK one from Hill and Taylor(2001) data with its constant growth rate 17% Estimated total UK dividend payments by private companies Scottish GDP share total UK equity owned by HH in the UK Scottish POP share

14 The Household Income Account : Payments from Corporations 2. Income generated from private pension Previously taken from table 3.1 in SES but no longer updated Instead of social security, social protection category in GER and SES Estimated with the growth rate btw 1999 and 2000 Total Social security payments other social benefits= total public pensions All pensions-total public pensions = private pension

15 The Household Income Account : Payments from Corporations 3. Net Other Income Previously 50% of Net Other Income given in table 3.1 SES Now 50% of Net Other Income in the HIA

16 The Household Income Account : Payments from Government 1. Social security payments 2. Dividends from public corporations to Scottish HH 3. Net other income

17 The Household Income Account : Payments from Government 1. Social security payments Previously from table 4 of GERS Different disaggregated components in 2004 GERS (Social protection instead of social security payments) Estimated with the growth rate btw and (2.8%) Gov expenditure Social security social protection

18 The Household Income Account : Payments from Government 2. Dividends from public corporations to Scottish HH Similar way with the dividends in the income from corporation section Estimate 2004 UK one from Hill and Taylor(2001) data with its constant growth rate 2.3% Estimated total UK dividend payments by public companies Scottish GDP share total UK equity owned by HH in the UK Scottish POP share

19 The Household Income Account : Payments from Government 3. Net Other Income Previously 50% of Net Other Income given in table 3.1 SES Now 50% of Net Other Income in the HIA

20 The Household Income Account : Payments from the External Sector Transfer from ROW 1. Employment income UK Emp income from ROW (from BB) the ratio of wage income btw Scotland and UK 2. Property and entrepreneurial income UK property & entrepreneurial income from ROW (from BB) the Scottish share of UK OVA HH share of HH and Corporation OVA

21 The Household Income Account : Payments from the External Sector Transfer from RUK 1. Private dividends paid by RUK companies to Scottish HH UK total private dividends The Scottish share of total private dividends= Scotland share of UK GDP market price UK private dividends RUK private dividends RUK private dividends Total equity owned by individual Total by RUK to individual Total by RUK to individual POP share of Scotland Private dividends paid by RUK companies to Scottish HH 2. Transfers in wage income from RUK to Scotland Published value for total Scottish compensation of employees in the HIA minus IO wage income

22 The Household Expenditure Account 1. Payments to corporations The balancing item 2. Payments to government From GERS Payments to the external sector Payments to ROW = Payments from UK HH to ROW (BB 2006) the Scottish share of UK wage income Payments to RUK=(UK total compensation of employees minus Scottish compensation of employees) minus (UK income from employment in UK IO minus Scottish income from employment in Scottish IO)

23 The Government Account Directly from IO table Final demand expenditure by gov Net commodity tax income Income from other value added The sum of OVA from public sectors in the IO table (water, public administration, education, health and veterinary services, social work and sanitary services)

24 The Government Income Account 1. Payments from corporations the payments to gov in the corporate expenditure account 2. Payments from HH HH payments to gov in the HH expenditure account

25 The Government Expenditure Account 1. Payments to corporations A balancing entry 2. Payments to HH HH income from gov in the HH income account 3. Payments to RUK/ROW The non-identifiable expenditure (GER ) 4. Payments to capital (savings) OVA share (Gross domestic fixed capital formation minus net commodity and production taxes from IO) the sum of public sectors

26 The Corporate Income Account 1. OVA total OVA for all sectors (from IO) minus OVA in the gov and HH income account 2. Payments from gov Payments to corporation in the gov expenditure account 3. Payments from HH HH expenditure to corporation in the HH expenditure account

27 The Corporate Income Account 4. Transfers from RUK and ROW The same methodology for 1999 is used Scottish share of total UK property and entrepreneurial income from ROW the Scottish OVA share corporate share of total Scottish corporate and HH OVA Allocate each half to corporations income from ROW and RUK

28 The Corporate Expenditure Account 1. Payments to gov The payments from corporation in Gov income account 2. Payments to HH The payments from corporation in HH income account 3. Payments to RUK and ROW 50% of Scottish OVA 70 % to ROW and 30% to RUK 4. Payments to capital (savings) A balancing entry

29 The External Account Income Expenditure Goods & Services Imports in IO Table Goods & Services Exports in IO table Transfers Payments to external sector in HH, Corporations, Gov expenditure accounts Transfers Income from external sector In HH, corporations, and Gov income Accounts RUK/ROW Income from Scotland/UK RUK/ROW expenditure in Scotland/UK Goods & Services Imports from ROW in IO table Goods & Services Exports to ROW in IO table Transfers Payment to ROW in HH and corporation expenditure Accounts Transfers Income from ROW in HH and corporations income accounts

30 The Capital Account Income- Savings from Household, Government, Corporate and the External Accounts. Expenditures- Gross Fixed Capital Formation and Stock Building from the Input Output Table.

31 Concluding Remarks Data Sources The Blue Book 2006 GERS PESA 2005 ONS Regional Accounts Inland Revenue Web Page Input Output Table A Welsh Income Expenditure Account Questions?