Land and Natural ResourcesLand and Natural Resources AEG AEG

New York, April New York, April 20122012

Contact: nadim.ahmad@oecd.org

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) – 1st 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?