Download Government and other non-market producers` owned assets

Government and other nonmarket producers’ owned
assets
Cost of using capital
December AEG
• Strong support in principle for including
a return to capital - viewed as
opportunity cost - in the measurement
of non-market output
• Concern about the rate of return and
availability of data for capital stock
Global consultation
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13 responses from “AEG” countries
31 others
Opinion divided
Conceptual points
Practical difficulties
Concept 1
• Non-market equals non-profit; why
include “profit” for govt?
• Measuring non-market output by proxy
of costs; capital services (user cost
times volume of services) better
measure than decline in asset value
Concept 2
• Assets should be measured same way
for market and non-market
• Asset with return
Cont
100
80
60
40
20
Value
281
190
116
59
20
57
116
39
59
20
20
• Asset with no return
Cont
Value
90
281
74
190
Concept 2 cont
• Assets should be measured same way
for market and non-market
• Means including return to capital
• Productivity implications
Concept 3
• GDP would increase - what would
happen to govt operating surplus?
• Would increase govt consumption
expenditure by same amount
• GDP and NDP would increase
Concept 4
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Too much modelling
Same model as PIM
Too much imputation
Imputing value not economic impact
Rate of return
• Opportunity cost of money
• Government bond rate
• Interest on government bonds divided
by face value of bonds
Data problems
• PIM data is not market price
• No data for capital stock
– At least for some assets
• Where does cfc data come from?
• Resource intensive
• Much more than PIM?
Same questions
•
Should a return to capital be estimated
for non-financial capital used in nonmarket production?
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Computers, vehicles
Roads
City parks
Inventories
Land and other natural resources