VI. THE PRODUCTION ACCOUNT
F. Measurement of other non-market output
| 6.90. | As explained above, government units or NPISHs may engage in non-market production because of market failure or as a matter of deliberate economic or social policy. Such output is recorded at the time it is produced, which is also the time of delivery in the case of non-market services. In general, however, it cannot be valued in the same way as goods or services produced for own final consumption or own capital formation that are also produced in large quantities for sale on the market. There are no markets for collective services such as public administration and defence, but even in the case of non-market education, health or other services provided to individual households, suitable prices may not be available. It is not uncommon for similar kinds of services to be produced on a market basis and sold alongside the non-market services but there are usually important differences between the types and quality of services provided. In most cases it is not possible to find enough market services that are sufficiently similar to the corresponding non-market services to enable their prices to be used to value the latter, especially when the non-market services are produced in very large quantities. |
| 6.91. | For these reasons, and also to ensure that the various non-market services produced by government units and NPISHs are valued consistently with each other, they are all valued in the System by the sum of the costs incurred in their production: that is, as the sum of:
Intermediate consumption
Compensation of employees
Consumption of fixed capital
Other taxes, less subsidies, on production.
The net operating surplus on the production of non-market goods or services produced by government units and NPISHs is assumed always to be zero. |
Valuation of the total output of other non-market producers
| 6.92. | Government units and NPISHs may be engaged in both market and non-market production. Whenever possible, separate establishments should be distinguished for these two types of activities, but this may not always be feasible. Thus, a non-market establishment may have some receipts from sales of market output produced by a secondary activity: for example, sales of reproductions by a non-market museum. However, even though a non-market establishment may have sales receipts, its total output covering both its market and its non-market output, is still valued by the production costs. The value of its market output is given by its receipts from sales of market products, the value of its non-market output being obtained residually as the difference between the values of its total output and its market output. The value of its receipts from the sale of non-market goods or services at prices that are not economically significant remain as part of the value of its non-market output. |
|
