what is industrial origin approach?

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what is industrial origin approach?

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  1. paafamily
    Use and Origin of Resources - Sources and Methods

    The time series are based mainly on national sources as collected by World Bank regional country economists. They generally accord with the System of National Accounts (SNA). Most definitions of indicators given below are those in UN SNA, series F, no. 2, revision 3.

    For most countries, GDP by industrial origin is the sum of value added measured at producer prices.

    To provide long-term trend analysis, facilitate international comparisons and include the effects of changes in intersectoral relative prices, constant price data for most economies are partially rebased to three base years and linked together. The year 1970 is the base year for data from 1960 to 1975,1980 for 1976 to 1982, and 1987 for 1983 and beyond. These three periods are "chain-linked" to obtain 1987 prices throughout all three periods.

    Chain-linking is accomplished for each of the three sub periods by rescaling; this moves the year in which current and constant price versions of the same time series have the same value, without altering the trend of either. Components of GDP are individually rescaled and summed to provide GDP and its sub aggregates. In this process, a rescaling deviation may occur between the constant price GDP by expenditure. Such rescaling deviations are absorbed under the heading private consumption, etc. on the assumption that GDP by industrial origin is a more reliable estimate than GDP by expenditure.

    This approach takes into account the effects of changes in intersectoral relative prices between the original and new base period (original base periods are noted in the country list on page 681). Because private consumption is calculated as a residual, the national accounting identities are maintained. This method of accounting does, however, involve "burying" in private consumption whatever statistical discrepancies arise on the expenditures side in the rebasing and chain linking process. Large discrepancies are flagged in the General Notes.

    Partial rebasing requires constant price estimates by industrial origin at the rather aggregated level shown in these tables. If sufficient data are not available for partially rebasing to 1987, then 1980 is used, or the original base year if 1980 data are not available. If only GDP or GNP is available, the original constant price estimates of GDP are directly rescaled to 1987 prices.

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