Consultation on balanced estimates of regional GVA

Closes 30 Sep 2017

Opened 25 Aug 2017


Gross value added (GVA), the amount by which the economy grows due to the production of goods and services, can be measured using three different approaches, known as the income approach, the output (or production) approach, and the expenditure approach. In the UK Regional Accounts we currently measure regional GVA using both the income and production approaches. We don’t use the expenditure approach because it includes the imports and exports of goods and services, which are difficult to measure between regions.

Using two different methods to estimate regional GVA gives us two different answers to the question of what is GVA in any given region, which can cause some confusion as people lack any clear basis for choosing between the two. We have therefore developed a ‘balancing process’ to take the strongest parts of both existing measures and use them to create a single balanced estimate of regional GVA, which represents our best estimate of the true value of GVA in any region.

The method we have used is ground-breaking. To the best of our knowledge nobody has ever done this before, using weighted quality metrics to inform an automated balancing process. The improvement in the reliability and stability of regional GVA estimates underpins an expansion in the level of industrial detail for which we can provide estimates, and as a by-product of this development we have also improved by one year the timeliness of our provision of ‘real’ GVA indices with the effect of price inflation removed.

Why We Are Consulting

This development uses a new process that has never been used before. While we believe it to be a good method, we want to give others the opportunity to give us feedback on the method and its results. In this way we hope to learn about people’s concerns so that we can guide our development effort to addressing any issues people raise. We produce these statistics to meet user needs, and this is a way we can identify how well those needs are being met.

Below you will find an article describing the method we have used and outlining our current plans for what we intend to publish from December 2017. You can also find some files containing the test results obtained from running the balancing process on last year’s GVA income and production estimates. Please read the article and take a look at the test results before completing the online survey.

The feedback we receive will be used to inform the decisions we take about what we publish in December and the priorities of our future development programme. We will publish a response to this consultation in October to let people know what we intend to do.

Thank you for your help.

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