Measuring the non-observed economy. A handbook

The main focus of the Handbook is to provide guidance on how to produce exhaustive estimates of GDP. This means ensuring that as many productive activities as possible are observed, i.e., directly measured in the basic data on production, incomes, and expenditures from which the national accounts are compiled. It also means ensuring that non-observed activities are nevertheless accounted for, i.e., indirectly measured during compilation of the national accounts.

The groups of activities most likely to be non-observed are those that are underground, illegal, informal sector, or undertaken by households for their own final use. Activities may also be missed because of deficiencies in the basic statistical data collection programme. These groups of activities are referred to in this Handbook as the problem areas. Activities not included in the basic data because they are in one or more of these problem areas are collectively said to comprise the non-observed economy (NOE).

Thus, measurement of the non-observed economy involves action on two fronts:
- improvements in direct measurement by the data collection programme, resulting in fewer non-observed activities and hence fewer non-measured activities; and
- improvements in indirect measurement during compilation of the national accounts, resulting in fewer non-measured activities.