Report

Changes to National Accounts: inclusion of Illegal drugs and prostitution in the UK National Accounts

Authors

Publication date

29 May 2014

Summary

This article covers the inclusion of illegal drugs and prostitution activity in GDP and its components; this will be introduced when revised figures for the UK National Accounts, consistent with Blue Book 2014, are published in September 2014.This change is a result of ensuring comparability in measuring Gross National Income (GNI) across EU countries.The article explains the methods and data used to estimate the level of illegal drugs and prostitution activity in the UK and the effects of including this activity on GDP and its components, and sets out suggestions for further action. It does not include numerical impacts – please find these in the article ‘Impact of ESA95 changes on current price GDP estimates’.The article concludes that there are significant limitations in the availability of data to calculate these estimates, and that this means that such calculation requires a number of assumptions on which the estimates are, therefore, partly based. This applies especially to the estimates of prostitution activity.

Subjects

Drug/Alcohol Abuse and Economics

Links

http://www.ons.gov.uk/ons/rel/naa1-rd/national-accounts-articles/inclusion-of-illegal-drugs-and-prostitution-in-the-uk-national-accounts/index.html

Notes

Stephen Pudney's comments relating to these changes generated media coverage

Related publications

1. Should we tax illegal drugs and prostitution?

   Joshua Abramsky and Steve Drew

   Media - 06 Oct 2014

2. Drugs and prostitution £10bn figure is mere 'guesswork'

   Joshua Abramsky and Steve Drew

   Media - 31 May 2014

3. Front: immoral earnings: sex and drug trade added to GDP figures

   Joshua Abramsky and Steve Drew

   Media - 30 May 2014

4. Drugs and prostitution to be included in UK national accounts

   Joshua Abramsky and Steve Drew

   Media - 29 May 2014

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