Úr þjóðarbúskapnum - 01.12.1960, Blaðsíða 36

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Arni Vilhjálmsson:
Notes on Statistical Data about the
lcelandic Economy 1948-1958
These notes and the table on Data about the Ice-
landic Economy 1948—1958 were prepared for use
in a simplified econometric model of the Icelandic
Economy. The National Accounting Data used here
deviate from previously published official figures.
(Cfr. U.N. Statistics of National Income and Expendit-
ure). Although based on incomplete material, these
data are better suited for econometric use than the
official figures, mainly because the tendency to under-
estimation of G.N.P. in the official figures, results
in an even stronger tendency to under-estimation of
tlie derived figures for private consumption.
National income studies are still in their
infancy in Iceland. Research in this field has
been hampered by various matters, such as
an unfavourable attitude on the part of the
reporting firms. These have felt that taxation
has been oppressive. As a result turnover and
net income have generally been underreported
to a considerable extent. In order to avoid the
consequences of inconsistencies with their tax
returns, these business firms have been very
reluctant to give reliable information about
their operations for statistical uses.
The wage and price indices reveal the tre-
mendous inflation which has been a major
economic problem in Iceland in the last 20
years. In the period covered by our series,
wages and salaries generally have been regul-
arly adjusted to the cost of living index. In
their attempt to kepp down the cost of Living
index, the authorities have subsidized consum-
er goods, primarily agricultural products. The
choice af the specific goods to be subsidized
has to some extent depended on the money cost
of subsides per unit point in the index. The
fact that the official cost of living index has
not sufficiently taken into account changes in
the composition of household expenditures, is
another shortcoming of this index. The index
submitted in the statistical table: the index of
prices of consumer goods, is derived from the
official cost of living index, but with some of
the following worst shortcomings of this index
removed: 1) The very unrealistic rent com-
ponent. 2) A special form of family allowance
which was included in the official index from
1948 to 1950 and 3) Replacement by actual
market prices of coupon prices on some ra-
tioned goods. The index of house construction
costs represents the second of the two indices
of prices of final deliveries. No other indices
are available for deflating purposes.
Previous studies of gross national product
have started with estimates of net national
product at factor costs. These estimates have
to a large extent been based on tax returns.
Adding net indirect taxes and depreciation
allowances has yielded an estimate of GNP.
Statistics on foreign trade and general govem-
ment transactions are quite accurate and much
effort has been devoted to estimating capital
formation. An estimate of private consumption
has then been arrived at by subtractions from
GNP in the familiar way.
It has been known for a long time that the
GNP estimates so obtained have been under-
estimates. However, it has been believed that
these figures would indicate the changes from
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