5249.0.55.004 - Information Paper: Tourism Satellite Account: Introduction of Experimental Chain Volume Estimates, 2012-13  
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METHODOLOGY BY KEY AGGREGATE

TOURISM GROSS VALUE ADDED (GVA)

Tourism gross value added chain volume estimates are derived from tourism output minus tourism intermediate use in prices of the previous period. A volume index is then compiled and this index is chained taking account of the price relativities from year to year. The index is then converted to chain volume values by using the current price index ratio from the reference year.

Tourism output whilst tourism output is not being published, it needs to be derived in volume terms to calculate tourism gross value added.

Tourism output product level deflators are a mix of consumer price indexes (CPI) and producer price indexes (PPI). These have been used to derive the prices in the previous year for each tourism sub-industry and total tourism output to derive tourism industry output volume index(es). This is then chained (linked) together to derive the chain volume index which is applied to the current price index ratio in order to arrive at chain volume estimates. The indexes are re-referenced to equal 100 in the reference year.

Tourism intermediate use – chain volume estimates of tourism intermediate use (by tourism sub-industry) are estimated by deflating the corresponding tourism current price estimates. These estimates are deflated using industry level implicit price deflators (IPDs) derived from the ANA’s unpublished supply-use tables (for each tourism related industry). Implicit price deflators are used rather than a broader measure such as All groups CPI, as they are more reflective of the costs associated with producing the relevant industry's output.

TOURISM GROSS DOMESTIC PRODUCT (GDP)

To arrive at tourism GDP, tourism GVA in prices of the previous period is added to tourism net taxes on products in prices of the previous period. A volume index is then compiled and the index converted to chain volume values by using the current price ratio from the reference year.

The introduction of the goods and services tax (GST) in July 2000 presents complexities for deflating tourism net taxes on products. Consequently, while the current price TSA time series is published to 1997-98, the experimental tourism chain volume estimates time series is not published prior to 2000-01 while these issues are further investigated.

TOURISM CONSUMPTION BY PRODUCT

Tourism consumption is deflated at the tourism product level, for example, accommodation services and taxi fares. The products are deflated using a mix of CPIs (or producer price indexes where relevant CPIs are not available) and the implicit price deflator for dwelling rent. Volume indexes are derived, chained and converted to chain volume values.

Table 1 below shows the respective weights of the most significant tourism products in terms of contribution to total tourism consumption in current price terms (in 2012-13) compared to the most significant sub-group weights used for the CPI from the Household Expenditure Survey in 2011. As demonstrated in the table, the different weighting patterns create differences in the significance of particular products to the TSA and CPI consumption estimates. Further, these weighting patterns differ over the time series of the TSA chain volume estimates due to compositional shifts in the tourism consumption product weights (which change annually) compared to changes in the CPI weights (which are re-based every six years). Therefore the tourism implicit price deflator (tourism price index) will not necessarily match the index level or movements in the headline CPI.


TABLE 1: TOURISM CONSUMPTION AT PURCHASERS PRICES v CPI WEIGHTS
TOP 5 CONTRIBUTORS BY % TOTAL
2012-13
%
2011
%
Tourism Satellite Account (a) CPI Weights (b)

Takeaway and restaurant meals
15.21
Private Motoring
10.81
Long distance passenger transportation
15.66
Purchase of new owner occupied dwellings
8.67
Shopping, gifts and souvenirs
12.71
Rents
6.71
Accommodation services
11.77
Meals out and take away foods
5.43
Fuel
9.50
Holiday travel and accommodation
4.76
Total of selected products
64.85
Total of selected products
36.38

Source (a): Tourism Satellite Account 2012-13 (cat. no. 5249.0)
Source (b): Consumer Price Index 16th series (cat. no. 6431.1)

The same product deflators will be used to derive splits of consumption by international/domestic visitors and households/business-government visitors.

TOURISM IMPLICIT PRICE DEFLATOR

The tourism implicit price deflator, or tourism price index, is calculated as the ratio of the current price value of tourism GVA (or Tourism GDP) to its corresponding chain volume value, multiplied by 100. The advantage of using an implicit price deflator for measuring price change for the tourism industry over a general measure of price change such as the CPI, is that the implicit price deflator accounts for compositional shifts in the basket of products consumed (or produced) from year to year, unlike the fixed weighted CPI.

Users should be aware that implicit price deflators are revised annually with re-referencing and therefore are not recommended for purposes such as indexing in legal contracts.