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Eurostat-OECD Compilation guide on land estimations

image of Eurostat-OECD Compilation guide on land estimations

The repercussions of the 2007–2008 financial crisis have acted as an impetus to improve the quality and availability of statistical information. One such initiative addresses the importance of compiling a complete accounting of a nation’s wealth, and especially the wealth of households. This is of particular importance in view of the housing market’s role in the financial crisis in several countries.

The most valuable item on the households’ balance sheet is usually housing wealth which is composed of the value of the dwelling and its underlying land. Many countries experience difficulties in valuing land and in particular separating the value of the land from the value of the structure. To assist countries, the Eurostat-OECD compilation guide on land estimation represents the first comprehensive overview of conceptual and practical issues related to the compilation of the balance sheet item land in the national accounts, in total and by institutional sector.

The Eurostat-OECD compilation guide on land estimation was prepared by the Task Force on Land and other non-financial assets under the joint leadership of Eurostat and the OECD. Representatives from various European Union (EU) and non-EU OECD countries were represented as well as the European Central Bank.

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Classification of land

A coherent and consistent classification that covers all types of land within a country is needed to adequately estimate the total value of land. However, that is not to say that the entire geographic surface area of a country is included within the asset boundary of the SNA 2008 (SNA 2008 paragraph 12.21). Only land that fits the definition of an asset should be included within the asset boundary, that is, all land on which effective ownership rights can be assigned to (an) institutional unit(s) and from which economic benefits are derived by their owner(s) by holding or using them over a period of time (SNA 2008 paragraph 1.46). While it is not explicitly stated in SNA paragraph 1.46 it is important to note that this includes allowing others to use the land.

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