AUSTRIA: Illegal Drug Trafficking, Smuggling of Cigarettes and Illegal Prostitution in National Accounts and Balance of Payments
Introduction
There are estimates for illegal drug trafficking, smuggling of cigarettes and illegal prostitution in National Accounts. Smuggling of alcohol is not significant in Austria. Cross-border activities of these illegal activities are included in Balance of Payments. Illegal drug trafficking and smuggling of cigarettes are included in the position “illegal goods”, while illegal prostitution is included in “personal, cultural and recreational services”. Non-reported health services are included in health services; payments for non-recorded construction work and home help are included in workers remittances. The estimates are done in accordance with the recommendation of the Task Force on illegal Activities. The scope of these estimated items cannot be determined by the Oesterreichische Nationalbank, as these estimates are done by Statistics Austria and transmitted in the respective B.O.P aggregates.
Scope, Methodology, Compilation Practices, and Data Sources
Estimates are done by Statistics Austria. Oesterreichische Nationalbank receives aggregates with a regional breakdown, therefore it is not possible to determine the scope of items included in the respective aggregate. Illegal goods are solely imported, there are no exports.
Estimation of Illegal Activities
Estimation of cigarette smuggling
Estimates are based on demand. Based on micro census on health, demand for cigarettes is estimated. The demand is deducted by the number of cigarettes that have been sold legally. The difference is then the number of cigarettes that have been sold illegally. Based on information on illegal market of cigarettes, average prices are known. The respective value is included as import in Balance of Payments. There are no data for export activities.
Estimation of drug trafficking
Estimates are based on demand. Demand is derived from studies and from surveys (mainly for the years 2004-2008) on drug consumption. Information on prices is derived from UN World Drug Report, information from Department of the Interior and Department of Health. The respective value is included as import in Balance of Payments. There are no data for export activities.
Estimation of illegal prostitution
Estimates are based on supply. There are information/estimates on number of illegal prostitutes and average income from administrative data and NGOs. Multiplying these numbers allows to compile the whole supply of prostitution services. Share of non-residents is included in Balance of Payments.
Linkages Across Statistical Domains
All three estimates are integrated in National Accounts and Balance of Payments statistics. In national accounts consumption and mark ups of cigarette smuggling and drug trafficking are included as well. As there are no significant intermediate services, spread between purchase and sale prices is value added. For prostitution there are certain assumptions on intermediate services, such as rents, material and other services.
Current Challenges and Conclusions
Austria is constantly trying to improve estimates and increase completeness of national accounts and consequently in Balance of Payments statistics. Shadow activities can – by nature - not be measured directly, therefore values are always approximated by model-based estimates.