Box: Satellite Accounts: What Are They?

Satellite accounts are frameworks designed to expand the analytical capacity of the national accounts without overburdening them or interfering with their general-purpose orientation. In this role, satellite accounts organize information in an internally consistent way that suits the particular analytical focus at hand, yet they maintain links to the existing national accounts. Further, because they supplement, rather than replace, the existing accounts, they can be a laboratory for economic accounting in that they provide room for conceptual development and methodological refinement.

In their most flexible applications, satellite accounts may use definitions and concepts that differ from the existing accounts. For example, a satellite account may be built around a broader concept of capital formation than the existing accounts. This flexibility is being used in BEA's work on integrated economic and environmental accounts and on research and development accounts. Satellite accounts such as these use different concepts and definitions by design; in other respects, they retain consistency with the existing accounts.

Satellite accounts can add detail or other information about a particular aspect of the economy to that in the existing accounts; for instance, they can integrate monetary and physical data. They can arrange information differently, perhaps by cutting across sectors to assemble information on both intermediate and final consumption. For example, a satellite account can assemble business expenditures on training—treated as intermediate consumption in the existing accounts—and education-related expenditures by households and government to analyze the role of education in the economy. They can use a classification other than the primary one. For example, they can identify expenditures on "research in education" as part of research expenditures even though they are included in education expenditures in the existing accounts.

The terminology and concepts associated with satellite accounts reflect the experiences of several countries that have constructed them, largely on an ad hoc basis, for fields such as health, education, agriculture, research and development, and the environment. The System of National Accounts 1993, the newly revised international guidelines, includes a chapter that provides a general framework for satellite accounts and demonstrates how that framework can be used for some of the fields in which such accounts would be most useful. This chapter represents, in a real sense, the coming of age of satellite accounts as an analytical tool.