Thursday, 27 March 2008

Not comparing like for like - Why the Boston Globe is Wrong

While looking at the Arts and Letters daily I came across an article that was looking at the growth of authoritarian states as innovative entrepreneurs. The article is a novel attempt to understand what the author sees as an isolated phenomenon but is clearly missing the wood for the trees:

  • The author assumed that innovation in entrepreneurship and rapid growth only comes form Dictatorial (or less Democratic countries) - Turkey, Brazil, Argentina and India will be very disappointed to hear these news (and Pakistan might be chuffed). The problem of the article is that it is trying to combine two different subjects: the rapid rates of growth of some countries that are not very democratic but are part of the developing world that is catching up to western levels of development and the growth of sovereign wealth funds.
  • As for the rapid growth rates - its is partially a hoax - it is true that China is growing very fast: but it is much an story of "technological Catch up with improved social capabilities" Ala Abramovitz caused partly by the technological changes that allowed the globalisation of manufacturing ala Krugman and due to improved institutional set up ala North. I am not just trying to cram as many eminent economists in a senescence. I am trying to prove that sentences are misinformed.

One striking recent study by the American Enterprise Institute, a conservative Washington think tank, shows that the economies of politically unfree nations have grown faster than those of politically free nations over the past decade, often through forceful use of business and financial power. A recent report by the global monitoring organization Freedom House found that "a group of market-oriented autocracies" were an important force in an overall decline in world freedom.

It just so happens that poorer countries are catching up to richer ones who are growing because they are further in the technology tree + the $100 Dollar price tag of oil. So no Boston Globe… it is not the lack of democracy that is making these countries grow – its other factors.

· The second big error of the article is about sovereign funds- The article does not even discuss that far from being an article of growth they are an article of control that could even stifle growth for a less developed country such as China. Several investor theories argue that the rate of return of investing in a less developed country is higher than in a developed country. In addition in investing in your country you can create a multiplier effect, whereby the investment will circulated around the economy and provide and even larger increase of GDP. Although both theories are considered too simplistic they still hold partly true. Part of the Sovereign funds job is to provide greater control and sacrifice growth: these funds are getting relatively low rates of return but such returns come back to the direct control of the state. The alternative would be for the state to invest in project within their own countries rather than buy up companies: its not like Russia or China has run out of investment opportunities. But doing so would perhaps lead to both a higher growth or a democratisation of such growth – the government will not have direct control over the receipts despite the fact that such receipts will probably bee bigger and more beneficial to the economy if invested within the country. The sovereign funds are a way of maintaining control of the state by hogging a share of the enlarged pie – and not a reason for the growth of the pie per se.

Tuesday, 25 March 2008

New Researchers of the World Unite: Demetris Pillas

Once again I am pleasantly surprised to know of Cypriot researchers involved in a diverse range of projects and issues; one would hope that some of these young academic talents will be able to research issues in Cyprus in the future, if adequate funding and research opportunities are created for them. This week I present Demetris Pillas.

Demetris is a doctoral student in the Department of Epidemiology and Public Health at Imperial College London. Demetris is exploring the determinants of infant development and the impact of infant development over the lifecourse. He is examining this through looking at the development of a sample of 12,000 infants from northern Finland. Preliminary results indicate that infant development has its own (independent of social class) effect on various outcomes over the lifecourse (from socioeconomic to health outcomes). I think that a similar study in Cyprus would be very interesting, as it would shed some light on the development of cypriot infants (parenting practices, if cypriot infants develop at a faster/slower rate than the world average, risk factors for delayed development in cypriot infants, etc). Unfortunately no birth cohort currently exists in Cyprus, hence the absence of research on these issues in Cyprus. Demetris will be examining similar issues soon on an internship with the World Health Organisation. I wish him the very best in his studies.

Tuesday, 18 March 2008

The ugly beast rears its head: Inflation and the new president in Cyprus.

The ugly beast rears its head: Inflation and the new president in Cyprus.

The new president of Cyprus has plenty of issues to clear: the previous presidency has left several unresolved issues in terms of the Cyprus problem and domestic social policies. However I am predicting that one of the hardest issues for the new president will be inflation and the expectations of the Cypriot working class who in their majority have voted consistently for the party he represents (AKEL).

Cyprus entered the Eurozone in the 1st of January 2007 with an economy that was already showing signs of overheating: this was partially caused by the Euro entry – the interest rates cuts to align the Cypriot interest rates to the Europe area took place at a time that conventional monetary policy advised an interest rate rise. One of the side-effects of this was a property market boom (one could say buble?) as cheaper loans were made available. This was confirmed by an influential member of the Cypriot Monetary Policy Committee, Professor Pissarides the Swansow Professor of Economics at the London School of Economics at a public meeting in February. The data provided by the Central Bank and the Statistical Service indicate that by November inflation was already above 4%, and possibly increased in January and February with the entry to the Eurozone and the world price increase in commodities. High inflation is not desirable as it creates a negative economic climate for saving and makes important industries of Cyprus (such as naval and tourism) less competitive to other countries linked to the dollar rather than the Euro.

Professor Pissarides also raised concerns that the economy would suffer from inflation as the increases in the world price of oil, wheat and fodder trickled through the economy. The result of such an overheating economy and high costs will create the biggest headache for the new President: How to prevent the increase in militancy when unions demand above inflation wage rises. However the government can not raise interest rates, the most effective way in combating inflation: interest rates are now controlled by the ECB and Fiscal Policy measures to control inflation are considered weak and market distorting.

It is important to note here that Akel’s history is similar to Labour’s in the UK in the fact that the unions were the driving force within the party. PEO, the largest union in Cyprus, is very closely affiliated with the party and campaigned hard for Mr. Christofias presidential candidacy. Many people within Peo feel that they finally have “their” President: Although Both Mr. Vasiliou and Mr. Papadopoulos were elected with Akel’s (and thus Peo’s) support, their business background meant that the union felt that the rights of its members were not fully represented.

As a result of “their” man being elected, I am expecting the unions to demand welfare rights and wage increases that were denied to them in previous administrations. And that is exactly what Mr. Christofias will have to deal with the renewal of the first collective bargaining agreements during the summer. If the president gives in to above inflation demands, it is possible that a inflationary spiral occurs, fuelling more inflation. The unions will feel that their members are being squeezed by the increased inflation and thus be more vociferous in their demands for wage increases.

Mr. Christofias may try to shoot two birds with one stone: he may resist union demands for above inflation wage increases, but sweeten the deal by offering substantial increases in welfare benefits. The rapid development of the economy and the resulting fiscal drag due to inflation (were more people are taxes in higher rates due to the general rise in real incomes) could produce enough of a budget surplus to allow this to happen. But the solution is not a sound one: even temporary welfare benefits tend to become permanent and thus drag budget resources at times of hardship, and that the inflationary spiral may still take place if the real value of the benefits exceeds the rate of inflation.

This will be the most difficult challenge for Mr, Christofias: it will be the first challenge were the President will have to prove to his own party members that he is now president and not the general secretary of Akel by resisting unreasonable wage demands. However doing so is against the core of his role as the general secretary of the party, which ideologically supports the rights of workers. To be fair to Akel and Mr. Chirstofias, the power balance has shifted and now Akel dominates Peo: thus Mr. Christofias maight find it possible to force Peo to moderate wage and welfare claims prior to entering collecting bargaining arrangements. It remains to be seen if Peo will remain loyal to “their” man if their long cherished demands are disappointed yet again.

Workshop Bergen:



“Cyprus and Malta: Data resources on Former British Colonies”



By Alexander Apostolides



Introduction: The status of National accounts in Cyprus and Malta Today


Both Malta and Cyprus became new members of the European Union in 2004. During entry negotiations, Cyprus moved from the 1968 SNA system to adopting the European System of Accounts (ESA 1995). Maltese national accounts did not exactly conform to 1968 SNA prior to accession negotiations, as the production approach in estimating the Gross Domestic Product was never attempted. During negotiations both national statistical offices won exceptions from the aquis that affect Historical National Account creation. In the case of Cyprus it was accepted that backward calculation of the GDP according to current practises would be limited. Malta secured significant exceptions both in limiting backward re-calculations and in what data it needs to supply EUROSTAT in the future.

Both National statistical offices were post-war institutions. The pre-cursors of the Maltese National Statistical Office (NSO) and the Cypriot Στατιστική Υπηρέσια (Υστατ) were established in 1947. The first national accounts were published in 1954 – but in Cyprus national account estimates were calculated back to 1950. As far as I am aware, there has been no attempt by either service to use current ESA practise to correct previous estimates.


There were some attempts to estimate national income prior to 1954, but no effort none was sufficient or explicit enough in their methodology. Cyprus and Malta were included in Maddison’s 1995 estimates as a joint GDP estimate, before they were submerged in a group named “Small Western European Countries” in subsequent updates of his work (Maddison, 1995; Maddison, 2006). Maddison calculated benchmark estimators for Cyprus and Malta back to 1850, while his current estimations for “Small Western European Countries” go back to 1 AD. The actual methodology is unclear but it seems that Maddison used post-1950 data in order to calculate the GDP of Cyprus and Malta and calculated the differential of the joint GDP with the South European average. Maddison extrapolated the series backwards by maintaining the GDP per capita differential vis-à-vis his calculated HNA for Southern European countries. Thus although a useful indicator, the Maddison estimates are clearly insufficient as they just assume that the 20% income differential of Cyprus and Malta in relation to Southern Europe in 1950 was constant throughout their history, and their economies developed exactly as the average of the economies of Spain, Greece, Italy, Portugal and Ireland.


Other GDP estimates for sporadic years exist, especially for Cyprus. Christodoulou made an estimate for 1927 as £3.45 million and for “mid-1930s” as £2.8 million, but is completely obscure on his sources and methodology (Christodoulou, 1992). His result is probably based on an estimate based on tax records by members of the Cypriot Legislative assembly for 1926 of £3.5 million (Georghallides, 1985 p.159). By far the most authoritative estimate was made by Fairfield in 1881; he estimated Cypriot national income at the time as £981,000. The methodology and source of data for any of these estimates is completely unknown, but Georghallides argues that the Fairfield estimate is accurate (Georghallides, 1979).


Overall none of the above estimates provide their methodology in order to be able to reproduce their results. I have yet to find any GDP estimates of Maltese income prior to 1954.


My thesis plans to reduce the knowledge gap in the economic history of Cyprus and Malta by constructing HNAs for both countries. I am attempting to provide yearly estimates of GDP per capita (and some estimates of capital accumulation) for the period 1921 -1939. I have chosen a small time period in order to be able to concentrate in constructing detailed Historical National Accounts (HNAs) rather than scattered benchmarks, partly due to the greater data availability of the interwar period but mainly due to the particular importance of the interwar period for both islands both in terms of politics and economics. The methodology used aims to follow the best HNA practise, subject to the constraint of time available to just one researcher. The work of Kostellenos and Prados de la Escosura for Greece and Spain is consulted throughout my work as a check on my methodology and the plausibility of my assumptions (Kostellenos, 1995; Prados de la Escosura, 1993). Thus I am hoping to produce yearly GDP estimates by using the production method, and subsequently calculating for some years the GDP by using the income method (by using data not used in the production method) in order to check the estimates. The thesis has as an overall objective a possible comparison of Cyprus and Malta. This will allow a greater understanding of the interplay between the economic conditions of the islands and political developments of the time.


I am currently concentrating in using published government sources of the time. Extensive archival work has also taken place in Cyprus, but not yet in Malta. The advantage in preferring Colonial government sources is that most Cypriot and Maltese publications had to follow general colonial office guidelines: thus by establishing a method of creating HNAs by relying on published colonial sources will enable a more rapid reproduction of HNAs for other British Colonies. It is worth noting that there was an attempt in 1942 by the British War Cabinet Office to estimate Colonial national incomes using a similar range of published sources as I plan to use for other British colonies (Deane, 1948).1 However an identical approach can not be used as Deane’s approach does not take into account current established national account practises.


Data sources:


The Data sources for Cyprus and Malta are roughly similar, and thus discussed in tandem. The data sources discussed are all for the period of British rule in Cyprus (1878 -1960) and Malta (1815 – 1964). A brief summary of data resources for the 16th – 18th century can be provided on request.


It is worth noting that it is not necessarily true that the availability and quality of data is greater as one gets closer in time to the first estimates of national income. During the first half of the twentieth century there were frequent changes in definitions, altering what was being measured. Some of these changes (for example the definition of a Dwelling in the 1947 Census) create rather than eliminate problems for HNA creation. The quality of data in Cyprus also deteriorated in the 1950s due to anti-colonial tensions and inter-communal tensions resulting to the EOKA struggle in 1955 – 1959. This is also true for archival research: the archives in Malta and Cyprus have not been fully indexed. Thus in the case of Cyprus all of the Secretarial Archive before 1945 has a thematic index (that was created by the colonial authorities) that is a significant help to archival work. It is much more difficult to find any files for the period 1945 – 1960, due to the lack of a thematic index.

Censuses:


Being British dependencies, both Cyprus and Malta had a Census taken every 10 years (i.e. 1931, 1921, 1911, 1901 etc). For Malta the first census was in 1842; Cyprus had its first Census in 1881. The Second World War disrupted taking a census for 1941; thus Malta has a census for 1948 and Cyprus for 1946 instead. A summary census report was published after every census: I have yet to discover the census returns for any of these censuses.


Accuracy of the censuses:


For Cyprus the Census returns were collected by colonial officials who were diverted to from their normal operations for the purpose. There was no dedicated section of the bureaucracy for statistical work, and this tended to have an effect on the quality of the published results. The questionnaires were completed by government officials in the towns, thus providing some basic guarantee to their quality. However for the overwhelmingly rural population, the census questioners were completed by the village headsmen (Mukhtars), for a small financial reward. Thus mistakes in the initial gathering of census data were possible, especially in more remote villages where the Mukhtars’ literacy was limited, and where the Mukhtars they had minimal supervision. However Demographic Studies (Verropoulou, 1997; Agathagelou, 1985) argue that the census data are more accurate than other government sources on population and demography.

Occupation statistics underreport the gainfully employed population, as well as persons employed in agriculture. There is an even greater underreporting of women in employment, especially in the rural areas.


Examples of such underreporting can be found in the 1931 Census. Only 56% of the Male population is considered to be gainfully employed, with more than 11% of the male population in “Unknown Occupation” and 16% in “Persons without Occupation”. A staggeringly low percentage of the female population is considered to be gainfully employed (20%), with 35% of the female population in “Unknown Occupation” and 34% in “Persons without Occupation”.


The Maltese census questionnaire was given to every head of household to fill, subject to a fine if the questionnaire was not returned. Thus the probability for spurious answers was high, considering that over 60% of the population in Malta was illiterate in 1931. This method of census taking also seems to result to an underreporting of women in employment: the ratio of male agriculturalists to female agriculturalists in 1931 was 5:1, which is not considered plausible.


Thus any attempt to use occupation statistics derived from the censuses for HNA purposes should be treated with great caution. The data on occupation should be seen as indicative rather than definitive. In my own attempts to create HNAs I have avoided using occupation data as much as possible, but it seems that some use of the occupation data is necessary to estimate production in the service and handicraft sectors of the economy.


Census Information:


A majority of the questions asked by the census takers which are of interest for HNA construction are very similar over time. Significant improvements took place in the 1921, 1931 and 1946 census where additional questions on secondary occupation, housing and ownership were introduced. An example of such change is the change in the definition of what constitutes a dwelling in the 1921 and the 1946 census, which makes using 1946 data to calculate dwelling stock difficult. These improvements are not always compatible with previous censuses; thus care is needed in comparing census data over time.


New data tables were added in each census. By 1946 the Census was extensive and covered a large array of issues:

  • Population (Population, Distribution, Birthplace, Religion, Mother-tongue, Sex and Age)

  • Other Demographic Data (Mortality, Life expectancy, Conjugal Condition, Age of Marriage, Childbirths, Children per household)

  • Literacy (Including Knowledge of English)

  • Occupation

  • Aliens and Infirmity

  • Housing Accommodation and Housing Services (Dwellings, Rooms per dwelling, Type of Accommodation and type of Tenure, Domestic water sanitations and electricity)

  • An agricultural Census (see below)


The 1948 Maltese Census did not look much different as most of the questions were similar. The largest difference between the Cypriot and the Maltese census was the lack of an agricultural census in Malta; however the Maltese census has statistics on wages and income that the Cypriot 1946 census does not cover. Most of these categories are broken by age and by district, as well as broken down in a rural / urban form2.


The Cypriot Agriculture census provides information about farm holding sizes, irrigated land, crop bearing trees (especially carob and olive yields) and other agricultural yields not covered by the statistical Blue books (aniseed and cherries). The 1946 census also provides a historical perspective; it offers a four-year moving average of prices and output for the ten most important agricultural products of Cyprus from 1896 to 1946.


Going further back in time the basic categories of population, literacy, age, aliens, infirmity and dwellings are given, but less information is given both in terms of detail as well as in terms of breakdown.

Blue Books

By far the most important source of data for Cyprus and Malta are the yearly statistical blue books. The blue books were a yearly compendium of statistics of the colony compiled under colonial office requirements. They were published from the mid-19th century and were discontinued with the outbreak of the Second World War (they were replaced after the war by statistical abstracts such as the Cyprus and the Malta review).


The Colonial blue books combine data from all government departments into one published source, and were published yearly. Some of the sections most relevant to HNA construction are listed below. The sections numbering is from the 1931 Cyprus Blue; the Maltese Blue book of 1931 is similar except it has an additional section on military expenditure as the last section. Blue books prior to 1921 have fewer sections, but most of the information relevant to HNA creation is present.


The 1931 Cyprus blue book has over thirty sections with the most important in terms of HNA are:


Section 1: Taxes Duties and other sources of revenue

  • A detailed description of every tax, duty or fee levied by the government. i.e. Barley duty: 3 copper piastres to the counterweight. (1 copper piaster to a penny)

Section 3: Government Revenue and Expenditure (comparing why it rose or fell)

  • Comparing each tax with the revenue of the previous year and stating the cause of decrease. i.e. Import duties decreased by £51263 in 1931 due to the “general trade depression and decline in commodity prices”

Section 7: Municipal corporations and other Public Bodies

  • Revenue and expenditure of each municipal body

Section 8: Public Works

  • Expenditure in roads, public buildings and harbours

Section 12: Civil Establishment

  • The position and wage of all permanent staff in government.

Section 15: Population and Vital Statistics

  • Based on the latest census figures, the government estimated persons employed by sub-district in agriculture, manufacture or commerce. Also provides number of people who came and left the island, an estimate of the total population and infantile mortality in districts and towns.

Section 19: Currency, Banking, Weights and Measures

  • List of gold, silver and bronze coin in circulation as well as paper money in circulation. There is a list of every bank operational in Cyprus, its number of branches, and the amount of deposits it has in the Colony, as well as a table in order to standardise local weights and measures to the British imperial measurements.

Section 20: Imports and Exports

  • Statement of value and quantity imported and exported, as well as the duty or tariff collected (per item). This is specific to product and by country – an all together exhaustive account of yearly imports and exports.

Section 21: Shipping

  • Number, tonnage, and crews of vessels entered and cleared (separated into steam ships and sailing vessels). This is broken down by country of destination and by country of ownership. The section includes ships involved in the coasting trade in a separate table.

Section 22: Production and Natural Resources

  • This is by far the most important section in terms of creating HNAs. This section provides the acres and quantity produces for the 9 most important crops. After 1931 this expands to include a total of 26 crops, effectively encompassing all cultivated crop production. The only significant exceptions are in the production of carobs, olives and olive oil, wine (although the quantity of grape quantity produced is provided from 1931) and citrus fruits.

  • This section also provides the annual number of livestock, and the yield of animal produce (except meat) and their average farm value.

  • It provides detailed forestry and fishery information.

  • It provides mining information such as and the total value of ore as well as its metallic content.

  • It provides a list of the most important industrial establishments; the number of persons employed the cost of raw material uses, the output produced and the net selling value (prices at the factory door).


This is by far the most important section of the blue book. The basis of my HNA creation effort will be based on this information.


Section 23: Labour Wages and cost of living

  • It provides the average wage rates for several jobs including domestic service

  • It provides for the average, maximum and minimum retail price of staple articles of consumption in the capital (Nicosia)

  • It provides the average monthly export rates (f.o.b) of staple products of the country

Section 30: Savings Banks and Friendly Societies

  • Provides a list of Savings banks and Co-operative societies with the authorised capital and the value of their deposits

Section 32: Railways, Tramways, Steamship services, Roads, Motor Transport

  • It provides through cost and revenue of publicly run Railroads and tramways, as well as the numbers of cars registered and road mileage available to road traffic.

Section 33: Post, Telegraph and Telephone statistics

  • Provides detailed revenue of cost and volume of letters, telegrams, and calls.


Most importantly, the blue books already provide enough information for volume estimates to be created for agriculture, forestry, fishing, mining and manufacturing. In the case of manufacturing value added estimates are provided from 1931 onwards.


The blue books are by far the most extensive yearly data source on Cyprus and Malta. The accuracy of the recorded figures is hard to fathom, as no research has taken place to evaluate how far there were possible errors in recording such information. However qualitative evidence seems to confirm that the British authorities were quite efficient in collecting taxes and stamping out tax evasion. Since the majority of the tax revenue in Cyprus and Malta was collected by duties on imports and exports, on mining licences and taxes on agricultural production, I believe that such data as presented in the Blue Books are reasonably accurate.


The greatest weakness of the blue books is the lack of information on prices and wages. Despite some information on the highest, lowest and average prices of staple goods in the islands’ capitals, as well as some information on wages, there is not enough price data to be able to create good deflators. A cost of living index was not introduced in Cyprus until 1948. In Malta the Royal Navy did create a cost of living index dating back to the First World War, but I have yet to find it.

In the Cypriot government archive, I found handwritten and thus unpublished Blue books for 1941, 1944 and 1946. They provide information on production, wages, and government revenue during the war, thus allowing for an understanding of the economy and possible HNA creation at a time of complete lack of data publication.


Annual Colonial Reports


The annual colonial report is a valuable yearly overview of the situation in a colony for the given year. Its highest value is its provision of a qualitative feel of how the economic situation of the island was perceived by the colonial bureaucrats. A yearly estimate of population, as well as birth and death rates is provided. The derivation of yearly estimate on population is unclear; comparing it to the population returns in census years, the government estimate has a margin of error of plus or minus 4.5%. There is no actual data on migration, but some data on permissions issued to enter and exit the island are provided. However an attempt to estimate the population of Cyprus backwards by using current forecasting projection tools based on such data has been abandoned. This is because even if migration was controlled for, the registration of births and deaths was incomplete and inaccurate, as gross underreporting of Births and Deaths was endemic (even in the 1980s Agathangelou (1885) calculated that deaths were underreported by 20%). Thus the underlying variables needed to project the population backward would have led to spurious results.


Some sporadic data on tourism are also given, but again without explanation on how the data was derived. Some sporadic data on costs to British officials staying in Cyprus or Malta are also sometimes included.



Annual reports of Government Departments


Every government department published an annual report covering a wide range of issues as an annual review; the yearly statistical blue book and the annual colonial reports are effectively based on these reports. Some, such as the customs and excise annual report, do not provide any additional information not accounted in the blue books. Others, such as the Mining commissioners yearly report, the Agricultural department report and the public works department report provide valuable information excluded from the blue books. Unfortunately although published, such reports were not necessarily saved by libraries; however for most years the original manuscript is in the respective national archive.


Information provided includes the cost of construction of roads per mile, the monthly wage rate of workers per district, a bi-annual livestock survey, and some sporadic estimates of value added in agriculture and mining. As with the basic categories of expenditure, cost and wages per department are given. However as one goes further back in time less information is given both in terms of detail as well as in of breakdown. Also some information is not collected until a relevant government department is set up, as was the case for the mining department in Cyprus.


One-off Government Publications


Other important data sources for Cyprus and Malta include publications that were published due specific economic problems. In Malta the dire economic situation in the beginning of the 20th century resulted in an extensive Royal Commission that published its findings in 1911 (Malta Royal Commission, 1911). In Cyprus, popular calls for more active agricultural policy to reduce the dependency on money lenders resulted to an agricultural survey in 1930 (Surridge, 1930) and a report on the economic condition of the island in 1934 (Oakden, 1934). All contain useful information for the years of the survey and are also a good first account of the problems facing the islands.

Archive work and other possible sources


The Archives in Cyprus and Malta are helpful; however they are hampered by outdated rules, especially in terms of public research hours and photography, that severely curtails the research one can do in the time one has available. Extensive research in the Cyprus archive on the construction of government houses and on architectural surveys of villages has allowed me to build a good understanding on the cost and the value of construction of housing. This was combined with census data on dwellings and in a joint project with Mr. Zeitounsian (Head of National Accounts Section, Ystat, Cyprus) enabled us to estimate the dwelling stock of Cyprus form 1921 – 1960. It is hoped that further archival research, combined with dwelling stock calculations will enable a plausible estimation of the construction sector, as well as a good estimate for rental housing income. We are in the process of standardising the methodology; upon completion a similar process will be attempted using Maltese archival material.


Other possible sources of data for HNA estimation includes tax data. I have not yet looked into this in detail; but the lack of income tax in both Cyprus and Malta provides both disadvantages and possibilities. The disadvantage is that an estimate of GDP using the income method by using income tax returns is impossible; however the taxing of production, especially Agriculture (especially in Cyprus were agricultural production was subject to a tithe until 1926), might allow for checking of agricultural estimates for plausibility.


Taxation data published in the blue books and in the annual report of the Land Registration and Survey department might allow calculations is estimating the capital stock, especially since property tax was based on early modern period laws, which counted all property, including orchards, as taxable property.





Conclusion:


The British colonial era in Cyprus and Malta provides ample data sources for an attempt to create HNAs as well as other historical indicators. This attempt will be the first generation of historical national accounts; the wealth of evidence available will enable refinement of the HNA that could complement attempts to create national accounts for the whole of Europe.


Since the first attempt in establishing HNAs for Cyprus and Malta is still in its infancy, adopting a methodology followed by the Nordic project is invaluable as it will aid cross country comparisons, which have always been tricky previously due to the plethora of different methodologies used in estimating Historical National Accounts.


Bibliography


Agathangelou, A., Mortality In Cyprus Nicosia: Ministry of Finance


Christodoulou, D., 1992, Inside the Cyprus Miracle: The labours of an Embattled Mini-Economy Minneapolis, University of Minnesota


Dean, P., 1948, Colonial National Incomes: An experiment Cambridge: Cambridge University Press


Georghalides, G., 1979, A political and Administrative History of Cyprus Nicosia: Cyprus research centre


Georghalides 1985, Cyprus and the governorship of Sir Ronald Storrs Nicosia: Cyprus research centre


Government of Cyprus (Prepared by Hart-Davis, C. H.), 1921, Report and General Abstracts of the Census of Cyprus of 1921. Nicosia: GOP.


Government of Cyprus, 1931, Report and General Abstracts of the Census of Cyprus of 1931. Nicosia: GOP.


Government of Cyprus, 1933, Report appointed to study the conventions and recommendations adopted by the International Labour conference Nicosia: GOP.


Great Britain, Royal Commission, Malta : report of the Royal Commission on the finances, economic position, and judicial procedure of Malta London: HMSO


Kostellenos, G. C., 1995 Money and Output in Modern Greece: 1858 – 1938 Athens, Centre of Planning and Economic Research


Maddison, A., 1995, Monitoring the World Economy Paris: OECD


Oakden, Sir Ralph, 1934, Report of the finances and economic resources of Cyprus Nicosia: GOP


Prados de la Escosura, L., 1993, Spain’s Gross Domestic Product 1850 – 1990: A new series 2003 Ministerio de Economia y Hacienda, Documentos de Trabajo D-93002


Republic of Cyprus, History and Analysis of the methodology of National Accounts in Cyprus, Nicosia: Ministry of Finance

Republic of Cyprus, 2000, Description of the sources and Methods used to compile non-financial national accounts Nicosia: Statistical Service of Cyprus

Royal commission Malta


Surridge, B. J. A Survey of Rural Life in Cyprus. Nicosia: GOP


Veropoulou, 1997, The Demography of Cyprus Ph D. London School of Economics


Web sources:


Cyprus Statistical Service, Ministry of Economics, Republic of Cyprus:

http://www.mof.gov.cy/mof/cystat/statistics.nsf/index_en/index_en?OpenDocument


Maddison Angus, World Population, GDP and Per Capita GDP, 1- 2003 AD: http://www.ggdc.net/maddison


National Statistical Office, Republic of Malta:

http://www.nso.gov.mt/site/page.aspx?pageid=57


1 The experiment involved estimating national accounts for Nyasaland, Jamaica and Northern Rhodesia; however due to standardisation of basic published statistical material as demanded by the colonial office, the published material used in this exercise also exists for Cyprus and Malta.

2 Malta has an additional category between urban and rural – “Sub-urban”

1


Alexander Apostolides

The Good the Bad and the Ugly: Lessons learnt in estimating the value added of the island’s primary sector and Results.


Introduction

A greater emphasis in mathematical and statistical rigour is now expected in economics and economic history. Ad-Hoc procedures and guestimates are unpopular and considered unreliable. Yet a substantial amount of research relies on historical national accounts (HNAs) that would not satisfy criteria of robustness that the overall research itself entails. One could argue in order to have in order to have reliable results in one’s research, the underlying dataset needs to be reliable.


Currently there is substantial harmonisation of national accounts creation within a UN framework (System of National Accounts or SNA), and a EU (European System of Accounts or ESA) framework. Both the SNA and the ESA attempt to instil a procedural consistency and methodological rigidity in calculating national accounts of a country. As national accounts data are increasingly being compared across time and space it is considered necessary to limit ad-hoc procedures within individual countries by providing a framework of what and how something should be measured. However within such methodological frameworks there is great diversity in estimating the building blocks of the final series: the European commission and national statistical offices constantly create new directives and publications to make the process of calculating national accounts as transparent and as harmonised as possible.


This is not the case in historical national accounting. This is partly due to the difficulty of estimating output with historical sources; data might not be reliable, consistent of might not even exist. Thus each HNA essentially differs due to the different primary data available. However some differences arise from trying to estimate HNAs without a unified framework for researchers to base their estimates1. Although greater variation of procedures is to be expected due the varied quality and quantity of sources available for different countries, the lack of a unitary framework creates more incompatible procedures than necessary. This has a negative impact in both the reliability of the created estimate and its comparability with other estimates.

To be fair to researchers there comes a point when improving methodology and consistency comes at the expense of content. The estimation of current national accounts is a raison d'être of statistical offices; for researchers in HNA’s their estimations are just means to an end; the evaluation of long term economic growth. This article argues that researchers should be forthright about ad-hoc procedures resulting from data weaknesses, since historical national accounting can still provide relatively accurate assessments on broad issues of economic development. Creating HNAs is useful tool in evaluating economic history, as long as their limitations in relation to modern national accounts are understood.


The paper is in two parts:

  • The ad-hoc nature of estimations of the value added of the primary sector in Cyprus and Malta are made explicit (the Good, the Bad and the Ugly). It is argued that despite their problems the results are reliable.

  • The primary sector results are presented. Please feel free to provide suggestions on how to better capitalise the constructed results.


Part One: The Good the Bad and the Ugly.


This paper will present the gross output and value added of Cyprus and Malta in the Agriculture, Forestry and Fishing sector and the Mining sector. Such an exercise is fraught with difficulty. The dataset was fragmented and unreliable. As a result methodologies were employed that would not be acceptable in current national accounting. Here such methods are made explicit as the good, the bad and the ugly.


The sectoral estimate of Agriculture, Forestry of Fishing of Cyprus is based on 85 products categorised in 19 Nace (4-digit) classes. The large number of crop and animal production series is due to the fact that Cypriot agriculture was very diverse; it was considered that unless the attempt to estimate gross output was as extensive as possible it would fail to capture the true outlook of the sector2. Malta’s agricultural and fishing sector consisted of 42 products in 14 classes. Cypriot Mining and Quarrying constituted 18 products in 5 classes; in Malta’s Quarrying constituted five products in 3 classes.


Gross output was calculated in 1938 producer prices; work is currently undertaken to produce and estimate also in current prices. In the case of Malta estimating agriculture was relatively straight forward as the estimates of gross output most products were given in volume and value terms and in producer prices3. In the case of Cyprus primary sources on producer prices were rare with the exception of producer prices reported in 1938 in the “Cyprus Agricultural Journal” and in Surridge’s rural survey in 1930. What prices were not covered by the James and Koumides were estimated indirectly using an approximation used in Cypriot post-Second World War national accounting4. Based on a 1967 report that re-estimated the GDP of Cyprus from 1950 to 1967, the producer prices that were not known were assumed to be 0.75% of export (f.o.b) prices5.



The good practices: Some Examples


This section describes the calculation of gross output in constant prices was relatively straightforward. The yearly volume of production was provided by the blue books of Cyprus or Malta and confirmed with the annual reports of the office / department of agriculture; the prices of the products were provided in the annual reports of the department or office of Agriculture. Care was necessary to establish that the 1938 price and 1921 -1938 referred to the same statistical unit. Table 1 provides the example of wheat output in Cyprus. Likewise the production of mining and quarrying products was provided in the Statistical Blue books for the colonies. The price of exported mining products in Cyprus contains elements of transport, and of the insurance sector; however it was neither possible nor desirable to differentiate due to the limited data available.


Table 1

Calculating Wheat Gross Output: Cyprus


1921

1922

1923

1924

1925

1926…

1936

1937

1938

Volume of Wheat in Kiles

2380090

2495900

2567654

1820406

2071461

1623909

1782618

2139687

1951528

Price of Wheat per Kile in 1938

0.1369

0.1369

0.1369

0.1369

0.1369

0.1369

0.1369

0.1369

0.1369

Gross Output in 1938 prices

£325,851

£v £341,706

£351,529

£249,226

£283,597

£222,324

£244,053

£292,938

£267,178


If the volume of production was not available for some of the years in the period estimated using information available that year for other products. For example the known yearly data for cowpeas had a correlation of 0.828 in relation to the complete sesame production series. The average ratio of sesame to cowpeas (in volume) for the known period (1925 – 1938) was used to extrapolate the production of cowpeas for 1921 – 1924 based on the production of sesame in 1921 – 1924 and the average ratio to sesame seeds for 1925 – 1938. Despite using the average ratio of the period 1925 - 1938 to evaluate cowpeas it is still considered good practice since the relationship between cowpeas and sesame seems robust and relatively stable over 13 years; the estimate will capture the vagaries of the climate as affecting sesame.

Table 2

Calculating Cow Peas Output: Cyprus

Correlation coefficient 1924 - 1938

0.828937


1921

1922

1923…

1937

1938


Average Production Differential: Cow peas to Sesame 1924 - 1928







1.465766





Volume of Cow Peas in okes




279480

285487

Volume of Sesame in Okes

270572

130522

234095

301638

215348

Volume of Cow Peas in okes

396595

191315

343129



Price of Cow Peas per Oke in 1938

0.0116

0.0116

0.0116

0.0116

0.0116

Gross Output in 1938 prices


4596


2217


3976


3239


3308




If no significant correlation relation was discerned with a product for which the complete information was known, the missing yearly output for the missing years was estimates to be constant at the 5 year average level. For example flax output in Cyprus 1921 – 1923 was assumed to equal the 5 year average for which the information is available 1924 – 1927. For some products such as sumach and cumin for which no more information was available only the exports of such products were enumerated. However the value of such products was not very significant if one assumes that the total production of cumin and sumach was three times the exported output they would constitute only 2% of the gross agricultural output as estimated.

The bad practice: The estimation of Citrus Output in Cyprus

In some cases direct information on production was not always available, or the information available was contradictory and unreliable. In such cases qualitative and quantitative knowledge from mining or agricultural sources that were published by the government (annual reports of departments / offices, ad-hoc reports by expert on issues of rural poverty, irrigation and marketing) were consulted in order to construct a model to replicate the unknown direct estimates. It was not always possible to use period sources; missing information was supplemented by information for the 1940s.


An example of this is citrus production in Cyprus. Citrus production in Cyprus was the key to the post-Second World War dynamic growth of the agricultural sector. Thus it was important to have an estimate of citrus production to evaluate if the sector was as dynamic in the period 1921 -1938. No estimated of citrus production was included in any of the Blue Books of 1921 – 1938. Limited estimates of citrus production for 1927 and 1928 were provided in the annual reports of the agricultural department. It was decided to estimate citrus production based on irrigation since citrus plants outside irrigated areas do not produce fruit. In their totality the statistical blue book and the agricultural census of 1946 provide enough information to estimate yields per acre and per tree for oranges, valencia oranges, bitter oranges, lemons, sweet lemons and grapefruit. By estimating the yield of citrus trees per acre it was clear that all citrus plantations in 1946 were situated in perennially irrigated areas6.


An assumption was made that during the period 1921 – 1946 the product mix of the permanently irrigated area was constant as presented in the 1946 census. Thus it was assumed the same proportion (17%) of the irrigated area was producing citrus products in 1931 as in 1946. Further assumptions were necessary; it is assumed that the number of trees per acre and the fruit yields per tree in 1946 were representative of the average yield of 1921 – 1946 in order for an estimate to be possible7. The perennially irrigated area in 1931 was 68749 donums; the assumed area under citrus cultivation (17%) is estimated at 11687 donums. Assuming that there were 194 trees per acre (as in 1946 census), the total number of citrus trees in 1931 is estimated at 749422. The estimated trees for 1931 trees can be separated into their type of citrus by using their 1946 weights of trees, and thus estimate volume and value of citrus production in 1931 as shown below. The growth of trees from 1931 to 1946 is annualized at 3.35% per annum, and assumed to represent the growth of citrus trees for the whole 1921 – 1938 period and annual estimated of production are created. Thus prior to 1921 volume of citrus fruit is declining by 3.35% and after 1931 the volume of citrus fruit is increasing by 3.35%


Table 3

Type of Citrus Tree

1931

1946

Citrus Production 1946

Yield of Citrus products in 1946 (no. per tree)

Estimated Production in 1931

Price of Citrus 1938 (£ per fruit)

Value of Citrus Production (constant 1938 prices)

Oranges

544209

892677

87945000

99

53614533

0.001121103

60107

Valencia Oranges

20155

33061

2258000

68

1376546

0.001121103

1543

Grapefruit

36327

59588

6116000

103

3728535

0.002776392

10352

Bitter Oranges

20634

33847

2045000

60

1246684

0.001121103

1398

Mandarins

23675

38835

2045000

53

1246694

0.000645761

805

Sour Lemons

100149

164277

34400000

209

20971442.14

0.000747652

15679

Sweet Limes

4273

7008

637000

91

388399

0.000747652

290

Total

749422

1229293

135446000

683

82572834

0.008281

90175


Such a method creates problems, despite the estimates having as a basis actual Cypriot irrigation data from 1931 and 1946. Compared to citrus estimates of 1927 and 1928 in the 1928 the estimate is over inflated by 26.8%. Some evidence seems to indicate that the number of citrus trees estimated is plausible: a report of 1946 states that the number of all fruit trees (excluding olives and carobs) in 1931 was 1493300, while the estimate for 1931 estimated that just the orange trees were 749422 (50.1%). This enforces the view that the estimate of trees could be plausible since citrus trees where by far the most important fruit tree in Cyprus.


The estimate is unsatisfactory but the best possible considering the lack of primary data. There are a number of reasons serious problems: irrigation might not have grown at a smooth annual rate; the share of citrus trees in the perennially irrigated area could have been less in 1931 than in 1946; the number of trees per acre might have been less prior to 1946; the yield per tree reported in 1946 could have been unrepresentative for 1921 – 1938; the product mix of citrus trees might have been very different in 1921; the majority of citrus expansion could have occurred in the period 1939 – 1946 thus overestimating the yearly growth of citrus production for the period 1921 - 1946.


The estimates for citrus production also impose a linear relation that is simply not representative. Further research is necessary especially in irrigation and the yearly yields of citrus trees8. Pitcairn in the Cyprus agricultural journal in 1936 estimated the irrigated area under citrus in 1935 as 11700, just 13 donums higher than the 1931 census estimate, possibly indicating a much slower growth of acreage under irrigation before 19359. However it is possible that Pitcairn was quoting the 1931 census results of citrus products that were not published in 1931. This would reinforce the suitability of the citrus production estimate as estimated above as the estimated acres under citrus orchards is close to the 1931 reported acreage.


Most worryingly is that the estimate follows a yearly annual growth which is unrepresentative of the extremely variable situation of Cypriot agriculture at the time; the estimate fails to capture the real yearly growth trend. This would be particularly problematic for researchers who would use the results to judge business cycles: part of the agricultural statistics are based on constant growth models and would not be suitable for pinpointing ups and down for the economy.


The Ugly: Animal Production in Cyprus; Milk Production in Malta

The data sources used for the estimation of animal products are all circumstantial; except for the yearly enumeration of animals, there were no slaughterhouse statistics that were representative of the island as a whole. Cyprus data on animals slaughtered were limited for a short span of years to some urban areas of this very rural island. It was decided to construct a model of meat production, and relegate the limited evidence of actual slaughtering as a check for plausibility.


Thus model was based on agricultural studies published during the period as well as detailed agricultural analysis presented in the quarterly journal of the department of Agriculture10. Where more information was needed post-Second World War sources were consulted and revised downwards in order to attempt to simulate the pre-War conditions. The model constructed for Cyprus meat production enabled the estimation for skin, milk and wool and was subsequently used to estimate milk and wool production of Malta.


Sheep and Goat products were based on the yearly enumeration of livestock, which enumerated every animal over one year old. The annual rate of change of animals was combined with the net exports of sheep and goats to estimate the yearly increase / decrease of the stock. Using evidence from historical and contemporary sources on the aggregate ratio of males to females in the population was estimated and a reproduction transformation coefficient was assigned to the females of the previous year (yt-1), thus estimating the total number of young Lambs / Kids born in year t. Both the ratio of males to females and the reproduction coefficient were assumed to be constant.


The reproduction coefficient was based on sources on animal births, animal infant mortality and miscarriages11. The aggregate flock of animals was assigned a constant death / culling ratio. By adding the number of animals that died to the difference between the animals in year t in relation to year t-1 and the net exports of animals, the number of Lambs / Kids maintained to make up the flock in year t was estimated. It was assumed that the remaining births were fed only until they reached a certain weight and where killed for their meat and skin before the next enumeration of livestock took place. Constant volume transformation coefficients were assigned to slaughtered adults and young to estimate the production of sheep and goat meat and skin. Milk production was estimated based on a constant transformation coefficient based on the female animals over 1 years old.


This method of estimation can only provide very rough approximation of meat, skin and milk output. A serious weakness of the model is that it assumes that births, deaths and the ratio of females of the flock are constant over the time period. This leads to an overestimation of animal products during a periods of draught / scarcity of fodder, while it underestimates production as animal hygiene and vaccination became widespread. The constant transformation coefficients for milk, meat and skin do not take into account the wastage of the animals during periods of drought; thus some of the animals slaughtered / milked during the drought period of 1931 – 1932 would have been emaciated and thus produced less meat and milk12. The estimates for animal production for Cyprus (and milk production for Malta) essentially vary with the amount of livestock enumerated, and not due to demand for animal products, weather, animal husbandry, nutrition, animal hygiene or change of tastes of the consumer.





Table 4: Model for Estimating Meat, Skin, Wool and Milk Production of Sheep and Goats

No

Explanation

Notation

Source

(1)

Number of animals Yt

(1) = Yt

Blue Book Yt

(2)

Number of animals Yt-1

(2) = Y(t-1)

Blue Book Yt-1

(3)

Gross increase / decrease

(3) = Yt – Y(t-1)

(3) = (1) – (2)

(4)

Ratio of males to flock

(4) = Rm

Cyprus Agricultural Census (1977); Bevan (1918); Kostellenos et al (2007)

(5)

Number of Males Yt-1

(5) = Y(t-1)*Rm

(5) = (2) * (4)

(6)

Number of Females Yt-1

(6) = Y(t-1)*(1 – Rm)

(6) = (2) * (1 – (4)

(7)

Reproduction Transformation Coefficient

(7) = B

Maule Sheuki, Cyprus Agricultural Journal (1935); J P Maule, Cyprus Agricultural Journal (1938) Constantinou (1981)

(8)

Total Lamb / Kids born

(8) = B * (Y(t-1)*(1 –Rm)

(8) = (7) * (6)

(9)

Survivors from Natural Deaths / Disease / Culling of Yt-1 population

(9) = S

Maule Sheuki, Cyprus Agricultural Journal (1935); Moylan Gambles, Cyprus Agricultural Journal (1936)

(10)

Number of Lost Animals during Yt

(10) = Y(t-1)*S

(10) = (2) * (8)

(11)

Net exports Yt

(11) = Xt

Cyprus Blue Book 1938

(12)

Number of Lambs / Kids to make the Yt population and Net Exports Xt

(12) = (Yt – Y(t-1)) + (Y(t-1)*S) + Xt

(12) = (3) + (9) + (11)

(13)

Number of Lambs / Kids for born to be used for meat / skin

(13) = [B * [Y(t-1)*(1 –Rm)]] – [(Yt – Y(t-1)) + (Y(t-1)*S) + Xt]

(13) = (8) – (12)

(14)

Number of Adult Animals culled for meat

(14) = (Y(t-1)*S )/2

Maule Sheuki, Cyprus Agricultural Journal (1935)

(15)

Net number of animals killed for meat and skin

(15) = [[B * [Y(t-1)*(1 –Rm)]] – [(Yt – Y(t-1)) + (Y(t-1)*S) + Xt]] + [(Y(t-1)*S )/2]

(15) = (13) + (14)

(16)

Adult Meat per Carcass in kg

(16) = Ma

Γεώργιος Κωστελένος, et al, (2007); pp.50 - 51 (1914 - 1940)

(17)

Lamb / Kid Meat per Carcass in kg

(17) = My

Γεώργιος Κωστελένος, et al, (2007); pp.50 - 51 (1914 - 1940)

(18)

Total meat produced in kg

(18) = [[B * [Y(t-1)*(1 –Rm)]] – [(Yt – Y(t-1)) + (Y(t-1)*S) + Xt]* My] + [[(Y(t-1)*S )/2]* Ma]

(18) = [[(13) * (17)] + [(14) * (16)]

(19)

Av. Wool per surviving adult male (Kg.)

(19) = Wm

Maule Sheuki, Cyprus Agricultural Journal (1935); Cypriot Goats are of a short hair variety - adjusted downwards based on Greek data

(20)

Av. Wool per Surviving adult female (Kg.)

(20) = Wf

Maule Sheuki, Cyprus Agricultural Journal (1935); Cypriot Goats are of a short hair variety - adjusted downwards based on Greek data

(21)

Total Estimated Wool (Kg.)

(21) = [[[Yt –[(Yt – Y(t-1)) + (Y(t-1)*S) + Xt]]*(1 - Rm)]* Wf] + [[[Yt –[(Yt – Y(t-1)) + (Y(t-1)*S) + Xt]]*Rm]* Wm]

(21) = [[(1) – (12)] * [1 – (4)]] *(20) + [[(1) – (12)] *(4)] * (19)]

(22)

Adult hide weight per Slaughtered Animal (kg.)

(22) = Ha

Γεώργιος Κωστελένος, et al, (2007); pp.50 - 51 (1914 - 1940)

(23)

Lamb / Kid hide weight per Slaughtered Animal (kg.)

(23) = Hy

Γεώργιος Κωστελένος, et al, (2007); pp.50 - 51 (1914 - 1940)

(24)

Total Skin Produced kg

(24) = [[(Y(t-1)*S )/2]* Ha] + [[[B * [Y(t-1)*(1 –Rm)]] – [(Yt – Y(t-1)) + (Y(t-1)*S) + Xt]] * Hy]

(24) = [(14)* (22)] + [(13)*(23)]

(25)

Milk per Surviving Adult (Kg.)

(25) = Mf

Cyprus Agricultural Journal (1932 - 1938); adjusted downwards based on Greek data

(26)

Total Estimated Milk

(26) = [[[Yt –[(Yt – Y(t-1)) + (Y(t-1)*S) + Xt]]*(1 - Rm)]* Mf]

(26) = [[(1) * (12) * (1 – 4)] *(25)]



The Cypriot meat production as estimated by the model provides similar results to the information given in the 1946 agricultural census, which was not used to build up the model. The census states that the annual slaughter of 80000 adult Sheep and Goats and 250000 Lambs / Kids for meat. Results for 1938 estimate 76507 adult beasts and 232825 Lambs / Kids slaughtered for meat13. The fact the 1938 estimate is similar while using different sources of information than the 1946 census ads validity to the estimates. The 1938 estimate and the 1946 census also produce similar results in terms of flock composition. Flock composition is important to represent the flock composition of the time as the estimate rely on constant ratios of male and females within the aggregate flock; if the ratio of male to females in the flock, or the ratio of retained young is not correct the model then will produce spurious rather than plausible results. The constant ratios of males to total adult population are 0.04 for sheep, 0.065 for goats14. The 1946 census ratio for rams is 0.032 and 0.071 for male goats. Although there is a difference between the models constant ratio and the 1946 census the difference is not large; using 1946 ratios the total sheep and goat meat production increased by 9092 kg or £817 pounds, which is less than 1% of the combined gross output value of sheep and goat meat. The proportion of young animals as a proportion of the flock, which provide the replacement ratio of the flock are also very similar: in 1946 young animals represented 20% of sheep and goats while the 1938 estimate was 21.6%.


The estimates of animal production were also checked with the limited data on municipal slaughter houses15. In order to calculate meat production for the whole 1921 – 1938 period the average per capita production of meat for 1938 was assumed to be constant, and then was combined with the intercencal yearly estimates of population.


Table 5

Title

Estimated Animals Slaughtered 1938

(1)

Enumerated Animals Slaughtered in urban area (17.37% of total Population)

(2)

Estimated Animals based in expanding results of urban area (100% of population)

(3)

Difference of estimated and urban area extrapolation

(1) – (3)

Sheep and Lambs Slaughtered

166738

67676

389614

-222876

Goat and Kids Slaughtered

142595

19222

110662

31933

Total Number of Animals Slaughtered

371529

92409

532003

-160474

Total Volume of meat (kg.)

4629548

1552977

8940571

-4311023

Volume of meat per capita

11.65

22.5

22.5

-10.65

Value of Meat (£)

293181

102096

587772

-294591


The slaughterhouse extrapolation for the whole population can be considered as estimate maximums; since the slaughter houses served urban areas that were on average wealthier that rural areas, the consumption of meat is probably less in the rural area of Cyprus than the estimate entails. The returns from the slaughterhouses argue that my estimate is too conservative: both animals being killed and the meat that is extracted out of each animal was underestimated. The estimate also seems to underestimate the wholesale price. As a result the animal slaughter value is double my own 1938 estimate. However the slaughter estimate has problems of its own. The municipal slaughter houses might have been catering for a much wider section of the demand for meat than just the urban population. Thus the share of the population of the cities with municipal slaughterhouses is not representative to the amount of livestock slaughtered there.


Conclusion:

Rather surprisingly the conclusion is optimistic; despite the crude way of estimating citrus and animal production in Cyprus the estimate is still relatively reliable on the aggregate. In 1938 the weight of citrus production in the total Agriculture, Forestry and Fishing sector is just 4%; the weight of animal production is 25.6%. Thus in order to miss estimate the total gross output of the sector by 5% one needs to misestimate animal production by 20%. Even if the estimate for grapes is 100% higher or lower the total effect on the gross output of agriculture is only 4%. Considering that Agriculture is just 50% of the Gross Domestic Output then the possibilities of large errors do not translate to gross errors in terms of GDP output. Thus the researcher, being aware of the limitation of his data sources, can guestimate so long as the error band of any poorly substantiated estimate does not jeopardize the reliability of his final results. However the necessity of using ad-hoc procedures should lead to caution by to researchers using the data. Historical GDP calculations should not be broken down on a too disaggregate a level, or used to try and pinpoint levels or cycles too precisely.

1Jan-Pieter Smits, “Measuring the ‘Wealth and Poverty of Nations’: Methodological Problems and Possible Solutions” IEHC Helsinki, Session 103: New Experiences with Historical National Accounts, (May 2006); Most researchers base their historical national accounts on a version of SNA or ESA; however basing one’s research in a framework that seeks to better encapsulate the modern economy can create problems. In my experience basing my categorisation of products in the new Eurostat nomenclature (NACE rev.2) led to problems due to the complete elimination of ancillary activities to agriculture from the agricultural sector, necessitating in the creation of an additional category in the nomenclature.

2 D. A. Percival, Cyprus, Census of Population and Agriculture 1946: Report and Tables (Nicosia, GPO, 1947), p.56

3 Source: Malta, Annual Report of the Office of Agriculture, 1921 – 1922 to 1937 – 1938; The reports introduce a timing issue as they were completed 6 to 2 months before the end of the calendar year.

4 H. M. James, and C. Koumides, “An Analysis of Farming Costs in Cyprus”, The Cyprus Agricultural Journal Vol. XXXIV (1939), Part. 2 and Part.3; Brewster Joseph Surridge, A Survey of Rural Life in Cyprus, (Nicosia: GPO, 1930)

5 Source: National Archives, Cyprus Files V52 / V 53

6 The estimation of output and number of trees are slightly different between the Blue Book and the 1946 Census (0.7%). The Blue Book results are based on a survey of an area under cultivation while the Census results are based on questionnaires given to agricultural producers. Source: Percival, D. A. Census of Population and Agriculture 1946 (Nicosia: GPO, 1947?) and Cyprus Blue Book for the year 1946 (Nicosia: GPO, 1947)

7 Hart-Davis, C. H., Report and General Abstracts of the Census of 1931 (Nicosia: F. S. Passingham, 1932) and Percival, D. A. Census of Population and Agriculture 1946 (Nicosia: GPO, 1947?)

8 Published sources on irrigation are not helpful in providing additional estimates on irrigation and the product mix of irrigated lands: Ellis, W. M., Report on Improving irrigation works in Cyprus (Nicosia: GPO, 1922); Raeburn, C. water Supply in Cyprus: A general report (2nd ed.) (Nicosia: GPO, 1945)

9 Pitcairn, A., “Irrigation of Cyprus” Cyprus Agricultural Journal, p.43

10 The Cyprus Agricultural Journal (which was also known before 1918 as the Cyprus Journal) was published quarterly by the department of agriculture, and contains useful information on Cyprus agriculture

11 The author is using contemporary sources from the period 1938 – 1921 on reproduction of sheep and goats and reduced downwards using modern resources on miscarriages, failed births and infant mortality, augmented upwards to take into account the reduced health and hygiene during the 1938 – 1921 period: Maule, J P, “The Breeding and Management of Sheep in Cyprus”, The Cyprus Agricultural Journal, December, Part 4, Vol. XXX (1935) p.88; “The Milk Yield of the Maltese and Native Goats”, The Cyprus Agricultural Journal, December, Part 4, Vol. XXXIII (1938); Constantinou, A, Ruminant Livestock Genetic Resources in Cyprus, (unpublished, 1981)

12 “Introduction”, The Cyprus Agricultural Journal, volume XXVII, Part.1 (1932); “Introduction”, The Cyprus Agricultural Journal, volume XXVII, Part.2 (1932);

13 Percival, D. A. Census of Population and Agriculture 1946 (Nicosia: GPO, 1947?) p.82

14 The constant ratio for cattle is not included as it was calculated based on the 1946 census.

15 Cyprus, Annual report of the director of agriculture for the year 1938 (Nicosia, GPO. 1939) p.24; Based on the population projection estimated, the 1938 population of the four cities was estimated at 17.37% of the total population