ABSTRACT
In the estimation of an efficiency price domestic resource cost (DRC), all inputs must be valued at their opportunity cost or shadow prices. The non-traded sectors considered are electricity, construction, water works, transport and communication services, real estate, finance and insurance, distribution and other services. The non-traded goods have to be valued indirectly at trade opportunity cost. Conversion factors are required to revalue these costs in the computation of a shadow price DRC. Traded inputs have to be adjusted by appropriate conversion factors. It is assumed that for input purchases, import duties alone explain the divergence between border prices and domestic prices. It is further assumed that traded inputs fall into either fuel or other intermediate goods. In the matrix, there are coefficients for non produced input purchases and transfer payments made per unit of non-traded output which must be revalued accordingly. These usually include payments for imports, indirect taxes, wages and salaries, depreciation and operating surplus.
