Household Production and Consumption in Finland 2001

Taxes and subsidies on production
Only a small proportion of charges paid by households to the public sector are
related to their productive activities. Examples of such charges include the
annual vehicle tax, real estate tax, dog tax and various fishing and hunting
licence fees.
Among the production-related subsidies received by households from the
public sector are the child homecare allowance and family nursing support.
These subsidies are paid “as a consequence of engaging in production”
(European System of Accounts, ESA 1995, 4.36). Figures on these items have
been obtained from Statistics Finland. Parents’ allowance was also included
among subsidies on production because it is paid to parents so that they can
look after their child or children at home rather than taking them to day care.
The data on parents’ allowance are from the Ministry of Social Affairs and
Health. No figures were available on care allowances for the disabled in
distinction from child home care allowances. Therefore they were excluded
from the Household Satellite Account.
The purpose of subsidies and allowances is to reduce production costs.
When the value of output is calculated on a cost basis, subsidies are deducted
for the calculation of net value added. Value added is thus obtained at factor
cost and equivalent to the valuation used for market production.
Integration with other accounts
The financial significance of household production to households themselves
can be demonstrated by calculating their “extended individual consumption”
and “extended disposable income”. The terminology is not yet completely
established, but it seems that the international literature is leaning towards the
term “extended” for purposes of showing that household production figures
have been added to the accounts (Goldschmidt-Clermont &
Pagnossin-Aligisakis 1995, Household production… 2003, Ironmonger 2003).
Ultimately what these terms are about is that services produced in households
are consumed within those same households and therefore they also increase
household consumption. Accordingly, households produce imputed income
for themselves by doing it themselves rather than by buying from the
marketplace. Savings figures also change from those shown in the national
accounts primarily because household capital goods are transferred from
consumption to investment. Saving is defined as the part of disposable income
that is not used up in final consumption, so this transfer pushes up the share of
saving (see Chapter 7, Appendix 9).
National Consumer Research Centre Statistics Finland 23