Household Production and Consumption in Finland 2001
Household Production and Consumption in Finland 2001
Household Production and Consumption in Finland 2001
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million euros<br />
From household sector accounts<br />
<strong>Household</strong> consumption expenditure 65 031<br />
+ general government <strong>in</strong>dividual consumption expenditure 18 436<br />
+ non-profit <strong>in</strong>stitutions’ consumption expenditure 2 886<br />
= Individual consumption expenditure<br />
(“actual” <strong>in</strong>dividual consumption) 86 353<br />
From non-SNA household production<br />
+ value of output (household production<br />
81 588 less its SNA component 12 730) 68 858<br />
– <strong>in</strong>termediate consumption 14 312<br />
– gross fixed capital formation 3 828<br />
= Extended household consumption 137 071<br />
Extended household consumption is one <strong>and</strong> a half times greater than SNA<br />
consumption. It is noteworthy that <strong>in</strong> this calculation, the value of products<br />
produced by households (i.e. f<strong>in</strong>al consumption products) does not <strong>in</strong>clude<br />
value added tax, which <strong>in</strong> turn is <strong>in</strong>cluded <strong>in</strong> <strong>in</strong>dividual consumption figures <strong>in</strong><br />
the national accounts.<br />
Accord<strong>in</strong>g to the national accounts, consumption expenditure has steadily<br />
<strong>in</strong>creased. Growth figures for extended consumption are probably somewhat<br />
lower. The reason for this is that when households purchase market services<br />
<strong>in</strong>stead of rely<strong>in</strong>g on their own production, for <strong>in</strong>stance go out for a meal<br />
<strong>in</strong>stead of cook<strong>in</strong>g themselves, there is no change <strong>in</strong> consumption itself; only<br />
the producer changes. S<strong>in</strong>ce <strong>2001</strong>, it is estimated that the use of purchased<br />
services as substitutes for household production has <strong>in</strong>creased considerably.<br />
The <strong>in</strong>troduction of a new tax deduction for household services <strong>and</strong> domestic<br />
work <strong>in</strong> 2003 has attracted more producers <strong>in</strong>to the market <strong>and</strong> <strong>in</strong>creased the<br />
dem<strong>and</strong> for services (Niilola et al. 2005). The impacts of this development on<br />
consumption as well as on the value added from production can only be<br />
assessed once results are available from the next household satellite accounts.<br />
Sav<strong>in</strong>g <strong>and</strong> gross fixed capital formation<br />
When consumption is subtracted from household disposable <strong>in</strong>come, the<br />
rema<strong>in</strong>der shows the amount of sav<strong>in</strong>g. <strong>Household</strong> production for own use<br />
impacts both the household’s disposable <strong>in</strong>come <strong>and</strong> consumption, <strong>and</strong> by the<br />
same token its sav<strong>in</strong>g. When household production is calculated via costs,<br />
household consumption cannot exceed the production of goods for own use.<br />
The <strong>in</strong>crease <strong>in</strong> sav<strong>in</strong>gs compared to core national accounts is expla<strong>in</strong>ed by the<br />
fact that the goods used as <strong>in</strong>vestments <strong>in</strong> household production are classified<br />
<strong>in</strong> the core national accounts as f<strong>in</strong>al consumption goods, but <strong>in</strong> the satellite<br />
account they are transferred from consumption to gross fixed capital<br />
formation.<br />
National Consumer Research Centre Statistics F<strong>in</strong>l<strong>and</strong> 65