Household Production and Consumption in Finland 2001

1 Household satellite account: needs
and applications
The Household Satellite Account describes the volume, type and monetary
value of goods and services produced by households for their own use. The
results are presented in a format that allows for easy comparison with figures in
the national accounts. This means they can be used in analyses that cover the
whole economy, including household production (Household production…
2003).
The integration of household production into the national accounts helps
us to shed light on the extent of household production in relation to market
production; the volume of household production as a proportion of the total
supply of services and goods; and on total household consumption.
In the longer term, once time series are available on household production,
we will be able to analyse the interplay between market production and
household production and their relative changes. This will shed light on how
new market and social innovations impact the production of households, what
kinds of products move out into the marketplace and accordingly what kind of
production is taken on by households. Furthermore, we will be able to study
the impacts of these shifts in different types of households and in different
socio-economic classes.
Extended national accounts that incorporate household production will
also facilitate comparisons of economic development over time. After all, part
of the changes seen in GDP are simply due to the fact that part of the work
done in households has shifted to the markets and vice versa. Accounting
allows for long-term economic analyses of real economic growth, productivity,
income distribution and fixed capital formation. Time series provide also the
possibility to examine shifts occurring between households and markets in
different business cycles.
The amount of production that remains outside the national accounts
varies from one country to the next, owing to differences in the stage of
market economy development and family policy measures. The overall
long-term trend has seen a shift in emphasis towards market production,
among other things as a result of women taking on full-time employment
outside the home. This has spurred GDP growth, although partly this is an
indication of a shift in production from the informal to the formal economy
(Taimio 1991, Varjonen & Varjonen 2003). Access to figures on the value of
household production and its contribution to the economy will also facilitate
comparisons of national economies. This, however, will require harmonised,
transparent methods of calculation that can be applicable in all countries
(Household production… 2003).
Furthermore, the Satellite Account can provide information on financial
planning in households and families as well as on the various welfare decisions
they make during their life cycle, for example on household consumption and
investment and on the substitution of own labour for market-produced goods.
The results also have direct application in such areas as family, equality and
labour policy (see Landefeld and McCulla 2000).
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