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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7 Integrat<strong>in</strong>g household production<br />
<strong>in</strong>to the national accounts<br />
The basic idea of the <strong>Household</strong> Satellite Account is to calculate a monetary<br />
value for household production <strong>and</strong> to make it visible <strong>in</strong> economic terms.<br />
Further, the idea is to produce a module, a separate account that, if <strong>and</strong> where<br />
necessary, can be <strong>in</strong>tegrated with the national accounts. The <strong>in</strong>tegration of<br />
these different accounts will produce an extended account that describes the<br />
whole economy. Time series on this extended economy offer a different<br />
picture of economic development compared to the core accounts. Accord<strong>in</strong>g<br />
to research by Professor Duncan Ironmonger, household production <strong>and</strong><br />
market production serve as buffers for each other so that dur<strong>in</strong>g strong<br />
bus<strong>in</strong>ess cycles <strong>and</strong> <strong>in</strong>creas<strong>in</strong>g market production, household production will<br />
tend to recede; <strong>and</strong> dur<strong>in</strong>g weak bus<strong>in</strong>ess cycles, the opposite is true.<br />
Accord<strong>in</strong>g to Ironmonger the ratio is not quite 1:1, but the factor value is<br />
around 0.8 (Ironmonger & Soupournas 2003). As yet no economic time series<br />
are available <strong>in</strong> F<strong>in</strong>l<strong>and</strong> that cut across different bus<strong>in</strong>ess cycles.<br />
In the long term economies are affected not only by cyclical fluctuations,<br />
but also structural changes. <strong>Production</strong> shifts from one sector to another.<br />
These shifts may vary <strong>in</strong> direction <strong>and</strong> <strong>in</strong>tensity at different stages of market<br />
economy development. It is widely agreed that the ma<strong>in</strong> trend is for<br />
production to shift from the household sector to the market economy, but it is<br />
possible that estimates have been exaggerated. There is also movement <strong>in</strong> the<br />
opposite direction, from the public <strong>and</strong> private sector to households, which<br />
may not have been fully recognized. At least it may be said that strong bus<strong>in</strong>ess<br />
development requires <strong>in</strong>creased production <strong>in</strong> the household sector, too. One<br />
example is provided by the <strong>in</strong>creased amount of time spent by households <strong>in</strong><br />
the acquisition of goods <strong>and</strong> services (Varjonen & Aalto 2005).<br />
In the discussion that follows, household production is <strong>in</strong>tegrated with the<br />
household sector accounts of the national accounts <strong>and</strong> with parts of the whole<br />
system of accounts. All the figures are for <strong>2001</strong>. 9<br />
7.1 Integration with household sector accounts<br />
We beg<strong>in</strong> by <strong>in</strong>tegrat<strong>in</strong>g household production with the household sector<br />
accounts <strong>in</strong> the system of national accounts. The sequence of household<br />
accounts is presented <strong>in</strong> detail <strong>in</strong> Tables 1 <strong>and</strong> 2 of Appendix 9. One factor<br />
that somewhat complicates the <strong>in</strong>tegration is that part of household<br />
production (13%) is already <strong>in</strong>cluded <strong>in</strong> the national accounts. To avoid<br />
duplicate count<strong>in</strong>g, a column has been added to the <strong>in</strong>tegrated tables under<br />
the head<strong>in</strong>g: Adjustments (SNA – non-SNA). In the production account,<br />
generation of <strong>in</strong>come account <strong>and</strong> capital account deductions are entered <strong>in</strong><br />
9 The FISIM (F<strong>in</strong>ancial Intermediation Services Indirectly Measured) methodological revisions<br />
made to the national accounts <strong>in</strong> summer 2005 have not been taken <strong>in</strong>to account. Therefore<br />
the figures describe the situation <strong>in</strong> spr<strong>in</strong>g 2005.<br />
62 Statistics F<strong>in</strong>l<strong>and</strong> National Consumer Research Centre