Household Production and Consumption in Finland 2001

million euros
From household sector accounts
Household consumption expenditure 65 031
+ general government individual consumption expenditure 18 436
+ non-profit institutions’ consumption expenditure 2 886
= Individual consumption expenditure
(“actual” individual consumption) 86 353
From non-SNA household production
+ value of output (household production
81 588 less its SNA component 12 730) 68 858
– intermediate consumption 14 312
– gross fixed capital formation 3 828
= Extended household consumption 137 071
Extended household consumption is one and a half times greater than SNA
consumption. It is noteworthy that in this calculation, the value of products
produced by households (i.e. final consumption products) does not include
value added tax, which in turn is included in individual consumption figures in
the national accounts.
According to the national accounts, consumption expenditure has steadily
increased. Growth figures for extended consumption are probably somewhat
lower. The reason for this is that when households purchase market services
instead of relying on their own production, for instance go out for a meal
instead of cooking themselves, there is no change in consumption itself; only
the producer changes. Since 2001, it is estimated that the use of purchased
services as substitutes for household production has increased considerably.
The introduction of a new tax deduction for household services and domestic
work in 2003 has attracted more producers into the market and increased the
demand for services (Niilola et al. 2005). The impacts of this development on
consumption as well as on the value added from production can only be
assessed once results are available from the next household satellite accounts.
Saving and gross fixed capital formation
When consumption is subtracted from household disposable income, the
remainder shows the amount of saving. Household production for own use
impacts both the household’s disposable income and consumption, and by the
same token its saving. When household production is calculated via costs,
household consumption cannot exceed the production of goods for own use.
The increase in savings compared to core national accounts is explained by the
fact that the goods used as investments in household production are classified
in the core national accounts as final consumption goods, but in the satellite
account they are transferred from consumption to gross fixed capital
formation.
National Consumer Research Centre Statistics Finland 65