Transcript Statistical activities on household economic resources

THE VALUE ADDED OF ANALYSING
HOUSEHOLDS?
The Accounts of Society
Luxembourg, June 12 – 13, 2014
Peter van de Ven
Head of National Accounts
OECD
Introduction
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Stigliz-Sen-Fitoussi Report (initiative of Sarkozy)
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Presented in September 2009
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Basically an inventory and evaluation of state of the art
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Three pillars:
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Alternative indicators from national accounts (5
recommendations)
Quality of life (5 recommendations)
Sustainability (2 recommendations)
Several other (national) initiatives: “GDP and beyond”;
OECD Better Life Index
Introduction
Five recommendations related to the System of National
Accounts:
1.
When evaluating material well-being, look at income
and consumption rather than production
2.
Emphasize the household perspective
3.
Consider income and consumption jointly with wealth
4.
Give more prominence to the distribution of income,
consumption and wealth
5.
Broaden income measures to non-market activities
Households in national accounts
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National Accounts is more than economic growth, and
also more than Y = C + I + E – M
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Full overview of income, expenditures, financial
transactions and balance sheets by institutional sector
(households, government, corporations, rest of the
world)
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Households: disposable income, final consumption,
savings, wealth, etc. (including details)
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Adjusted disposable income = disposable income +
goods and services provided free or at reduced prices
by government (e.g. health, education)
Households in national accounts
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However, public and political attention goes almost
entirely to economic growth!
How to change this?
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Put more emphasis on other indicators in communication
(e.g. press release on household disposable income)
Show and analyse differences between economic growth
and disposable income
Include and publish distributional information
Prerequisite: timely availability of relevant data (at
macro-level generally fine, certainly in Europe, but
generally no timely data on inequalities within
households)
Does it matter a lot? Does it change the perspective?
Five SSF-recommendations
Five recommendations related to the System of National
Accounts:
1.
When evaluating material well-being, look at income
and consumption rather than production
2.
Emphasize the household perspective
3.
Consider income and consumption jointly with wealth
4.
Give more prominence to the distribution of income,
consumption and wealth
5.
Broaden income measures to non-market activities
International comparison of GDP and
Household Adjusted Disposable Income
200.0
180.0
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
GDP current PPPs per head, index to USA=100
Adjusted disposable income current PPPs per head, index to USA=100
Economic Growth and Household
Adjusted Disposable Income
EURO AREA
GDP
Adjusted disposable income
135
130
125
120
115
110
105
100
95
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
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Short evaluation
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International comparison: quite different picture
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Trend growth of economic growth and household
(adjusted) disposable income closely aligned, except
under some quite specific circumstances
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Short term developments may be quite different
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Probably more important to look at developments of
mean income (instead of average income), as it also
partly reflects changes in the distribution of income
Five SSF-recommendations
Five recommendations related to the System of National
Accounts:
1.
When evaluating material well-being, look at income
and consumption rather than production
2.
Emphasize the household perspective
3.
Consider income and consumption jointly with wealth
4.
Give more prominence to the distribution of income,
consumption and wealth
5.
Broaden income measures to non-market activities
Balance sheets for households
• Better information on balance sheets for households
important for analysis of sustainability, vulnerabilities
and possible asset price bubbles
• Information on financial assets and liabilities usually
available, also on quarterly basis
• Main problems related to non-produced non-financial
assets (e.g. land, or total value of land and dwellings)
– Eurostat/OECD Task Force on Land and Other Non-financial
Assets
– Residential Property Price Indices
– More generally, much more interest in balance sheets
Debt to Income of households across
countries
Five SSF-recommendations
Five recommendations related to the System of National
Accounts:
1.
When evaluating material well-being, look at income
and consumption rather than production
2.
Emphasize the household perspective
3.
Consider income and consumption jointly with wealth
4.
Give more prominence to the distribution of income,
consumption and wealth
5.
Broaden income measures to non-market activities
Inequalities
The importance of looking at income inequalities
Source: OECD data base; Country scope: XXX
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Source: OECD Income Distribution Database, latest year available
Large differences between countries
Longer-term trend towards greater inequality
Early evidence: small changes in income inequality in the most recent year
(2009-2011) since 2007
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Vulnerabilities
The importance of looking at wealth distribution
Percentage of households holding debt
Debt to income ratio of indebted households
Sources: CIR, EFF2008 (Spain), IBF 2008 (Italy), SCF 2007 (US)
Sources: EFF 2002 (Spain), SCF 2001 (US), SHIW 2002 (Italy), BHPS 2000 (UK)
• Analysing wealth distribution is essential for analysis of
vulnerabilities in the household sector
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OECD-activities on inequalities
Main objectives:
• Development of proper framework for collecting
micro-data on households (proper definitional
framework on wealth; consistency between data for
income, consumption and wealth)
• Achieving consistency between micro-data and
national accounts estimates (present data complicate
analysis of macro-economic developments including
analysis of (developments in) distribution of income,
consumption and wealth
• Timely availability of data on inequalities
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OECD-activities on inequalities
• OECD Expert Group on Micro statistics on Household
Income, Consumption and Wealth (EG ICW)
– Methodological work to improve the distributional information
available from micro sources in the future, in particular on wealth
– 17 NSOs, Luxembourg Wealth Study, UNECE, individual analysts,
ECB, Eurostat
• OECD-Eurostat Expert Group to measure Disparities in a
National Account framework (EG DNA)
– Practical exercise – feasibility study on how to introduce
distributional information from existing micro sources in national
accounts
– 25 NSOs, Luxembourg Income Study, ECB, Eurostat
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EG Micro-statistics (ICW)
• OECD Guidelines on Household Wealth:
www.oecd.org/statistics/guidelines-for-micro-statistics-onhousehold-wealth.htm
• Report on Integrated Framework for Income, Consumption
and Wealth:
www.oecd.org/statistics/ICW-Framework.htm
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EG Disparities National Accounts (DNA)
Two Working Papers:
• Comparison of micro and macro sources (definitions,
scope, and results) for household income (20 countries),
consumption (21), and wealth (7)
• Experimental disparity indicators across household
groups, consistent with national accounts; indicators
fully/partially computed for income, consumption and
savings (16 countries)
In addition: Eurostat “a-minima exercise”
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EG Disparities National Accounts (DNA)
• Goal: to arrive at distributional information consistent with
national accounts for three types of household groupings:
– By income quintile
– By type of income (employees, self-employed, social
benefits)
– By composition of household (single person <> 65,
multiple persons with/without children <> 65)
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EG DNA: Main results
 Average gap macro/micro for household income, consumption and wealth
80%
Components with similar micro information
70%
All components
60%
50%
40%
30%
20%
10%
0%
Adjusted disposable income
(20 countries)
Actual final consumption
(21 countries)
Net worth
(6 countries)
Ranges of values - average gap indicator measured on components with similar micro information:
Min: 5%
Max: 57%
Min: 16%
Max: 62%
Min: 7%
Max: 43%
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EG DNA: Main results
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Relative position of each household group: adjusted disposable income
per consumption unit compared to the average, by income quintile
3.5
France 2003
3.0
Italy 2008
Korea 2009
Mexico 2010
2.5
Netherlands 2008
New Zealand 2006-07
2.0
Slovenia 2008
United States 2010
1.5
1.0
0.5
0.0
Q1
Q2
Q3
Q4
Q5
EG DNA: Main results
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Relative position of each household group: actual final consumption per
consumption unit compared to the average, by income quintile
2.5
France 2003
Korea 2009
2.0
Mexico 2010
Netherlands 2008
New Zealand 2006-07
1.5
Slovenia 2008
United States 2010
1.0
0.5
0.0
Q1
Q2
Q3
Q4
Q5
EG DNA: Main results
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Savings as a percentage of adjusted disposable income, by income quintile
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EG DNA: Main results
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Ratio of richest to poorest (Q5/Q1): comparison between the EG results
and the OECD micro database (IDD)
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Income Distribution Database (IDD)
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EG - Adjusted disposable income per consumption unit
EG - Adjusted disposable income per consumption unit excluding "National Accounts concepts"
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15
10
5
0
Note 1: The legend indicates the extent to which the IDD and the EG results are comparable. A star indicates
similar micro sources. A year is indicated in case IDD and EG relate to the same year.
Note 2: Micro measures are based on a grouping by individuals, whereas the EG is based on households.
Inequalities: way forward
• Refine methodology on combining micro and macro
sources, with focus on consistency income and
consumption
• Compile data consistent with national accounts for a
more recent year
• Consider the possible development of a
methodology to compile more timely estimates of
levels and changes
• Providing possibilities to link, model and analyse macroeconomic policies and its impact on distribution of
income, consumption and wealth
• Note: Several activities by Eurostat, ECB and countries
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Short evaluation
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Lack of official, comparable and consistent statistics
on inequalities
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Work on inequalities considered as a major priority
within the OECD
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Addressing policy issues related to inclusiveness of
economic developments at a macro-level
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Primary importance given to having …
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more timely and more consistent estimates (first target:
9-12 months after the reference year)
more consistent data: between income, consumption and
wealth; and between micro and macro data
Five SSF-recommendations
Five recommendations related to the System of National
Accounts:
1.
When evaluating material well-being, look at income
and consumption rather than production
2.
Emphasize the household perspective
3.
Consider income and consumption jointly with wealth
4.
Give more prominence to the distribution of income,
consumption and wealth
5.
Broaden income measures to non-market activities
Non-market activities of households
• Production boundary of national accounts: exclusion of
unpaid services within households (and leisure time)
• Economic growth exaggerated?
• International comparability hampered?
• Issues:
• How to define and value the relevant services
• Relevance of national accounts for other purposes
• Valuation:
• Replacement costs
• Opportunity costs
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Non-market activities of households
Average hours spent on unpaid household work per person per day
in recent years
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Non-market activities of households
Value of labour costs in household production of non-market services, % of
GDP, 2008
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Non-market activities of households
GDP per capita with and without household consumption of non-market
services: 2008 PPPs (US = 100)
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Non-market activities of households
Impact on average annual GDP-growth (30 – 40 years)
Official
Replacement Opportunity
USA
3.1
2.7
2.3
Canada
2.7
2.4
2.1
UK
2.6
2.1
1.6
Netherlands
2.5
2.1
1.9
Norway
2.9
2.4
2.0
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Impact and evaluation of including
unpaid activities
• Analysts tend to think in terms of GDP only
• Inclusion of unpaid activities in the framework of national
accounts has considerable consequences:
• Not only change in GDP, but also in household disposable income
and final consumption
• Income concept will drift substantially further away from common
perceptions of income
• Awkward changes: someone becoming unemployed will probably
experience an increase in disposable income
• Hamper analysis of market economy
• Quality of short-term estimates (flash economic growth?)
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Some concluding remarks
• A lot of progress has been made, still a lot of work
needs to be done:
• Distribution of income, consumption and wealth
• Full balance sheets, including non-financial assets
• In some respects, emphasising households as the
“solution” for measuring (economic) well-being is
somewhat exaggerated
• Paraphrase on Einstein’s famous quote: “Not everything
that’s valuable can be valued, and not everything that
can be valued is valuable”
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Thanks for your attention!
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