Workshop on Measuring Household Production, IATUR 2014 Conference, Turku 29 July 2014

1. Compiling the extended accounts for
households
Katri Soinne
Statistics Finland

2. Content
 Household production and households in SNA
 Balancing item
 Sequence of accounts and household production
 Calculation of household production (input method)
 Household sector accounts
 Extended household sector accounts
IATUR - Workshop on Household Satellite 29 July 2014

3. Sector accounts of households
vs. household production satellite
vs. extended household accounts
IATUR - Workshop on Household Satellite 29 July 2014
Household sector accounts (SNA)
Other household
activities than SNA
household production
Non-SNA
household
production
SNA
household
production
Extended household sector accounts
Household
production satellite

4. The Balancing Item
 Accounts balance out, either because of the definitions
used or because of the balancing item
 Balancing item is calculated based on existing information
and the theory of economics
carries the system forward
is an interesting indicator as such
 The balancing item of the previous account is the opening
resource of the next account
IATUR - Workshop on Household Satellite 29 July 2014

5. Uses
Previous account:
45
10
X
-----------------------
Next account:
20
Y
-----------------------
Resources
Previous account:
50
30
--------------------------
Next account:
X
15
--------------------------
IATUR - Workshop on Household Satellite 29 July 2014

6. Production account
Value added
Generation of income account
Operating surplus/ mixed income
Allocation of primary income account
Balance of primary incomes
Secondary distribution of income account
Disposable income
The use of disposable income account
Saving
Redistribution of income in kind account
Adjusted disposable income
The use of adjusted disposable income account
Saving
Capital account
Net lending (+) / borrowing (-)
Financial account
Net lending (+) / borrowing (-)
Opening
balance
sheet
Net worth
Other
changes in
volume
account
Changes in
volume of
assets
Re-
valuation
account
Nominal
holding
gains and
losses
Closing
balance
sheet
Net worth
Household
production
IATUR - Workshop on Household Satellite 29 July 2014

7. Household Production
 Household production in SNA: calculated as market
production (=> from top down, includes operating surplus/
mixed income)
 Non-SNA household production: calculated as non-market
production in the input method (=> from down to top, no
operating surplus/ mixed income)
 Includes production account and generation of income
account (=first of distribution and use of income accounts)
 Includes intermediate consumption, consumption of fixed
capital, compensation of employees, taxes and subsidies
IATUR - Workshop on Household Satellite 29 July 2014

8. Example of calculations: Pet care (2006)
 Not included in SNA production => calculated total as non-
market production (=operating surplus/ mixed income is 0)
 No subsidies on production in Finland
 So called “dog tax” is paid in part of the communities in
Finland => included in as a tax on production (7 million
euro)
 Compensation of employees = time used for pet care *
value of time (=salary; total 2 484 million euro)
 Consumption of fixed capital (pets and pet supplies are
included as gross fixed capital formation: 114 million euro)
IATUR - Workshop on Household Satellite 29 July 2014

9. Example of calculations: Pet care (cont’)
 Intermediate
consumption (pet food
and veterinary services;
409 million euro in
2006)
 Summing those figures
together: the total
output of pet care in
Finland in 2006 was
3014 million euro
IATUR - Workshop on Household Satellite 29 July 2014
0
500
1000
1500
2000
2500
3000
3500
Pet care
Value added, net (labour+taxes-subsidies)
Capital consumption
Intermediate consumption

10. Production account
Value added
Generation of income account
Operating surplus/ mixed income
Allocation of primary income account
Balance of primary incomes
Secondary distribution of income account
Disposable income
The use of disposable income account
Saving
Redistribution of income in kind account
Adjusted disposable income
The use of adjusted disposable income account
Saving
Capital account
Net lending (+) / borrowing (-)
Financial account
Net lending (+) / borrowing (-)
Opening
balance
sheet
Net worth
Other
changes in
volume
account
Changes in
volume of
assets
Re-
valuation
account
Nominal
holding
gains and
losses
Closing
balance
sheet
Net worth
Extended
household
accounts
IATUR - Workshop on Household Satellite 29 July 2014

11. The mechanics of accounts
IATUR - Workshop on Household Satellite 29 July 2014
Account
Uses/ liabilities Resources / assets
24 657
676 21
-22
678 (=resources) 678
• There is some information
available both on resources
(/assets) and uses (/liabilities)
from source data, one figure is
missing
• From the theory of
economics we know that
resources = uses
•The difference between
resources (/assets) and uses
(/liabilities) is the balancing
item (=the figure, which we do
not know otherwise)

12. Sector accounts for households in SNA (aggregated)
Production account (=> B1N) and generation of income
account (=> B.2N + B.3N)
Uses Resources
P.1 / R: Output 28 913
P.2 / K: Intermediate consumption 12 055
B.1G: Value added, gross 16 858
K.1 / K: Consumption of fixed
capital (=CFC)
6 242
B.1N: Value added, net 10 616
B.1N: Value added, net 10 616
D.1 / K: Compensation of
employees
956
D.29 / K : Taxes on production 15
D.39 / R: Subsidies on production -1 647
B.2N: Operating surplus + B.3N:
mixed income, net
11 292
IATUR - Workshop on Household Satellite 29 July 2014

13. Production and generation of income accounts
Uses Resources
P.1 / R: Output 28 913
P.2 / K: Intermediate
consumption
12 055
B.1G: Value added,
gross
16 858
K.1 / K: Consumption of
fixed capital (=CFC)
6 242
B.1N: Value added, net 10 616
B.1N: Value added, net 10 616
D.1 / K: Compensation of
employees
956
D.29 / K : Taxes on
production
15
D.39 / R: Subsidies on
production
-1 647
B.2N: Operating
surplus + B.3N: mixed
income, net
11 292
Rest of “current accounts” (=> B.9)
Uses Resources
B.2N: Operating surplus +B.3N: mixed
income, net
11 292
D.1 /R: Compensation of employees 80 981
D.4 / R: Property income 8 935
D.4 / K: Property income 2 363
B.5N: Balance of primary incomes. net 98 845
B.5: Balance of primary incomes, net 98 845
D.5…7 / R: Current transfers 29 357
D.5…7 / K: Current transfers 47 557
B.6: Disposable income 80 645
B.6: Disposable income 80 645
P.31 / K: Individual consumption expenditure 82 160
P.8 / R: Adjustment for the change in pension
entitlements
65
B.8: Saving -1 450
B.8: Saving -1 450
P.9 / R: Capital transfers (receivable) 251
P.9 7 K: Capital transfers (payable) 508
P.51 / K: Gross fixed capital formation) 10 061
K.1 / R: CFC -6 242
P.52 / K: Changes in inventories -31
P.53 / K: Acquisition of valuables 61
NP / K: Acquisition of non-produced assets -41
B9: Net lending/ borrowing -5 515
IATUR - Workshop on Household Satellite 29 July 2014

14. Extended household accounts
Production account and generation of income account
Uses (HH
total)
Uses (HH
non-SNA)
Uses (HH
SNA)
Resources
(HH SNA)
Resources
(HH non-
SNA)
Resources
(HH total)
P.1 / R: Output 28 913
P.2 / K: Intermediate
consumption
12 055
B.1G: Value added, gross 16 858
K.1 / K: Consumption of fixed
capital (=CFC)
6 242
B.1N: Value added, net 10 616
B.1N: Value added, net 10 616
D.1 / K: Compensation of
employees
956
D.29 / K : Taxes on production 15
D.39 / R: Subsidies on
production
-1 647
B.2N: Operating surplus +
B.3N: mixed income, net
11 292011 292
-2 584 -937
128 113
63 626 62 670
72 463 61 847
61 847 72 463
10 010 3 768
82 473 65 615
32 527 20 472
86 987 115 000
IATUR - Workshop on Household Satellite 29 July 2014

15. Current accounts (the rest)
Uses (HH
total)
Uses (HH non-
SNA)
Uses (HH
SNA)
Resources (HH
SNA)
Resources
(HH non-SNA)
Resources
(HH total)
B.2N: Operating surplus +B.3N: mixed income,
net
11 292 0 11 292
D.1 /R: Compensation of employees 80 981 62 670 161 515
D.4 / R: Property income 8 935 2 363
D.4 / K: Property income 2 363 2 363
B.5N: Balance of primary incomes. net 161 515 98 845
B.5: Balance of primary incomes, net 98 845 161 515
D.5…7 / R: Current transfers 29 357 -937 28 420
D.5…7 / K: Current transfers 47 444 -113 47 557
B.6: Disposable income 142 492 80 645
B.6: Disposable income 80 645 142 492
P.31 / K: Individual consumption expenditure 143 021 60 861 82 160
P.8 / R: Adjustment for the change in pension
entitlements
65 65
B.8: Saving -465 -1 450
B.8: Saving -1 450 -465
P.9 / R: Capital transfers (receivable) 251 251
P.9 / K: Capital transfers (payable) 508 508
P.51 / K: Gross fixed capital formation) 14 815 4 753 10 061
K.1 / K: CFC -10 010 -3 768 -6 242
P.52 / K: Changes in inventories -31 -31
P.53 / K: Acquisition of valuables 61 61
NP / K: Acquisition of non-produced assets -41 -41
B9: Net lending/ borrowing -5 515 -5 515
IATUR - Workshop on Household Satellite 29 July 2014

16. Conclusions
 There is not one “perfect way” to calculate household
production/ satellite account, but Finland would prefer
commonly agreed method to get comparable figures
 Once the method has been agreed, it is always possible to
make alternative calculations and reconsider the method
 Finland suggests the following:
 Calculating the whole sequence of accounts
 Using principal functions
 Calculations based on different household types
 Value of labour
IATUR - Workshop on Household Satellite 29 July 2014