HOUSEHOLD FINAL CONSUMPTION EXPENDITURE

January 30-February 1, 2013Kingston, Jamaica

OverviewBackgroundClassificationEstimation Procedure - Commodity FlowFinal consumption from private non

profit institutions serving households (NPISH)

Background

Household final consumption expenditure

consists of expenditure of resident

households on the consumption of goods and

services.

Background Household Final Consumption Expenditure

(HFCE) includes :goods and services bought for final

consumption by householdsgoods produced for own final

consumption by householdsHousing services of owner-occupied

dwellingsServices produced by employing paid

domestic staff

Classification

HFCE is classified using the Classification

of Individual Consumption According to

Purpose (COICOP)

Estimation Method Household Final consumption Expenditure (HFCE)

= Total expenditure in domestic market

– Direct purchases in domestic market

by non-resident households

+ Direct purchases abroad by resident households

Estimation Method cont’dTotal expenditure in domestic market

Total expenditure of goods

Imported Commodity Flow - Imported consumer goodsLocal Commodity Flow - sales from local production obtained

from the production approach

Total expenditures on servicesServices are estimated using data on local sales obtained from the production approach

- Household Expenditure Survey is used as the benchmark estimate- Other sources such as the Survey of Living Conditions are also

used in estimation and analysis of results

Estimation Method cont’dLocal Goods and ServicesLocal goods and services are apportioned to

intermediate consumption and to the relevant final consumption e.g. HFCE, GFCE, export etc.

Taxes on products (incl. GCT) and margins are added to the values allocated to HFCE to arrive at consumption at purchasers’ price

Estimation Method cont’dImported Commodity Flow

For national accounts purposes, the Harmonized

Commodity Description and Coding System (HS)

used in the foreign trade statistics in respect of

imports and exports of merchandise is converted

to the Standard International Trade

Classification (SITC), Rev. 4.

Estimation Method cont’dImported Commodity Flow All imported goods (classified by SITC) are

assigned an end-use, based on whether they are used as

- consumer goods

- raw material or

- capital goods. Account is taken of any item having more than

one end use.

Estimation Method cont’dThis end use assignment is based on the

United Nation’s Classification by Broad

Economic Categories (BEC).

The process of assigning end use

classification involved an inter-divisional

working committee including representatives

from the Customs Department.

Estimation Method cont’dOne assumption of the commodity flow method

is that all goods are used up during the period in

which they are sold or imported.

Adjustments therefore have to be made

whenever there are unusual occurrences such as

hurricanes where the use of increased imports

might carry over into the following period.

Estimation Method cont’dImported Commodity FlowThe estimation process for HFCE takes

account of only those imported goods classified as consumer goods from the end use classification

Taxes on products and margins are added to the c.i.f. value of imports to arrive at purchasers’ prices

Estimation Method cont’dDirect purchases abroad by residents

/Direct purchases in domestic market by non-residents

Compiled based on the estimates from the Balance of Payments

COICOP

2007 Percentage Contribution

01 FOOD AND BEVERAGES 29.6

03 CLOTHING AND FOOTWEAR 3.0

04 HOUSING, WATER, ELECTRICITY, GAS, OTHER FUELS 11.7

05FURNISHINGS, HOUSEHOLD EQUIPMENT AND ROUTINE HOUSEHOLD MAINTENANCE 6.9

06 HEALTH 4.3

07 TRANSPORT 15.6

08 COMMUNICATION 3.4

09 RECREATION AND CULTURE 10.0

10 EDUCATION 2.2

11 RESTAURANTS AND HOTELS 15.7

12 MISCELLANEOUS GOODS AND SERVICES 13.2

Total HFCE 115.7

Expenditure in Domestic Market by Non-Residents 18.6

Expenditure Overseas by Residents 2.9

HFCE by Residents 100.0

Final consumption from private non profit institutions serving households (NPISH) Final consumption from NPISH is computed

as gross output less sales

NPISH is estimated using data obtained from the production approach

Deflation

HFCE at constant prices

Deflated using CPI at the Class Level – 4 digit codes

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