Measuring the Stock of Consumer Durables and its Implications for Euro Area Savings Ratios

14 Pages Posted: 27 Apr 2009

See all articles by Jukka Jalava

Jukka Jalava

Pellervo Economic Research Institute

Ilja Kristian Kavonius

European Central Bank; Centre for Consumer Society Research, University of Helsinki

Abstract

The purpose of this article is to estimate the impact of capitalizing durable goods on the euro area household saving ratios and disposable incomes for the first time. The reason for this exercise is twofold. Firstly, it is generally accepted that individual households regard consumer durables as assets even though they are not treated as such in the System of National Accounts 1993. Secondly, the issue is related to the definition of household saving ratios. For instance, the U.S. Federal Reserve Board publishes three household saving measures. The main difference between these saving ratios is that one is derived by treating expenditure on consumer durables as investments while the other two are compiled by considering them to be household final consumption expenditure. We find that the effect of capitalizing consumer durables on EA saving ratios is moderate. The impact is lower than it is in the U.S.

Suggested Citation

Jalava, Jukka and Kavonius, Ilja Kristian, Measuring the Stock of Consumer Durables and its Implications for Euro Area Savings Ratios. Review of Income and Wealth, Vol. 55, Issue 1, pp. 43-56, March 2009. Available at SSRN: https://ssrn.com/abstract=1381800 or http://dx.doi.org/10.1111/j.1475-4991.2008.00304.x

Jukka Jalava (Contact Author)

Pellervo Economic Research Institute ( email )

Eerikinkatu 28
00180 Helsinki
Finland

Ilja Kristian Kavonius

European Central Bank ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany
+49-13448417 (Phone)

HOME PAGE: http://www.ecb.europa.eu/pub/research/authors/profiles/ilja-kristian-kavonius.en.html

Centre for Consumer Society Research, University of Helsinki ( email )

Finland

HOME PAGE: http://tuhat.helsinki.fi/portal/en/person/ikavoniu

Register to save articles to
your library

Register

Paper statistics

Downloads
1
Abstract Views
227
PlumX Metrics