Michael Connolly May 2014

1. UNECE OECD EUROSTAT Group of Experts on National AccountsExpanded Accounts for the Household SectorDiscussant comments Michael Connolly May 2014

3. Common Themes • Papers highlight limitations of the existing statistics when trying to understand h/holds • Not without its challenges • Adjustments for imputations by quintile • Underreporting by quintile • NL and OECD follow similar approach • Method A, B C (data, imputation, pro rata) • Calibration of overall micro totals to macro totals • NL present distribution across h/hold composition rather than OECD presentation of quintiles

4. Overview OECD • Omnibus paper • Breakdown of Household Income, consumption, saving and Wealth • Link micro with macro – enhanced integration • To allow distributional analysis across households in the economy - understand impact of policy • Quintiles • Sources of income • Household categories

5. Rationale - It’s all about inequality • Stiglitz Sen Fitoussi • Varying degrees of economic wellbeing across households • Uneven distribution of income • Uneven ability to absorb economic shocks

7. OECD – Step 1 - Measurement and comparison of Income Consumption and Wealth • Use of Adjusted Disposable Income - incl transfers in kind • Use of a Gap indicator as a measure of mismatch • Gap of 36% for ADI - after taking into account quantifiable differences - gap reduced to 18% • Significant divergence in either measure • Imputations in SNA, under coverage in micro surveys sub populations

8. OECD - Step 1 - Comparison of micro data and National Accounts totals • Micro- macro comparisons between 80% - 120% OK • Interest - Distributed income of Corporations and income from self employed - poor • Seem to be comparing different years for different countries together • Comparison between National micro source and IDD may also relate to different years - eg saving for 2006/7: NZ -3% and 2009/10: +16% AU

9. Step 2 - Distribution of Income, Consumption and Savings • 3 breakdowns - Income quintiles, • main sources of income • and household types • 16 countries for 2008/2009/2010 • Inconsistencies in results for Income and consumption – flatter profile for consumption • Negative savings is the consequence • Review of PIH and LCH : students and pensioners in 1st quintile • No conclusive results use of H of H/Hold data • Non - observed income excluded from micro?

10. Statistical Issues/Dashboard • 6 indicators • ADI – and GDP • COE & Mixed Inc of h/hold sector %GDP • Income redistribution • Net saving rate • H/Hold indebtedness • Unemployment

11. Netherlands Paper • Rather than quintile analysis – Household category • Age of head h/hold • Household composition : couple with children, single woman etc • Standard of living • Main source of income • Disparity index – detail of analysis (h/hold composition) • Ratio Highest to lowest • Overall directions of inequality – for Income and consumption is down but up for wealth

12. Ageing Society • This is not an issue for Households but individuals • Generational perspective - level of individual • National Transfer Accounts • Wealth not considered • Doesn’t appear to make use of Pension Claims statistics • Concepts of income and consumption differ somewhat • HBS difficult to align to individual members of H/hold • How are transfers between h/holds recorded

13. Ageing society • Link known average consumption expenditure to h/holds classified by h/hold composition • Allocate average amount across members of h/hold using an equivalence scale - depending on scale used different results obtained • Importance of flows within h/holds • Linking between registers enabled h/hold – individual , approach used in both projects

14. Questions for Authors • Par 26 & 30 NL paper “disposable income and wealth is greatest for couples with children” • Although there appears to be some data linking in NL paper - is there more scope? • Statistical or economic analysis is this appropriate for NSIs ? • Conclusions are seemingly tentative / experimental what is required to improve quality of estimates? • Would it be better to concentrate on households exclusively rather than individuals / households as Institutional Units? • Both approaches present the results differently – NL allows some time series perspective but loses cross section analysis by quintile – OECD vice-versa are there other presentational proposals

16. Discussants comments - EEA • Steep learning curve for non-expert users !! • Very useful overview of Single Currency Area • Highlights incipient household problems - property/lending • Overall integrated framework - do we miss the non-financial balance sheets and valuation?

18. Canadian NPISH Accounts - comments • Excellent practical description of how to compile NPISH sequence of accounts • Emphasis on starting point - establish the universe - vital • Data sources for Register building informative • The key elements of NPISH expenditure and income are highlighted • Good detail on data sources - similar to other countries

19. Questions • Is the financial corporations element of what was “persons and unincorporated businesses sector” excluded from the new NPISH - presumably “yes” • There is an increase in Financial assets as a proportion of total assets and a decrease in non-financial assets??? • Is the establishment of foundations for receipt of donations /govt. transfers regulated • In relation to the increased contribution of Govt. transfers to NPISH income - are these increased transfers concentrated in areas like health/eduction?