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Measuring The Stock Of Consumer Durables And Its Implications For Euro Area Savings Ratios

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  • Jukka Jalava
  • Ilja Kristian Kavonius

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. Copyright 2009 The Authors. Journal compilation 2009 International Association for Research in Income and Wealth Published by Blackwell Publishing.

Suggested Citation

  • Jukka Jalava & Ilja Kristian Kavonius, 2009. "Measuring The Stock Of Consumer Durables And Its Implications For Euro Area Savings Ratios," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(1), pages 43-56, March.
  • Handle: RePEc:bla:revinw:v:55:y:2009:i:1:p:43-56
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    Cited by:

    1. Richard Ochmann, 2016. "Distributional and welfare effects of Germany’s year 2000 tax reform: the context of savings and portfolio choice," Empirical Economics, Springer, vol. 51(1), pages 93-123, August.
    2. Asadul Islam & Jaai Parasnis & Dietrich Fausten, 2013. "Do Immigrants Save Less than Natives? Immigrant and Native Saving Behaviour in Australia," The Economic Record, The Economic Society of Australia, vol. 89(284), pages 52-71, March.
    3. repec:bla:revinw:v:63:y:2017:i:2:p:353-377 is not listed on IDEAS
    4. Amendola, Nicola & Vecchi, Giovanni, 2014. "Durable goods and poverty measurement," Policy Research Working Paper Series 7105, The World Bank.

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