Comparability
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National Accounts, Climate and Environment, Economic StatisticsMercedes Sophie Louise Bech
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Household final consumption expenditure (HFCE) is part of the national accounts and compiled according to international guidelines, ensuring cross-country comparability. Covering the period from 1966, it reflects households’ purchases of goods and services and is based on various underlying sources. Direct comparisons with other statistics can be difficult due to differing definitions, but HFCE is fully consistent with the overall national accounts.
Comparability - geographical
The UN has prepared a manual for the preparation of the national accounts, the System of National Accounts (SNA), which the EU has prepared a European interpretation of (European System of Accounts (ESA)). The current SNA2008 manual is followed by most countries in the world, while the corresponding ESA2010 manual is followed by all European countries. Therefore, household final consumption expenditure in regards to national accounts figures are internationally comparable to a high degree.
Comparability over time
Household consumption in the national accounts is compiled with the aim of ensuring a high degree of comparability over time. The calculations are primarily based on the Household Budget Survey and the Retail Trade Index, which are continuously updated and quality assured. For periods where direct observations are not available, preliminary national accounts are used as a basis, supplemented by indicators such as developments in retail sales and price indices. Methodological changes, updates to classifications, or changes in source coverage are documented, and previous periods are adjusted to maintain consistency in the time series.
Revisions may occur in connection with methodological changes or the implementation of revised international standards, such as ESA or COICOP, where earlier years are re-estimated to ensure coherence across the entire time series.
Coherence - cross domain
There is full consistency between household consumption (HFCE) and the other parts of the national accounts, as well as with the balance of payments and the general government statistics. HFCE is also linked to a number of other statistics, including the Household Budget Survey and the Retail Trade Index.
However, discrepancies may occur for several reasons:
- Differences in variable definitions
- Differences in the delimitation of the calendar year, as the national accounts always use the calendar year
- The national accounts, and thus HFCE, cover all economic activities, including illegal activities
- Errors in primary statistics used in the compilation and reconciliation of HFCE are not necessarily corrected in the primary statistics
Coherence - internal
There is by definition full internal consistency in the national accounts which includes the households final consumption expenditure. The internal consistency includes both the functional and the institutional national accounts.