Consumption Consumption Amonthep Chawla Amonthep Chawla ( - - PowerPoint PPT Presentation

▶
consumption consumption
SMART_READER_LITE
LIVE PREVIEW

Consumption Consumption Amonthep Chawla Amonthep Chawla ( - - PowerPoint PPT Presentation

Aug 19, 2022 32 likes •255 views

Consumption Consumption Amonthep Chawla Amonthep Chawla ( Adjusted from Sang- -Hyop Lee Hyop Lee s s ( Adjusted from Sang Summer Seminar 2008 Presentation) Summer Seminar 2008 Presentation) 1 N ational T ransfer A ccounts _ _

slide-1
SLIDE 1

National Transfer Accounts

1

Consumption Consumption

Amonthep Chawla Amonthep Chawla ( Adjusted from Sang ( Adjusted from Sang-

  • Hyop Lee

Hyop Lee’ ’s s Summer Seminar 2008 Presentation) Summer Seminar 2008 Presentation)

slide-2
SLIDE 2

National Transfer Accounts

2

0.000 0.200 0.400 0.600 0.800 1.000 1.200 10 20 30 40 50 60 70 80 90+ Age

Consumption and Labor Income, Per Capita

Consumption Labor Income

  • Note. Values normalized on per capita labor income of persons 30-49.

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ The Economic Lifecycle The Economic Lifecycle (per capita) (per capita)

slide-3
SLIDE 3

Outline Outline

Private Consumption

► ► Education

Education

► ► Health

Health

► ► Owner occupied

Owner occupied housing (imputed rent) housing (imputed rent)

► ► Durables

Durables

► ► Other

Other

Public Consumption

► ► Education

Education

► ► Health

Health

► ► Other

Other

National Transfer Accounts

3

slide-4
SLIDE 4

National Transfer Accounts

4

Private Consumption Private Consumption

► ► Standard approach of a

Standard approach of allocating llocating h household

  • usehold

c consumption among the

  • nsumption among the m

members embers did not provide did not provide reasonable results reasonable results

  • Engel method

Engel method: f : food share is used to measure

  • od share is used to measure

households households’ ’ well well-

  • being

being

  • Rothbarth method

Rothbarth method: w : welfare measured by expenditure on elfare measured by expenditure on adult goods per adult adult goods per adult

► ► Alternative method

Alternative method ( (NTA NTA) )

  • Estimate

Estimate education and health education and health consumption directly consumption directly

  • Estimate private capital consumption (rental value of

Estimate private capital consumption (rental value of

  • wner occupied housing + flow of services from
  • wner occupied housing + flow of services from

durables) durables)

  • Allocate other consumption indirectly (using Equivalence

Allocate other consumption indirectly (using Equivalence Scale) Scale)

slide-5
SLIDE 5

National Transfer Accounts

5

Allocating Allocating Private Education Private Education Consumption Consumption

( ) ( ) ( ) ( )

edu j j j

C a E a a NE a α β = +

∑ ∑

  • Household education consumption is

Household education consumption is regressed on the number of enrolled (E) and regressed on the number of enrolled (E) and non non-

  • enrolled (NE) in each age group.

enrolled (NE) in each age group.

  • The age groups included will vary with the

The age groups included will vary with the country and its enrollment rates. country and its enrollment rates.

  • Use unsmoothed profile

Use unsmoothed profile. .

slide-6
SLIDE 6

National Transfer Accounts

6

Allocating Allocating Private Private Health Care Health Care Consumption Consumption

► ► Often v

Often very complex in part due to various source ery complex in part due to various source

  • f financing
  • f financing, which includes

, which includes

  • Private out

Private out-

  • of
  • f-
  • pocket expense

pocket expense

  • Private insurance

Private insurance

  • Public sector

Public sector

► ► Available sources of data vary across countries

Available sources of data vary across countries. .

► ► There are differences between NHA and NTA

There are differences between NHA and NTA

  • E.g. NHA document expenditures rather than

E.g. NHA document expenditures rather than

  • consumption. Thus it includes profits of insurance
  • consumption. Thus it includes profits of insurance

companies. companies.

► ► Estimate using one of four approaches.

Estimate using one of four approaches.

slide-7
SLIDE 7

National Transfer Accounts

7

Approach 1: Method based on Approach 1: Method based on individual utilization measures from individual utilization measures from expenditure survey data expenditure survey data

( ) ( ) ( ) ( )

health j j j

C a IN a a OUT a α β = +

∑ ∑

► ► ______ ______ ___________ __

______ ______ ___________ __ _________ __ _________ __ ___ ______ __ _______ ___ ______ __ _______ _____ _________ ________ ___ _____ _________ ________ ___ __________ ________ __ ____ ___ __________ ________ __ ____ ___ _____ _____

► ►Private health consumption is regressed on

Private health consumption is regressed on the number of members using inpatient the number of members using inpatient services (IN) and outpatient services (OUT) services (IN) and outpatient services (OUT) in each age group. in each age group.

slide-8
SLIDE 8

National Transfer Accounts

8

Approach 2: Based on age profile of per Approach 2: Based on age profile of per capita utilization measures capita utilization measures

► ______ ______ ___________ __ _________ __

___ ______ __ _______ ___ ___ ______ ___________ _______ __ ___

►

____ __ ______ ___ ______ __ ___ ______ ___ ______

► Private health consumption is regressed on the

number of members (M) and per capita utilization measure by age (U)

► Could be linear (the former) or non-linear (the

latter)

( ) ( ) ( )

h e a l t h j j

C a U a M a β = ∑

1 2 2

( ) ( ) ( ) ( ) ( ) ( )

h e a l t h j j j j

C U a M a a U a M a a U a M a β β β = + +

∑ ∑ ∑

slide-9
SLIDE 9

National Transfer Accounts

9

Approach 3: Based on non Approach 3: Based on non-

  • parametric

parametric iterative method iterative method

► ► Assign health expenditure equally to each

Assign health expenditure equally to each household member and then tabulate the per household member and then tabulate the per capita profile. capita profile.

► ► The per capita profile is then used as weights to

The per capita profile is then used as weights to allocate health expenditure to household members allocate health expenditure to household members producing a new per capita profile. producing a new per capita profile.

► ► Repeat until the weights do not change much.

Repeat until the weights do not change much.

► ► Unlike regression approach, it does not produce

Unlike regression approach, it does not produce negative coefficients for some age groups. negative coefficients for some age groups.

slide-10
SLIDE 10

National Transfer Accounts

10

Estimated C after iteration Estimated C after iteration Age Age True C True C 1 1 2 2 3 3 4 4 5 5 6 6 5 5 10 10 14.44 14.44 11.90 11.90 10.83 10.83 10.36 10.36 10.16 10.16 10.07 10.07 35 35 30 30 25.00 25.00 27.42 27.42 28.74 28.74 29.40 29.40 29.72 29.72 29.87 29.87 65 65 20 20 22.22 22.22 21.54 21.54 20.85 20.85 20.43 20.43 20.21 20.21 20.10 20.10 H HH No H No I d No I d No Age Age HH HH C C 1 1 2 2 3 3 4 4 5 5 6 6 1 1 1 1 5 5 70 70 23.33 23.33 15.69 15.69 12.48 12.48 11.09 11.09 10.49 10.49 10.22 10.22 1 1 2 2 35 35 70 70 23.33 23.33 27.16 27.16 28.76 28.76 29.45 29.45 29.76 29.76 29.89 29.89 1 1 3 3 35 35 70 70 23.33 23.33 27.16 27.16 28.76 28.76 29.45 29.45 29.76 29.76 29.89 29.89 2 2 1 1 35 35 80 80 26.67 26.67 27.69 27.69 28.72 28.72 29.35 29.35 29.69 29.69 29.85 29.85 2 2 2 2 35 35 80 80 26.67 26.67 27.69 27.69 28.72 28.72 29.35 29.35 29.69 29.69 29.85 29.85 2 2 3 3 65 65 80 80 26.67 26.67 24.62 24.62 22.56 22.56 21.30 21.30 20.63 20.63 20.30 20.30 3 3 1 1 65 65 40 40 20 20 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 3 3 2 2 65 65 40 40 20 20 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 4 4 1 1 5 5 20 20 10 10 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 4 4 2 2 5 5 20 20 10 10 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00

slide-11
SLIDE 11

National Transfer Accounts

11

Approach 4: Based on simple regression Approach 4: Based on simple regression

►Private health consumption is regressed on

the number of household members (M).

►Could have negative coefficients—replace

with zero.

►The least recommended approach.

( ) ( )

health j j

C a M a β = ∑

slide-12
SLIDE 12

National Transfer Accounts

12

Estimating Other Household Estimating Other Household Consumption Consumption

► ► Assumed to be proportional to an equivalence

Assumed to be proportional to an equivalence scale that is equal to 1 for adults aged twenty scale that is equal to 1 for adults aged twenty

  • r older, declines linearly from age 20 to 0.4
  • r older, declines linearly from age 20 to 0.4

at age 4, and is constant at 0.4 for those age at age 4, and is constant at 0.4 for those age 4 or younger. 4 or younger.

( ) 1 0.6 (for 4) ( ) 1 [0.6*(20 )]/16 (for 4< <20) ( ) 1 (otherwise, i.e., 20) a a a a a a a β β β = − ≤ = − − = ≥

slide-13
SLIDE 13

National Transfer Accounts

13

Public Consumption Public Consumption

► ► Allocated based on administrative records, and in some

Allocated based on administrative records, and in some cases, survey data. cases, survey data.

► ► Public education consumption

Public education consumption

  • Formal education consumption: estimate by calculating unit cost

Formal education consumption: estimate by calculating unit cost per student per level. per student per level.

  • Informal education consumption: estimate by dividing total publi

Informal education consumption: estimate by dividing total public c informal education consumption by total population by age. informal education consumption by total population by age. ► ► Public health care consumption

Public health care consumption

  • Health care purchased by individuals and reimbursed through

Health care purchased by individuals and reimbursed through public programs: captured in household surveys. public programs: captured in household surveys.

  • Health care provided directly to individuals by government clini

Health care provided directly to individuals by government clinics: cs: allocate using administrative records. allocate using administrative records.

  • Collective health services: allocate on a per capita basis.

Collective health services: allocate on a per capita basis. ► ► Other public consumption: equally to all members

Other public consumption: equally to all members

slide-14
SLIDE 14

National Transfer Accounts

14

Normalized Consumption Ratio

(normalized by simple average of YL pc for age 30-49 of each economy) 0.0 0.5 1.0 1.5 2.0 2.5 10 20 30 40 50 60 70 80 90+

Thailand 1996 Japan 2004 Indonesia 1996 Costa Rica 2004 Taiwan 1981 Taiwan 1986 Taiwan 1991 Taiwan 1998 Taiwan 2003 Korea 2000 Sweden 2003 China urban 2002 Uruguay 1994 US 2003 China rural 2002 France 2001 India 1999

slide-15
SLIDE 15

National Transfer Accounts

15

0.000 0.200 0.400 0.600 0.800 1.000 1.200 10 20 30 40 50 60 70 80 90+ C(a)/Yl(30-49)

Range for developing countries

US Japan More on education More on elderly (health care)

__________ _______ __________ _______ _____________ __ _____________ __ _________ _________ ________ ________ Consumption Profiles: Industrialized Consumption Profiles: Industrialized vs vs. . Developing Countries. Developing Countries.

slide-16
SLIDE 16

National Transfer Accounts

16

Labor Income: Industrialized vs Labor Income: Industrialized vs. . Developing Countries. Developing Countries.

0.2 0.4 0.6 0.8 1 1.2 1.4 10 20 30 40 50 60 70 80 90+

Developing Japan US Higher Yl in the 50-59 age group

slide-17
SLIDE 17

National Transfer Accounts

17

Country Country Year Year Early Age Early Age Later Age Later Age Duration Duration I ndonesia I ndonesia

1996 1996 29 29 58 58 29 29

Thailand Thailand

1996 1996 26 26 61 61 35 35

Taiwan Taiwan

1998 1998 24 24 56 56 32 32

Japan Japan

1999 1999 29 29 61 61 32 32

United States United States

2000 2000 27 27 59 59 32 32

Costa Rica Costa Rica

2004 2004 24 24 57 57 33 33

Lifecycle Deficit and Surplus Ages Lifecycle Deficit and Surplus Ages

slide-18
SLIDE 18

National Transfer Accounts

18

Aggregate Age Aggregate Age-

  • Profile

Profile

► ►Use population data to construct a

Use population data to construct a preliminary aggregate age preliminary aggregate age-

  • profile.

profile.

  • Population data are available from the UN Pop

Population data are available from the UN Pop Division for the period of 1950 Division for the period of 1950-

  • 2050 and also to

2050 and also to 2300 (long term projection). 2300 (long term projection).

  • Insure that population data have been adjusted

Insure that population data have been adjusted to eliminate age heaping and under to eliminate age heaping and under-

  • reporting.

reporting.

slide-19
SLIDE 19

National Transfer Accounts

19

Aggregate Controls Aggregate Controls

► ► Adjust the aggregate pr

Adjust the aggregate profile and the per capita

  • file and the per capita

profile to match a control total taken from N profile to match a control total taken from NIPA IPA or

  • r

some other source. some other source.

  • Private consumption: household final consumption

Private consumption: household final consumption expenditure + non expenditure + non-

  • profit institutions serving

profit institutions serving households households’ ’ (NPISHs) final consumption expenditure (NPISHs) final consumption expenditure

  • Public consumption: general government final

Public consumption: general government final consumption expenditure consumption expenditure

  • Earnings + fringe benefits: compensation of employees.

Earnings + fringe benefits: compensation of employees. NIPA excludes compensation received by non NIPA excludes compensation received by non-

  • resident

resident and remittances (on and remittances (on-

  • going discussion)

going discussion)

  • Labor portion of self

Labor portion of self-

  • employment income: mixed income

employment income: mixed income

  • f household sector
  • f household sector
slide-20
SLIDE 20

National Transfer Accounts

20

Some Adjustments are Needed Some Adjustments are Needed

► ► In NIPA, prices are market prices; in NTA, prices

In NIPA, prices are market prices; in NTA, prices are basic prices net of indirect taxes (see Beet are basic prices net of indirect taxes (see Beet’ ’s s presentation for details) presentation for details)

► ► In NIPA, private health consumption reimbursed

In NIPA, private health consumption reimbursed through public health insurance programs through public health insurance programs (Medicare, NHI) are private health consumption; (Medicare, NHI) are private health consumption; in NTA it is reclassified as public consumption. in NTA it is reclassified as public consumption.

► ► In NIPA, non

In NIPA, non-

  • housing consumer durable

housing consumer durable consumption is measured by expenditure; in NTA, consumption is measured by expenditure; in NTA, consumption of it is the flow of services. consumption of it is the flow of services.

slide-21
SLIDE 21

National Transfer Accounts

21

Acknowledgement Acknowledgement

Support for this project has been provided by the following Support for this project has been provided by the following institutions: institutions:

► ► the John D. and Catherine T. MacArthur Foundation;

the John D. and Catherine T. MacArthur Foundation;

► ► the National Institute on Aging: NIA, R37

the National Institute on Aging: NIA, R37-

  • AG025488 and

AG025488 and NIA, R01 NIA, R01-

  • AG025247;

AG025247;

► ► the International Development Research Centre (IDRC);

the International Development Research Centre (IDRC);

► ► the United Nations Population Fund (UNFPA);

the United Nations Population Fund (UNFPA);

► ► the Academic Frontier Project for Private Universities:

the Academic Frontier Project for Private Universities: matching fund subsidy from MEXT (Ministry of Education, matching fund subsidy from MEXT (Ministry of Education, Culture, Sports, Science and Technology), 2006 Culture, Sports, Science and Technology), 2006-

  • 10,

10, granted to the Nihon University Population Research granted to the Nihon University Population Research Institute. Institute.

slide-22
SLIDE 22

N National

ational T

Transfer

ransfer A

Accounts

ccounts

22 22

The End The End