1. HOUSEHOLD FINAL CONSUMPTION EXPENDITURE January 30-February 1, 2013 Kingston, Jamaica

2. Overview Background Classification Estimation Procedure - Commodity Flow Final consumption from private non profit institutions serving households (NPISH)

3. Background Household final consumption expenditure consists of expenditure of resident households on the consumption of goods and services.

4. Background Household Final Consumption Expenditure (HFCE) includes : goods and services bought for final consumption by households goods produced for own final consumption by households Housing services of owner-occupied dwellings Services produced by employing paid domestic staff

5. Classification HFCE is classified using the Classification of Individual Consumption According to Purpose (COICOP)

6. Estimation Method Household Final consumption Expenditure (HFCE) = Total expenditure in domestic market – Direct purchases in domestic market by non-resident households + Direct purchases abroad by resident households

7. Estimation Method contd Total expenditure in domestic market Total expenditure of goods Imported Commodity Flow - Imported consumer goods Local Commodity Flow - sales from local production obtained from the production approach Total expenditures on services Services are estimated using data on local sales obtained from the production approach - Household Expenditure Survey is used as the benchmark estimate - Other sources such as the Survey of Living Conditions are also used in estimation and analysis of results

8. Estimation Method contd Local Goods and Services Local goods and services are apportioned to intermediate consumption and to the relevant final consumption e.g. HFCE, GFCE, export etc. Taxes on products (incl. GCT) and margins are added to the values allocated to HFCE to arrive at consumption at purchasers price

9. Estimation Method contd Imported Commodity Flow For national accounts purposes, the Harmonized Commodity Description and Coding System (HS) used in the foreign trade statistics in respect of imports and exports of merchandise is converted to the Standard International Trade Classification (SITC), Rev. 4.

10. Estimation Method contd Imported Commodity Flow All imported goods (classified by SITC) are assigned an end-use, based on whether they are used as - consumer goods - raw material or - capital goods. Account is taken of any item having more than one end use.

11. Estimation Method contd This end use assignment is based on the United Nations Classification by Broad Economic Categories (BEC). The process of assigning end use classification involved an inter-divisional working committee including representatives from the Customs Department.

12. Estimation Method contd One assumption of the commodity flow method is that all goods are used up during the period in which they are sold or imported. Adjustments therefore have to be made whenever there are unusual occurrences such as hurricanes where the use of increased imports might carry over into the following period.

13. Estimation Method contd Imported Commodity Flow The estimation process for HFCE takes account of only those imported goods classified as consumer goods from the end use classification Taxes on products and margins are added to the c.i.f. value of imports to arrive at purchasers prices

14. Estimation Method contd Direct purchases abroad by residents /Direct purchases in domestic market by non-residents Compiled based on the estimates from the Balance of Payments

15. COICOP2007 Percentage Contribution 01FOOD AND BEVERAGES 29.6 03CLOTHING AND FOOTWEAR 3.0 04HOUSING, WATER, ELECTRICITY, GAS, OTHER FUELS 11.7 05 FURNISHINGS, HOUSEHOLD EQUIPMENT AND ROUTINE HOUSEHOLD MAINTENANCE 6.9 06HEALTH 4.3 07TRANSPORT 15.6 08COMMUNICATION 3.4 09RECREATION AND CULTURE 10.0 10EDUCATION 2.2 11RESTAURANTS AND HOTELS 15.7 12MISCELLANEOUS GOODS AND SERVICES 13.2 Total HFCE 115.7 Expenditure in Domestic Market by Non-Residents 18.6 Expenditure Overseas by Residents 2.9 HFCE by Residents 100.0

16. Final consumption from private non profit institutions serving households (NPISH) Final consumption from NPISH is computed as gross output less sales NPISH is estimated using data obtained from the production approach

17. Deflation HFCE at constant prices Deflated using CPI at the Class Level – 4 digit codes

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