2009 Reports

A Note on the (Mis)Use of National Accounts for Estimation of Household Final Consumption Expenditures for Poverty Measures

Havinga, Ivo; Kamanou, Gisele; Vu, Viet

This chapter addresses the question whether the national accounts concept of final household consumption (expenditures) can be used to supplement household survey data for the purpose of poverty measures. We reinforce some of the views expressed by many authors quoted in this note, that the national accounts estimate of household final consumption, as used in the current procedures to estimate poverty, is not appropriate. We also try to clarify some misconceptions of the national accounts procedures and methods of estimation of final household consumption, and suggest ways for supplementing household surveys with individual consumption of government and non-profit institutions serving households (NPISHs) and other components from national accounts not generally captured through household surveys1. Likewise, some suggestions are made to guide future work on the harmonisation of household income and expenditure surveys for their use in national accounts compilations and poverty measures.