4.6 An overview of the adjustments to saving rates
We conclude this section with a brief discussion of adjustments made for other countries. Various international estimates of the impact of capitalisation of durables on the household saving ratio are available. A moderate impact on household saving ratios has been found in the Euro Area, being between 1.0 and 1.8 percentage points (Jalava and Kavionus, 2007), which the authors note is slightly smaller than effects found in the US in other studies (up to 3 percentage points). Estimates for Australia have been found to be approximately 1 percentage point (Doss, 2000).
Table 8 summarises the impact in 2011 of the illustrative adjustments for inflation and investment made in the above sections of the paper (4.2 and 4.4). In addition, includes the adjustment for the saving effect of the NZ Superannuation Fund (discussed in Section 4.5). Full details for all years for which data are available are set out in Appendices F to I.
It is evident that the adjustments raise both the national and household flow measures of savings from the national accounts by an appreciable margin. In 2011, the unadjusted net national saving rate was 1.4% of GDP. Once the flow adjustments are included the net national saving rate is estimated to have been 9.7%. And if allowance is made for the NZ Superannuation Fund, this increases to 11.2% of GDP in marked contrast to the unadjusted value of 1.4%. The time series of both the adjusted and unadjusted rates for 1996 to 2011 are plotted in Figure 19 which shows the composition of the adjustments.[33]
We conclude this section with a brief discussion of adjustments made for other countries. Various international estimates of the impact of capitalisation of durables on the household saving ratio are available. A moderate impact on household saving ratios has been found in the Euro Area, being between 1.0 and 1.8 percentage points (Jalava and Kavionus, 2007), which the authors note is slightly smaller than effects found in the US in other studies (up to 3 percentage points). Estimates for Australia have been found to be approximately 1 percentage point (Doss, 2000).
| National (% GDP) |
Household (% GDP) |
Household (% HDI) |
|
|---|---|---|---|
| Unadjusted net saving rate | 1.4% | 0.1% | 0.2% |
| Adjusted for: | |||
| Government education expenditure | 3.0% | - | - |
| Government health expenditure (70 percent) | 2.7% | - | - |
| Household education expenditure | 0.2% | 0.2% | 0.4% |
| Household health expenditure (70 percent) | 0.3% | 0.3% | 0.5% |
| Research and development | 0.5% | - | - |
| Durable consumer goods | 0.4% | 0.4% | 0.7% |
| Inflation adjustment | 1.1% | 0.6% | 1.1% |
| Adjusted net saving rate (a) | 9.7% | 1.7% | 2.9% |
| Adjustment for NZSF(b) | 1.5% | 1.5% | 2.6% |
| Total Adjusted net saving rate | 11.2% | 3.2% | 5.5% |
| Increase due to total adjustment | 9.8% | 3.1% | 5.3% |
Notes:
- The national data to this point includes that derived from central government spending. The total adds in the household spending effect.
- Derived from Appendix J.
The impact of research and development on national saving have been found to be around 2 percentage points in the US (Fraumeni and Okubi, 2002), and between 1 to 2 percentage points for the UK (Galindo-Rueda, 2007). New Zealand has relatively low expenditure on research and development, suggesting a contribution of half a percentage point to be a reasonable estimate.[34]
Figure 19 – Summary of adjustments to national (A) and household (B) saving rates
- Figure 19 – Summary of adjustments to national (A) saving rates
- Figure 19 – Summary of adjustments to household (B) saving rates
Notes
- [33]The adjusted series plotted in Figure 18 does not include the adjustment based on the NZ Superannuation Fund.
- [34]The estimates we present are approximations. Further refinements could be made in a national accounting sense with the use of more detailed data to incorporate differential useful lives by asset class, and more specific estimates of services flows.
