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factors that may help to explain differences in household saving ratios between countries: possession of household durables; real net interest payments; potential and realised capital gains and losses; capital gains taxes; and other issues relating to pension schemes. Unfortunately, insufficient comparable data are available to quantify the impact of these factors, except for some estimates regarding possession of household durables in the United States and Japan.

Individual households may regard the purchase of consumer durables (such as cars, furniture and washing machines) not as consumption but as an investment, even though they are not treated as such (for good reasons) in the SNA 93. A hypothetically adjusted saving ratio could then be derived by treating household durables as fixed assets (similar to residential housing) rather than as final consumption expenditure. According to the rental equivalence approach, household final consumption expenditure is adjusted by subtracting purchases of consumer durables and by adding depreciation for consumer durables. This only affects the difference in saving ratios per country to the extent that the proportion of household consumption spent on durables and the growth rate of durables consumption differ. Estimates produced by the OECD for the United States and Japan show household saving ratios adjusted for household durables that are both sometimes more than three percentage points higher than the respective standardised household saving ratios.


Published household saving ratios are not fully harmonised across countries. Chart 2 in this study presents, for the first time, experimental comparable saving ratios for the euro area, the United States and Japan. Although the ratios for all three economic areas declined in the course of the 1990s, the difference between the ratios in the euro area (9.6% in 2002) and the United States (2.4% in 2002) is significant and has even risen during that period. Japan has had a household saving ratio close to that of the euro area, except for 2001 and 2002 (5.2%).

Part of this difference could potentially be explained by the varying legal and administrative arrangements in the areas concerned. The study analyses for three of these arrangements the possible effects on the household saving ratio: (1) the level of household consumption of public services; (2) the financing of government expenditure through income taxes or taxes on production


and imports (like VAT); and (3) the organisation of pension arrangements through social security schemes or private pension schemes. Each of these causes could be behind some of the differences in the household saving ratios, but – when taken together – the divergence among the three areas concerned actually increases. A number of other factors, including households’ attitudes towards consumption and saving, and their possession of household durables, must be the cause of the differences between household saving ratios for the euro area, the United States and Japan.

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