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Published: 8 June 2009

Effect of economic cycles is strongest on expenditure spent on durables, services and leisure-time

In real terms, Finnish households used a good one-third more money on consumption in 2006 than 20 years previously. Consumption has also become more varied, as a smaller than before proportion of consumption expenditure is spent on food. The three largest expenditure items - housing, transport and food - made up a good one-half of all expenditure in 2006. Growth in consumption has, however, not been even; it has reflected cyclic developments. Expenditure items particularly sensitive to cyclical developments have been durable goods, services as well as leisure time consumption.

Consumption growth has also varied across population groups at different times. Consumption differentials evened out towards the end of the 1980s and stayed roughly unchanged until the mid-1990s. After that the differentials have grown. In recent years e.g. the households of unemployed persons or single supporters have lagged behind the general rise in the standard of living.

Growth in consumption has slowed down in the Nordic countries

Regional consumption differentials have remained roughly unchanged in 1985-2006. An exception to this is Northern Finland since the 1990s, where average consumption has lagged behind the rest of the country. In the Helsinki region consumption expenditure has exceeded that of the rest of the country during the entire examined period. Consumption in the rest of Southern Finland has been close to the average for the country, whereas in Northern and Eastern Finland consumption has been below average. City people have consumed more than people living in semi-urban and rural municipalities, but the differences have always grown somewhat smaller during boom cycles. Regional consumption differentials are affected by differences in the population structure and level of employment in different areas.

Average household consumption expenditure per consumption unit in mainland Finland by major region in 1985-2006 (whole country = 100)

Average household consumption expenditure per consumption unit in mainland Finland by major region in 1985-2006 (whole country = 100)

Housing expenditure burden is heaviest on young people and people with low incomes

Housing is the largest individual expenditure item for households. The cost of housing varies greatly according to the households' stage in life and the kinds of housing choices they have been in a position to make. For a good one-half of all households, housing expenditure took up at most 20 per cent of the income in 2006. Nearly one-fifth of households had to pay a third or more of their income.

Form of tenure of the dwelling is a clear classifier of housing expenditure. Until the mid-1990s the cost of housing was lower for rented dwellings than for owner-occupied dwellings, but this relationship has been inverted since then. Relative to dwelling area, one-person households and single supporters have paid most for their housing and two-supporter families with children and elderly households (aged over 65) have paid the least. The latter generally live in owner-occupied dwellings. Differences by income bracket have grown since the mid-1990s. As regards persons with low incomes, the housing subsidy system compensates slightly for these differences. However, the housing expenditure burden - that is the share of housing and loan servicing expenditure of income when housing subsidies are taken into account - was highest in the youngest age group and the lowest income bracket in 2006.

Housing expenditure burden in different income brackets by household reference persons age taking housing subsidies into account 2006, %

Income quintile Age group
Under 35 years 35 - 49 yerars 50 - 64 years Over 65 years Total
I, bottom 24,6 25,4 24,6 24,8 24,9
II 24,2 22,7 18,5 18,1 21,0
III 27,3 21,2 16,2 14,7 20,1
IV 25,8 19,9 12,5 12,6 18,0
V, top 23,8 18,0 11,3 11,7 14,8
Total 25,2 20,1 13,3 15,7 18,1

Public welfare services and inter-household financial assistance even out income differentials Public education, health care and social services are very significant as regards households' total consumption. In 2006 their average value was a good EUR 4,000 per consumption unit in household. Education services made up roughly one-half of this, health care services a good 40 per cent and social services some 10 per cent. When compared internationally, education services are very significant in the Nordic countries and especially in Finland. Benefits received by using welfare services are directed mostly at households with low and average incomes. They are a significant mechanism of levelling differences in income and consumption. The benefit received in the form of education services is large especially for student households but also for families with children. In pensioner households the share of health care services is greater than in other households.

Taken as a whole, inter-household financial assistance is minor when compared to public welfare services, but it is significant for the receiver households. For example, in 2006 good 80 per cent of student households received financial assistance from other households to the average amount of EUR 1,000 per consumption unit in household. An equal percentage received various consumption goods worth some EUR 1,000. Support between households is directed mostly from older households to younger, according to the households' stage in life. The generations who receive the most have been born towards the end of the 1960s or after.

These data derive from Statistics Finland's publication Households’ consumption 1985-2006 (Statistics Finland, Income and Consumption) , which examines the changes that have taken place in the structure, consumption and livelihood of Finnish households in the past good 20 years. The data of the publication are based on the data of Statistics Finland's Household Budget Survey in 1985, 1990, 1995, 2001 and 2006.

Source: Households' Consumption, Statistics Finland

Inquiries: Kirsti Ahlqvist 09-1734 3412, Marko Ylitalo 09-1734 3560

Director in charge: Riitta Harala


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Updated 8.6.2009

Referencing instructions:

Official Statistics of Finland (OSF): Households' consumption [e-publication].
ISSN=2323-3028. 2006. Helsinki: Statistics Finland [referred: 22.2.2024].
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