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1. WHY MIGHT USES OF HOUSEHOLD SPENDING DATA DIFFER BETWEEN COMMERCIAL AND GOVERNAMENTAL ORGANISATION?

Commercial organisations basically pursue a self-gain in terms of profitability, while governmental organisations tend to act for the common good of the society and the State. Commercial organisations are interested in both microeconomics and macroeconomics issues: the former comprehend what consumers are willing to buy, and the relationship between different amount of spending on various categories of goods. These analysis are used to reveal the most profitable product lines, and the chances for changes in strategy or diversification. Macroeconomics matters include aggregate household consumption on goods and services, and on the potential of the whole economy to bear the growth of individual firms or industries. Finally, commercial organisations can confront the levels of sales between them and the competitors, and respond accordingly. Governmental organisations use consumption data for three main purposes: to evaluate public policies effects, aims and related changes; to analyse current economy, both from an internal and external (worldwide) perspective; to foresee future trends in economy and spending. Its important to assess whether public policies are effective or not, and in this case to improve upon them. Once modifications are applied, there will be different effects on spending levels to consider. Moreover, public policies can be targeted to specific groups of people in order to help them (low income people, for instance). Governmental organisations analyse microeconomics and macroeconomics issues too, this time not for a personal benefit, but in order to introduce new policies and have an overall evaluation of the current situation. Diverse spending amounts on different products and the correlation income levels-spending levels, as well as total consumption data, also helps to compare national economy with the rest of the world. Lastly, historical data are used to relate changes in the economic circumstances to short and long-term variations in spending levels, or vice versa: if household spending on certain services/goods changes permanently over a period of time, that could modify the economy overall. 2. HOW DO DATA USERS BENEFIT FROM SOME KNOWLEDGE OF CONVENTIONS SUCH AS THOSE USED IN CONSUMER TRENDS? Conventions, by means of coherence and easy comprehensibility, help to uniform the way data are presented, thus interpreted, worldwide. For example, applying the COICOP (international standard for the measurement of consumption), all countries will be able to classify their households spending in terms of different purposes sought when buying products or services. Other conventions deal with the discrepancy between acquisition of goods and its respective payment (expense is recognised once goods are received, not when payment takes place), the differences in housing services involving owner-occupying households and leaseholders, and second-hand purchases.

3.WHICH TYPE OF DATA SERIES, IN MONETARY TERMS, ON HOUSEHOLD CONSUMPTION INDICATES THE VOLUME OF GOODS ACQUIRED? There are three types of data, all related to each other, which express the magnitude of volume acquired in monetary units. First of all, current-price figures relate the changes in volume of goods acquired to their price. As a consequence, changes in spending figures, since calculated at current prices, connect again alterations in volume and in prices. From these figures a third set of data, called constant-price series, can be obtained. This is the most straightforward way to estimate variations in quantity of goods purchased:

basically, payments at one periods current price are reformulated on the basis of the prices charged during the previous period. The difference between the two periods express the variation of volume of goods acquired.

4.WHY DO ECONOMISTS SUGGEST DATA USERS SHOULD DISTINGUISH BETWEEN CHANGES IN RELATIVE PRICES AND CHANGES IN THE OBSERVABLE PRICE OF A GOOD? A relative price is given by the ratio of two prices, therefore it is the measure of the price of a good or service in relation to another. The problem with these data is the effect of inflation on them: since prices in different categories of good are affected by different degrees of inflation level, the ratio of two prices represents a misleading esteem of effective changes in prices. Therefore, changes in relative prices have to be taken into consideration because they influence households expenditure to a different extent compared to changes in observable prices. 5.DO THE DATA PRESENTED CONFIRM THE VOLUMES OF DURABLES ACQUIRED IN 2008 WERE HIGHER THAN THOSE IN 2004 BECAUSE REAL INCOME INCREASED? From the charts we can clearly state that total volume of spending increased from 2004 to 2008, but this rate (+2.7% from 1964 to 2008) approximately matched the level of rise in real incomes (+2.6% from 1964 to 2008). Therefore, total consumption and real income went at the same pace. However, if we look carefully at the composition of total spending, we can clearly see that more was spent on durable goods than on other categories. The chart displaying real spending as a share of real income clearly shows that, between 2004-2008, the percentages for Services and non-durable goods decreased despite the increase in income, while the percentage for durable goods increased almost at the same level of income rise. More Durables were therefore acquired since a bigger proportion of income was spent on them, and a smaller level was spent on services. But after all this is a direct consequence of income increase! Indeed, due to the greater volatility in the purchase of Durables (connected to their greater income-elasticity, compared to services), we can conclude that more Durables were purchased as a consequence of an increase in real income.

6.DO THE DATA PRESENTED SUPPORT THE VIEW THAT SPENDING ON SERVICES IS MORE VOLATILE AND INCOME-ELASTIC THAN TOTAL SPENDING ON GOODS?

Even if consumer spending level tends to be quite homogeneous over time despite the change in real income (consumption smoothing), here we can see that spending on Services is even more uniform than total spending of goods. It is sufficient to compare charts 4 and 5 to have a demonstration of that: the line representing quarterly changes in real spending on Services (chart 5) follow a much more constant and homogeneous path than the one for quarterly changes in real total spending(chart 4) , which have a greater spread and more uneven path. Total spending is therefore more volatile and income-elastic, due to the effect of Durables and Semi-durables spending (which , as showed in chart 5, are even more changeable and unpredictable) on it.