Some misunderstanding has occurred regarding results of Statistics Iceland’s household expenditure survey in various media in the last days. At this occasion Statistics Iceland would like to emphasise the following points:
1. In relation to the government bill on value added tax, the misunderstanding has occurred that Statistics Iceland has been involved in calculations of the effects of the proposals on disposable income of different households with different income levels. These examples and all calculations were made by the Ministry of Finance and Economic Affairs. Estimations of household expenditure for these examples were made by the ministry. Only the share of food and non-alcoholic beverages of total expenditure for different types of households was used directly from results of Statistics Iceland’s expenditure survey. Expenditure figures are not taken from the survey results but estimated by the ministry. The household expenditure survey results are available to all on Statistics Iceland’s website, but the statistical office is not responsible for reuse of the data, neither fully nor partially.
2. There has also been some misinterpretation in the discussion that Statistics Iceland compiles optimal consumption standards, however that is not the case. Statistics Iceland surveys regularly the real expenditure of households and uses the results for the base of the consumer price index. The household expenditure survey collects real household expenditure but makes no judgement on whether expenditure is necessary or desirable. The following points hold for the survey:
- The household expenditure survey is a sample survey that measures real expenditure of households in Iceland.
- The survey does not make judgement if household consumption is good or bad or if it is necessary.
- The survey does not include information on how households finance their consumption.
3. In the media some discussion has been about the cost of households for a single meal. In Statistics Iceland’s household expenditure survey, participants are not asked about the number of meals they consume, and even if such questions were asked answers were likely to be widely different between types of households and individual participants. When measuring expenditure on food it is important to keep in mind that households often buy ready-made food and fast-food or purchase food in canteens at work or in schools. In order to aggregate food costs this expenditure needs to be added to the cost of food bought in grocery stores. Information on the average cost of one meal is therefore not available in the household expenditure survey results.
4. Food is mostly bought in grocery stores or supermarkets. When discussing expenditure of households in grocery stores it has to be considered that these stores do not only sell food and non-alcoholic beverages. Among other items they sell are various household items such as light bulbs, kitchen towels, candles, charcoal, soap and toothpaste. Larger stores also sell toys, books, clothes and many other items. This is important to keep in mind as total spending of households in grocery stores is often higher than the total spending on food items in grocery stores and therefore the total spending in grocery stores is an uncertain indicator of food expenditure. The classification Statistics Iceland uses for consumer expenditure classifies the different items bought in grocery stores in different categories.
In response to recent media coverage, Statistics Iceland has compiled common questions and answers about household expenditure. This is an attempt to clarify some of the issues that have been misinterpreted in the recent discussions. Household expenditure on food items and how the household expenditure survey classifies them are specifically addressed.
Statistics Iceland also publishes a memorandum on Household expenditure on food, written on 13 October 2014 (Icelandic version available here). The content of the memorandum is covered and extended further in the questions and answers on the household expenditure survey.
Latest results of the household expenditure survey can be found on Statistics Iceland’s website.