What Are Final Expenses?

Final consumption expenditure is the value paid by buyers for goods and services purchased from sellers. The inspection criteria are based on the occurrence of the ultimate purchase and sale of goods and services.

Final consumption expenditure

Right!

Final consumption expenditures are payments made by buyers for goods and services from sellers

Final consumption expenditure is divided into household consumption expenditure and public consumption expenditure.

1. The full name of resident consumption expenditure is the final consumption expenditure of residents, which refers to the expenditures incurred by residents during the accounting period to directly purchase consumer goods and services. Judging from the nature of consumption, it includes the following: expenditures for durable consumer goods; expenditures for non-durable consumer goods; expenditures for various cultural living services and actual and virtual house rents. There are two specific calculation methods for residents' final consumption expenditure: direct kernel algorithm and indirect estimation algorithm. The direct kernel algorithm calculates the consumption expenditure based on the actual flow of consumption and sums up the value of the goods and services used for individual personal consumption. The indirect calculation algorithm uses the residents' balance of expenditure to estimate consumption expenditure.

2. Public consumption expenditure refers to the fiscal expenditure used to provide public consumer goods and services in order to meet public needs. Including government final consumption expenditure and non-profit organizations serving the residents, the final consumption expenditure refers to the value of consumer goods and services provided to the public by the government and non-profit organizations serving the residents. Consumer spending is the main component.

By function, public consumption expenditure includes education, health care, social insurance and welfare, sports and entertainment, and culture. From the perspective of beneficiaries, public consumption expenditure should be divided into two parts for residents and for public services.

From the perspective of consumption provision methods or sources, there are two cases of public consumption expenditure: one is that the government and other departments purchase products from the market and then provide them to specific residents for free; The output of their own services is provided to residents and the public free of charge or at market-insignificant prices. Along this line of thought, a basic method of accounting for public consumption expenditure can be established. In the former case, public consumption expenditure can be calculated at the actual purchase price. In the latter case, the value of the non-market aggregate output of the government and other sectors should be used as the basis, minus the "sales income" obtained by these sectors selling their output at a cost price or a price of no economic significance. The calculation result is the government Services provided to the public for free by other departments, that is, consumer spending on these departments themselves.

The relationship between final consumption expenditure and actual final consumption

Actual final consumption refers to the value of goods and services actually obtained by consumers ^[1] . The inspection criteria are based on the actual acquisition of consumption objects.

The difference between actual final consumption and final consumption expenditure is that the government has spent expenditures for specific individuals or groups of people. How should this part of expenditure be attributed? That is, a part of the government consumption expenditure that was originally classified as a part of personal actual consumption is separated.

The concept of consumption under the two definitions does not affect the total amount of final consumption, only the relative scale of both personal consumption and public consumption.