Personal consumption
Surveys on consumer expenditure
Since the beginning of the century, Norway has conducted surveys on consumer expenditure. These surveys have been based on data collected from samples of households. Up to World War II the household samples were rather small and were not based on statistical principles. From 1945 to 1958 several surveys were conducted covering different socio-economic groups. On the basis of a survey on fishermen and farmers in 1954, one on old-age pensioners in 1955-56 and a survey in 1958 covering other groups, consumption figures for 1958 were calculated for the entire population. In 1967 and 1973 more extensive surveys were conducted, covering all groups. Annual surveys have been conducted since 1974. The main purpose of the surveys has been to give a description of the consumption of private households in order to update the weights assigned for the consumer price index.
Since 1967 the surveys have covered all private households. A household is comprised of persons living in the same dwelling and eating at least one meal together daily. Consumption expenses have been registered by means of detailed accounting and interviews. The net sample size has varied between 1 000 and 1 500 households per year. The results have been published on the basis of pooled data for 3 years.
The surveys show a strong increase in consumer expenditure. In current prices, total expenses per household were more than 15 times more in 1991 than in 1958. Inflation during the period explains most of this growth. But even after correcting for the price increase, households' average consumption expenditure has almost doubled.
The composition of consumption has changed considerably. The food expenditure share of total consumption made up 39.9 per cent in 1958, compared with 14.8 per cent in 1989-1991, while the share of beverages and tobacco changed only slightly. On the other hand, expenses for clothing and footwear have declined since 1958. Expenses for rent, fuel and power have gradually become a large item on the budget of many households. Up to 1974-1976 the share remained fairly stable, only 12-14 per cent of the total; then it increased to 26.5 per cent in 1989-1991. The share of furniture and household articles declined somewhat from 1958 to 1991.
Throughout the whole period the expenses for health services have made up a relatively small share of the total, amounting to about 2 per cent. Expenses for travelling and transport increased significantly from 1958 to 1986-1988, from 6.7 per cent to 23 per cent. The share then declined to 19.2 per cent in 1989-1991, about the same as in the early 1980s.
In 1958 the average household consisted of 3.09 persons. The number has decreased continually and in 1989-1991, it was down to 2.41 persons. Accordingly, the growth in consumer expenditure has been higher per person than per household. In fixed value, per capita expenses have increased about two and a half times.
Consumer price index
The consumer price index dates back to 1959. Prior to that, Statistics Norway published a cost-of-living index reflecting the consumption patterns of working-class families in cities and industrial areas. The monthly series for the total index dates back to 1920. The yearly figures covering the period 1865-1901 are based on the price index for private consumption from the national accounts and the cost of living index from the municipality of Oslo (1901-1913). When the consumer price index was introduced, the scope of the index was extended to cover the average consumption of private households in the entire population.
The two main components entered into the calculation of the consumer price index are value and price. The former indicates the importance or weight that the changes of prices of an individual commodity or service are given. The latter indicates the price changes for a individual product. Since 1982 the weights have been based on results from consumer expenditure surveys for periods of 3 years (3-year moving average) and since then they have been updated yearly. Prior to 1982 the index calculations were based on weights from the periodic consumption expenditure surveys and the weights were normally fixed for 5-year periods. The monthly survey of prices can for obvious reasons not cover all the items, brands, models and services which private households buy. Due to this, the survey is based on a set of representative items (approximately 1 000) that have been selected according to their importance in average household consumption. The corresponding prices are collected from a sample of about 1 600 stores (1992) within retail trade and among service establishments (e.g. restaurants, video rental stores etc.) and the survey comprises 40 000-45 000 observations each month.
The development of the consumer price index from 1865 up to about 1910 was characterised by considerable year to year variation. The first 2 decades were especially turbulent, and we also find the first statistically documented deflation period in this period.
In the next decade consumer price trends were dominated by World War I. Shortages of goods and excessive demand led to substantial price increases. From 1914 to 1918 consumer prices increased by a total of 140 per cent, peaking with a rise of more than 40 per cent from 1917 to 1918. High inflation continued until 1921, but was then rapidly turned into a deflationary trend, mainly caused by the world-wide depression in the international economy. During the years leading up to World War II, prices increased only marginally. A high inflation rate at the beginning of the war subsequently turned into a period with stable prices towards 1945.
Between 1945 and 1970 the annual price increase was fairly stable, briefly interrupted by high inflation during the Korean War, 1950-1952. The annual rate of growth varied between 3-5 per cent. During the next decade consumer prices were also influenced by the development in the international markets for raw materials. Rallies in the prices of sugar, silver and especially crude oil had a marked impact on inflation rates. A Norwegian counter-cyclical policy through the 1970s (partly directed towards consumption) also added to this. Consumer prices increased by an average of more than 8 per cent on an annual basis during this period. Consumer prices increased considerably in the beginning of the 1980s. From 1979 until 1982 prices increased by a total of more than 40 per cent, peaking at an annual rate of 13.7 per cent from 1980 to 1981. As a whole growth in consumer prices has been declining since 1982, interrupted only by a period of somewhat higher growth through 1986 and 1987. The decline in the beginning of the 1990s was primarily influenced by a very low increase in the price of food, clothing and footwear, furniture and household articles and reduced tariffs on telecommunications. The yearly growth rate in the prices from 1991 to 1992 was 2.3 per cent, the lowest annual increase since 1960.