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HOUSEHOLD CAPITAL
 
  Sensitivity  
 

We tested the sensitivity of the value of the contribution of capital to household production to:

  • using a geometric Perpetual Inventory Model - this reduced capital consumption of all assets except dwellings by less than 1 per cent in 2000;
  • using a capital services model, which estimates capital consumption and foregone interest - if a 2.5 per cent discount rate is assumed, this increases the value of the contribution of capital by 17 per cent, if a 6 per cent discount rate is assumed, it increases the value of the contribution of capital by 47 per cent in 2000.
 
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Table: Household capital (excluding owner-occupied dwellings) estimates for the UK using alternative method...
 
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