5
uncritical interpretation of the saving ratio would make it
appear.
The preceding analysis deals only with the financial saving
of households. It is of interest to find that also the data
on saving in form of residential housing have been
subjected to a critical analysis which makes them appear in
a new light.
Tibor Scitovsky showed that to a very large extent the
reduction in the personal saving ratio is due to its being
calculated net, and to the very high capital consumption
allowances for dwelling houses which are used in
calculating it and which increased to an extraordinary
extent in the late 70s owing to the inflation in housing
prices(Scitovsky 1986). This kind of reckoning, Scitovsky
argues, is unrealistic because it does not take account of
the fact that house owners owing to the considerable
increase in the value of their property can realise capital
gains which make it unnecessary for them to provide for
replacement. If the personal saving is calculated on a
gross basis,then, as Scitovsky shows, the decline since
1977 is rather smaller than the decline of the net saving
ratio given by NIPA. (The gross rate is also better suited
for international comparisons in most cases). There
is,however,still a decline,that is, also the gross rate is
lower than it was in the early 70s.
Professor Scitovsky's calculation extend only to 1979;I
have made a very rough calculation for the years 1980 to
1987 by adding the capital consumption allowance with
adjustment for owner occupied non-farm houses to the