6 
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 in the 70s was 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 personal saving (Table 6).The discrepancy 
between gross and net saving rate did not increase any further 
since 1980 but if we add to the grosss saving ratios the 
correction of about 2 to 2.5 p.c.mentioned further above it 
appears that the dramatic decline of the saving rate becomes a 
rather less impressive experience.We may still ask ourselves 
whether the decline in net saving which still remains after the 
corrections is not due to an increased inclination of households 
to indebt themselves . To get a measure of households'