Estimating social transfers in kind from non-profit institutions serving households

Social transfers in kind from non-profit organizations serving household (NPISH) are equivalent to individual consumption of goods and services transferred from NPISH to households. As explained previously in section, by convention, all consumption expenditure of NPISH are treated as individual consumption. This amount is available from the Provincial and territorial economic accounts (PTEA) and the Income and expenditure accounts (IEA) under the NPISH expenditure series.

The classification of the purposes of non-profit institutions
serving households (COPNI) classifies individual outlays of NPISH according to the purpose they serve. We must disaggregate the NPISH expenditure into COPNI categories and then allocate them to their corresponding household consumption series. This method for estimating STiK from NPISH is carried out at a provincial and territorial level.

To do this, we use final demand data for industries in the non-profit sector, available in the Supply-Use tables (SUT). The SUT based distributions of final demand for the non-profit industries are applied to NPISH expenditure to obtain STiK by household classification (which is aligned with the COPNI classification). The table below shows the final allocation of each STiK by COPNI classification to the corresponding household consumption series.

Using the concordance table above, we map NPISH’s final demand (from SUT) to household classification with some adjustments where no one-to-one match exists. To allocate a share for housing, we split other services provided by NPISH (NNP999999) into a portion that is attributed to services n.e.c. (COPNI 09) and a portion that is attributed to housing (COPNI 1). To estimate the amount towards housing, we use labour productivity data that is used to estimates GDP by industry. Specifically, we use the GDP by industry to estimate the share of housing associated NPISH industries in proportion to all NPISH industry. The industries are based on the North American Industry Classification System (NAICS). The housing industries consists of real estate and rental and leasing services (NAICS 53) and accommodation services (NAICS 721). We assume that other services provided by NPISH (NNP999999) contains services for environmental protection (COPNI 8) which is allocated to other services (C26).

Since the supply use tables are available with a 3-year lag, we use the T4 wages and salaries for the NPISH enterprises by NAICS to help estimate final demand growth trends for the years where SUT data are not yet available. The assumption that must be considered for this process is that the growth of final demand for a NPISH industry is positively correlated with the growth of the wages and salary for the industry. T4 wages and salary data is available up to t-1 which means we have the remaining final year of distributional shares to estimate. Since we lack an adequate source that confidently indicates the movement of NPISH industries, we carry forward the distributions from the year t-1 to the final year.

After the distributional shares are calculated, they are applied to distribute the benchmark NPISH expenditure by province. These estimates are the STiK from NPISH estimates. The STiK amounts are added to HFCE according to the concordance table.