Income, consumption, and prices Income, consumption, and prices 1. Developments within income and consumption Couples with children earn most When considering families, couples with children had the highest average income after taxes in 2001; their annual average was DKK 327,200. The corresponding figure for couples without children was DKK 271,000. When carrying out such comparisons, it should be noted that couples without children are normally older than couples with children, and that children may contribute to total family in- comes to some extent. For couples with children and couples without children, incomes went up from 1990 to 2001 by 58.6 per cent and 60.9 per cent, respec- tively. Figure 1 Average family income after taxes DKK thousands 350 300 250 200 1990 150 100 2001 50 0 Couples Couples Single Single Single Single Adults without with men men women women living children children without with without with with their children children children children parents Men earn the most In 2001, the average personal income for persons aged 15 and above was DKK 212,300. Men had larger incomes than women, as the average income of men was DKK 251,400, while the average income of women was DKK 174,800. However, since 1984, women’s incomes have increased at higher rates than men’s: whereas men’s incomes have increased by 88 per cent, women’s incomes have increased by 123 per cent. Figure 2 Average personal income, by age group 2001 DKK thousands 400 350 300 250 Men 200 Wo me n 150 100 50 0 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75 + Statistical Yearbook 2003 Income, consumption and prices 1 Income, consumption, and prices Geographic distribution of family income The average family income was DKK 319,000 in 2001. The highest average family incomes were recorded in the Metropolitan area in the municipalities outside Copenhagen municipality. Family income was DKK 574,200 in Søllerød, in Hørsholm DKK 544,300 and in Gentofte DKK 516,800. The outlying municipalities accounted for the lowest average family incomes with DKK 251,900 in Tranekær, DKK 251,900 in Ravnsborg and DKK 256,300 in Sydlangeland. Only five municipalities had a lower average family income than Copenhagen with DKK 263,800. Figure 3 Average family income before taxes in municipalities 2001 370.000 - 573.400 DKK 340.000 - 370.000 DKK 320.000 - 340.000 DKK 300.000 - 320.000 DKK 280.000 - 300.000 DKK 260.000 - 280.000 DKK 244.900 - 260.000 DKK © Kort- og Matrikelstyrelsen (G. 5-00) Personal income, by socio-economic status When considering personal incomes as they relate to socio-economic status, we see that only 1.7 per cent of all top-level managers (salaried employees at upper le- vels) made less than DKK 200,000 in 2001. When considering the other end of the scale, 89.6 per cent of all pensioners, 88.6 per cent of all unemployed people, and 99.8 per cent of all students had incomes of less than DKK 200,000. 2 Income, consumption and prices Statistical Yearbook 2003 Income, consumption, and prices Figure 4 Distribution of personal income, by socio-economic groups 2001 Self-employed & ass. Spouses < DKK 100 000 Top managers Employees, higher level DKK 100 000 - 199 999 Employees, medium level Employees, basic level DKK 200 000 - 299 999 Other employees Unemployed DK K 300 000 + Receiving education Pensioneers, etc. Others not economicalley active 0 102030405060708090100Per cent 2. How is income spent? The main part is spent on consumption The household budget survey carried out by Statistics Denmark, which involves a study of private-household finances, makes it possible to see how total household income is spent. According to the somewhat wider concept of income in the con- sumption survey, an average 2000 household has a total income of DKK 417,529. This figure does not include an additional DKK 967 from net payments from capital-pension schemes. A large part of this income was not, however, at the disposal of the household due to income tax, etc., and any interest payable on household debts (including mortgages) – DKK 157,940. The amount left to average households was DKK 260,556. The main part of this amount was spent on consumption - DKK 227,283 - while DKK 27,697 was used for savings (including pension savings and savings tied up in real property). The remaining DKK 5,576 was spent on membership fees, gifts, and charity. Figure 5 How income is spent in selected households – per cent of total income 2000 Self employed Income taxes, etc. Interest payments, etc. Employees Consumption Savings Pensioners, etc. Charity, membership fees, etc. Other persons not economically active -10 0 10 20 30 40 50 60 70 Per cent Statistical Yearbook 2003 Income, consumption and prices 3 Income, consumption, and prices Employee households pay most in income taxes Figure 5 shows how in 2000, employee households constituted the group where income taxes, etc., accounted for the largest percentage of the total income. Pen- sioner households and other households made up of persons who were not eco- nomically active (social-security recipients, students, etc.) were characterised by spending a considerably greater percentage of their income on consumption, while their savings were much smaller; indeed, the group of other persons not economi- cally active had negative savings. On average, households of people which were not economically active took out debt or lived by "dipping into" their savings. Households differ a lot When assessing these differences, it should, be noted that households vary greatly in nature. Households where the main breadwinner was self-employed or an em- ployee were significantly larger than other households; this type of household was home to respectively 2.6 and 2.4 persons per household on average, whereas the corresponding figure for pensioners’ households was 1.4 and for other households 1.9 persons per household. Total income, incl. capital-pension schemes, was significantly lower in households which were not economically active: the average income for pensioners’ households was DKK 229,812, while the average income for households of other persons not economically active was DKK 227,813. Self-employed earn more than employees Households where the main breadwinner was self-employed had an average total income of DKK 636,854, while the average income of employee households was DKK 517,754. In this context, it is important to remember that both of these groups of households are quite inhomogeneous. Self-employed people include owners of large enterprises as well as small, independent greengrocers, just as the employee group covers everyone from top managers to check-out clerks, etc. Self-employed account for the highest increase in consumer spending Figure 6 shows the development in consumer spending of households from 1994 to 1999. The statistical data are compiled at current prices, implying that inflation is not taken into account. Self-employed account for the highest increase (34 pct.), while consumer spending of employees only increased by 17 pct. The varying de- velopments for the different groups can both be attributed to the varying develop- ments of the groups as a whole but also the possible changes in the composition of each group. Figure 6 Change in consumer spending from 1995 to 2000 DKK per household 350 000 300 000 Others 250 000 200 000 Transport 150 000 Dw el li ngs, el ectr ici ty 100 000 50 000 Food, clothing etc. 0 1995 2000 1995 2000 1995 2000 1995 2000 Self-employed Employees Pensioners Others 4 Income, consumption and prices Statistical Yearbook 2003 Income, consumption, and prices The most money was spent on housing Figure 7 illustrates how housing constituted the largest single consumption item, as housing consumption accounted for 22 per cent of total consumption in 2000, i.e. rent in rented accommodation and imputed rent in owner-occupied housing, plus maintenance, etc. This figure does not include an additional 7 per cent for heating and electricity. Food, beverages, and tobacco accounted for 17 per cent, which corresponds to the amount spent on transport, etc. The fourth-largest ex- pense item was Other goods and services, which includes expenditure on educa- tion and child care, restaurants and hotels, various services, insurance, etc. Recrea- tional equipment and entertainment accounted for 11 per cent, while clothing and footwear only accounted for 6 per cent Figure 7 Consumption by goods/services 2000 Food, beverage, and tobacco 17 per cent Clothing and footwear 6 per cent Housing 22 per cent Fuels and electricity 7 per cent Furniture, etc. 6 per cent Transport, etc. 17 per cent Medical products and services 2 per cent Recreational equipment, entertainment etc.11 per cent Other goods and services 13 per cent Consumption of wine and beer decreased, alcohol consumption increased In 2002, the average alcohol consumption per citizen was 9.2 litres of pure alco- hol, which is a fall compared to the year before. Beer consumption increased until the beginning of the eighties, and has declined since then. In contrast, wine consumption has increased throughout the entire period from 1955, except for a slight decline from 1997 to 1998 and again from 2001 to 2002. Spirits consump- tion peaked in 1976 and has declined gradually since then, until reaching a relatively stable level during the nineties. Consumption of spirits decreased 1.1 per cent from 2000 to 2001, but increased again with 2.4 per cent the year after. Figure 8 Total consumption of dutiable alcohol 1955-2002 Thousand litres, 100 % proof. 60 000 50 000 Spirits 40 000 Wine 30 000 Beer 20 000 10 000 0 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 Statistical Yearbook 2003 Income, consumption and prices 5 Income, consumption, and prices Tobacco consumption decreased slightly in 2002 Cigarette consumption decreased during the eighties and reached a stable level during the first half of the nineties.