Browsing by Subject "timber"

To comprehensively study economic inequality and its development, Distributional National Accounts (DINA) base its inequality measures on the national income as a whole. Focusing on the national accounts part of the project, I follow DINA’s recommendations on modifying the concept of national income to cover some of the aspects it currently excludes. The three proposed modifications account for natural resource depletion, income from tax havens, and reinvested earnings on foreign portfolio investment. In this thesis, I apply all three modifications to the Finnish national income 1975–2022. To estimate the first, novel modification on the depreciation of natural capital, I combine a variety of data sources and methodologies on depletion of timber and minerals. The two modifications to foreign income flows have already been estimated by DINA, and my contribution lies in analyzing the results in the Finnish context. Although depletion of natural resources has gained wide attention, my thesis thus provides the first example where depletion of natural resources has been studied aside the two other modifications. I find that the modifications change national income by between 0.8 and - 5.8 % each year, the effect being largest at the beginning of the 21st century. Moreover, the modifications change the rate of growth in national income by approximately two percentage points each year 1998–2003. The results imply that the way natural resources and foreign income flows are recorded can significantly affect the level of national income and that the effect is not unequivocally negative.