Antonio Frenda

Given the underlying theoretical issues, this paper presents an estimate of the household durable stock obtained by applying the «Perpetual Inventory Method» (PIM). This method generates an estimate of the stock by accumulating the past purchase of assets over their estimated service lives. The net stock is calculated by subtracting accumulated consumption from the gross stock. Information on the average service life for different kinds of durable goods and hypotheses concerning their retirement functions are needed. The PIM has been applied under the assumption of fixed average service lives. A truncated bellshaped mortality function has been chosen to represent the retirement distribution. Time series of final consumption expenditure on durable goods have to be long enough to cover the assumed average service life. It is also necessary to use price indices to take into account the fact that the cumulated expenses have been made in different periods. Key words: Consumer durables, household consumption, average service life, retirement distribution, gross stock, depreciation, saving, wealth. JEL Classification: C43, D12.