It consists of the expenditure incurred by resident households on individual consumption goods and services, including those sold at prices that are not economically significant.
Examples are health services provided by governments or reimbursed by a social security fund, education services, the part of service provided by public museums, concert halls, operas, swimming pools that is not financed by entrance fees, aid for social housing etc.
Actual final consumption of households excludes the general government's collective consumption expenditure which is expenditure on goods and services that cannot be uniquely attributed to households (e.g. expenditure on defence, safety and order, home affairs, environmental protection, national bodies such as parliament, governments etc.).
A high government share in the provision of individual consumption goods and services is often found in countries known as welfare states.
Countries with relatively large shares of such transfers in kind are Belgium, Denmark, France, Luxembourg, the Netherlands, Finland and Sweden, where HFCE represents less than 80% of actual final consumption of households for most years.