Development of Estimates for Household Production of Non-Market Services in OECD Countries for the Index of Economic Well-Being

Abstract

With one notable exception, the production of non-market services produced and consumed by households is currently not included in the System of National Accounts. The activity, however, represents an important aspect of a country’s material well-being. This research note contains a literature review on the different methods of valuing household production of non-market services. The research note also incorporates estimates of household production of non-market services for various OECD countries into the 2008 Index of Economic Well-Being (IEWB) to examine how it affects the countries’ ranking in the Index. We find that including estimates of household production of non-market services into the consumption flow portion of the 2008 IEWB for OECD countries reduces the gap in total consumption flows per capita between the United States and the other OECD countries. The relative ranking of countries according to consumption flows per capita in the 2008 IEWB for OECD countries changes slightly after the inclusion of household production of non-market services.

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