Incorporating Estimates of Household Production of Non-Market Services into International Comparisons of Material Well-Being

This paper reports on work undertaken within the Statistics Directorate to measure the value of household production of non-market services, in order to better compare material well-being across countries. The work is being conducted under the aegis of the National Accounts Working Party and as input into the broader OECD activity on Measuring Progress. It responds to the growing recognition of the need to place a greater emphasis on the development of statistics that focus on the household perspective. The study shows that at a national level the estimates are acutely sensitive to the value placed on labour used in producing these services. However, it also demonstrates that relatively robust cross-country comparisons are obtainable using estimates converted on a purchasing power parity basis. For China, for example, GDP per capita relative to the United States improves by 50% when all household production of non-market services is included. Indeed the study demonstrates that including these services is particularly significant for comparisons of 'richer' and ' poorer' countries...