4
Data Needs

At this point in the panel’s work, it is too early to describe in detail the data needs for expanding the U.S. economic accounts to include nonmarket activities. The range of perceptions about the adequacy of conventional economic accounts results not only from different views on objectives and models, but also from different views concerning the costs of obtaining information. A number of economists admit to the deficiency of the conventional accounts but argue that data limitations preclude the possibility of making practical modifications.

The types and amount of data required depend on the proposed structure of the accounts. It is difficult to speculate on data needs without a sense of what the data system is supposed to accomplish and how various pieces of data can contribute to the objectives. An accounting structure that maintains a distinction between inputs and outputs can be costly in terms of the amount of data required. For instance, the U.N. System of Integrated Environmental and Economic Accounting (and its Bureau of Economic Analysis counterpart, the Integrated Environmental and Economic Satellite Accounts) does not make the input-output valuation distinction and, thus, requires much less data than some other nonmarket efforts that do.1 Similarly, social indicators require much less data than a fully developed input-output (double-entry) set of accounts. Without this conceptual background, it is easy to end up with a hopelessly extensive laundry list of data “needs,” without any realistic chance of implementation.

More conceptual thinking is needed in order to attain some balance between the often large incremental costs of data development and the value these data may make to

1  

Examples are the Environmental and Natural Resources Accounting Project (Philippines) and a set of U.S. accounts funded by the Environmental Protection Agency some years ago.



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4 Data Needs At this point in the panel’s work, it is too early to describe in detail the data needs for expanding the U.S. economic accounts to include nonmarket activities. The range of perceptions about the adequacy of conventional economic accounts results not only from different views on objectives and models, but also from different views concerning the costs of obtaining information. A number of economists admit to the deficiency of the conventional accounts but argue that data limitations preclude the possibility of making practical modifications. The types and amount of data required depend on the proposed structure of the accounts. It is difficult to speculate on data needs without a sense of what the data system is supposed to accomplish and how various pieces of data can contribute to the objectives. An accounting structure that maintains a distinction between inputs and outputs can be costly in terms of the amount of data required. For instance, the U.N. System of Integrated Environmental and Economic Accounting (and its Bureau of Economic Analysis counterpart, the Integrated Environmental and Economic Satellite Accounts) does not make the input-output valuation distinction and, thus, requires much less data than some other nonmarket efforts that do.1 Similarly, social indicators require much less data than a fully developed input-output (double-entry) set of accounts. Without this conceptual background, it is easy to end up with a hopelessly extensive laundry list of data “needs,” without any realistic chance of implementation. More conceptual thinking is needed in order to attain some balance between the often large incremental costs of data development and the value these data may make to 1   Examples are the Environmental and Natural Resources Accounting Project (Philippines) and a set of U.S. accounts funded by the Environmental Protection Agency some years ago.

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accounting objectives. For example, many people might agree that more timely, more complete, and more detailed information on time-use within the household is needed. But does this mean establishing huge longitudinal surveys with minute-by-minute electronic diaries covering every household member? Probably not. Something less ambitious and costly may do. But how much less ambitious? How much is needed over and above the time-use data that the Bureau of Labor Statistics (BLS) is already collecting? Data requirements all crucially depend on assumptions embedded in the conceptual model. For example, conventional national accounting implicitly assumes that the value of government-supplied education equals its cost. For its nonmarket environmental accounting, the U.N. implicitly assumes that the value of environmental degradation equals the costs of restoring the environment to a pristine state. Without some theoretical underpinnings, it is not possible to determine whether these assumptions are "good enough." The biggest factor affecting the need for new data is simply the availability of existing data. Even among accounts that use essentially the same theoretical framework, the data requirements (that is, the amount and type of additional data that must be assembled) may vary widely because of vastly different levels of current data and resources available for data collection. The panel tentatively plans to determine data requirements in the following manner: (1) establish an accounting framework that meets useful nonmarket accounting objectives; (2) specify the general sorts of data consistent with realistic implementation of the framework; (3) survey existing data that may be available; (4) identify gaps and assess them as to their relative importance in precluding the accounting objectives, and (5) specify meaningful ways that the important gaps could be filled, either through new data collection or by developing suitable proxies based on theoretical considerations. It is, at this time, appropriate to offer a few words about the BLS’s soon-to-be-released time use data. Consensus is fairly widespread that the single most important information required for nonmarket accounts is data on how the population spends its time. Like its market analogue, the most pervasive input in nonmarket production is often time—both market and nonmarket.2 This is particularly true in such areas as education, human capital development more generally, and home production. Data on market inputs, such as home and materials, exist, though the underlying production function indicating how these inputs are combined is not well understood; the big missing piece of data is for time, a not-always-marketed input. The American Time Use Survey (ATUS), conducted by the BLS in 2003, will represent a huge step forward in assessing time devoted to household production and will make it possible to provide estimates of the value of household production similar to those currently provided by the Australian Bureau of Statistics and Statistics Canada. ATUS began in January, 2003, collecting time diaries every month from roughly 2,000 unrelated individuals who had completed their tenure in the Current Population Survey in the previous month. Each year this survey will generate the largest number of diaries of any time-budget study in the world. Most important, by putting time-budget surveys on a 2   An exception is the production of government services, as well as inputs to nonmarket environmental capital (e.g., clean air and water, public beaches) that enter into all kinds of human welfare-producing activities related to goods, such as recreation and health.

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continuing and regular basis, ATUS will allow the creation of a time series of time inputs into a consistently defined set of activities that can be used to construct quantity measures for satellite accounts. Indeed, it is only with the development of ATUS that the inclusion of household production in an on-going system of satellite accounts has become possible. While ATUS lacks some desirable features offered by the smaller, irregular time-budgets conducted in some other countries, its large sample size, its on-going character, the expected high quality of the data collected, and the categories into which the time allocations are placed make it well suited for the purposes envisioned by the panel. Yet, ATUS may not provide adequate information for understanding the nature of care work within the household, which often involves constraining responsibilities rather than direct activities. For instance, specific survey modules (e.g., regarding child care and elder care) may need to be designed that could complement the basic ATUS and help capture the more qualitative dimensions of both inputs and outputs of family care. Such modules would contribute to complementarities between the panel's efforts to assign a value of health outcomes and earnings-related human capital, both of which are strongly affected by inputs of household or family time. In order to move toward the type of output valuation described in this report, researchers would need better organized data not only on household capital, but also on forms of market capital and public capital that have significant effects on the productivity of household time. Such data would need to cover, for example, not just the development of new consumer durable goods like microwave ovens, but also the impact of ATMs and price scanners on time devoted to money transactions and shopping, of broadband and satellites on household entertainment time, and of public investments (such as electricity, water, transportation). While such data exist, they are not organized in a clear or coherent, much less user-friendly way. In addition to its obvious role in constructing a household production account, ATUS will also provide data essential to accounts covering other areas of nonmarket activity for which time is a key input—such as health, volunteer activities, and human capital. For purposes of health accounting, ATUS may be useful in generating improved estimates of family members’ and patients’ time in treatment and time exercising or sleeping. These inputs, along with such others as time reading to children or studying, will contribute to work on human capital. Because time use is the theme that links most of the nonmarket areas, an integrated account could be based on ATUS as a starting point; additional information to help measure outputs could possibly be added to future versions of this survey.