rather than consumption, and that its value should be assessed in terms of the returns on that investment rather than the cost of the inputs used in its production. The conventional accounts do not include changes in the asset value of human capital production associated with education, health care, and other personal investment activities. Available estimates are rough, but suggest that the value of the human capital stock may be as large as that of the physical capital stock (see Kendrick, 1967, and, for a more recent discussion in the context of analyzing economic growth, Mankiw et al., 1992).
Although the importance of nonmarket—but productive—endeavors has long been recognized, few attempts have been made to provide systematic information about even the most quantitatively significant of them. Economic accounting need not, and should not, extend to all nonmarket activities, but there are certain areas in which nonmarket accounts, designed to supplement the NIPAs, could make particularly important contributions. We stress the potential value of new methods of accounting for home and volunteer production efforts, education, health, and environmental improvement or pollution.
Given that limited coverage of the NIPAs has long been recognized, why is this report needed at this time? The existence of economically valued nonmarket inputs and outputs is already widely recognized. Examples are easy to find: the higher value of a house sold after improvements are made by the homeowner; the meals that a nonprofit soup kitchen serves to the homeless; or the increase in the productive capacity of the economy attributable to extensions of working life resulting from modern diabetes treatments. But information about these productive activities is not systematically compiled and routinely updated as are the NIPAs and other market-based accounts. The state of nonmarket accounts today resembles the situation for market-based accounting in the 1920s and 1930s before the creation of the NIPAs—new data were becoming available, but they were not organized and published in a systematic accounting framework. Advances in data collection and in economic analysis of nonmarket activities merit the review that appears in this volume. One event alone—the development and recent publication of the American Time Use Survey—justifies a new round of thinking about nonmarket accounting issues. In this report we hope to encourage social scientists to pursue the analysis of nonmarket activities and the development of corresponding data collection and accounting systems. We also point out new ideas and new data sources that have improved the prospects for progress.
The Panel to Study the Design of Nonmarket Accounts was charged with evaluating current approaches, determining priorities for areas of coverage, examining data requirements, and suggesting further research on nonmarket accounting. The panel’s charge includes four specific tasks:
to review efforts to develop nonmarket accounts by government agencies, as well as by private organizations and scholars, including theoretical as