ucts if the human capital produced through educational activities were treated as the relevant output. And many of the inputs to medical care are included, but the accounts contain relatively little separate information about the value of the services provided or the health capital formed.

For the cases we have elected to explore, the conventional accounts generally do not reflect the full range of inputs used in the production of the output of interest. And in no case is the value of the resulting output, whether goods and services produced for current consumption or the creation of a productive asset, measured fully and independently of the value of the inputs used in its production. Independent measurement of output entails estimating prices and quantities of that output, as opposed to building up valuations from cost side factors.

Satellite Accounts

While acknowledging the limitations in their coverage, the panel is not proposing that the scope of the existing NIPAs be expanded to encompass currently omitted nonmarket activities. The existing core accounts have the important virtues of consistency over time, hard-won comparability across countries, and, aside from a limited number of agreed-upon imputations deemed necessary for certain nonmarket activities, solid grounding in observed market transactions; we would argue strongly that they should be preserved. Likewise, the statistical agencies should not develop a comprehensive measure of total economic output as a substitute for the existing GDP measure. Even at a conceptual level, there is no consensus about what an appropriate replacement for the existing measure of GDP might be. We expect that data from the satellite accounts we advocate will allow researchers to develop a variety of expanded GDP measures. It would be premature, however, to endorse a specific measure—indeed, it seems unlikely that a consensus around any one measure ever will develop.

Instead, we recommend the development of satellite accounts to report on selected activities not included in the conventional accounts. Satellite accounts can link to the existing economic accounts as appropriate, but also expand into areas that the NIPAs do not cover. Furthermore, satellite accounts can be developed even where standards of accuracy and data quality are not up to the level of the NIPAs, without compromising the conceptual basis or technical integrity of the conventional accounts. Similarly, where no consensus yet exists regarding the best way to measure a particular area of nonmarket activity, satellite accounts allow for the flexibility to experiment with alternative methodologies that might go against convention. The goal is to extend the accounting of the nation’s productive inputs and outputs, thereby providing a framework for examining the production functions of some difficult-to-measure nonmarket activities.

The idea of satellite accounts is not a new one. The BEA has long conducted research on topics beyond the scope of the conventional accounts. A representa-



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