built, to the maximum extent possible, using existing or already planned information, minimizing the extent of any new data collection.
In addition to the above-described data, which relate mainly to labor inputs, a complete nonmarket account must include values of nonlabor inputs. For example, a home production account must include data on the capital services, materials, and energy inputs that complement unpaid labor in generating home-produced outputs. Purchases of materials used in home production already are included in the NIPAs, as consumer goods on the production side and as returns to capital, labor, and other inputs on the income side. The NIPAs also include spending on consumer durables, such as refrigerators and washing machines, though the annual flow of services associated with the stock of consumer durables does not correspond on a year-by-year basis with spending on purchases of consumer durables in the same year (see Fraumeni and Okubo, 2001). In accounting for household production, it is the flow of services from these durables that is relevant and for which data are required.
Full development of nonmarket accounts also will require further research and data development to advance understanding of age-old questions relating to the definition and measurement of output. What are the outputs of the various nonmarket activities? Zvi Griliches observed that “in many service sectors it is not exactly clear what is being transacted, what is the output, and what services correspond to the payments made to their providers” (Griliches, 1992, p. 7). This observation is especially pertinent for many of the areas of interest here that are dominated by services—and services difficult to measure at that—such as education, health, social services, culture and the arts, and recreation.
The need for development of better measures of nonmarket outputs can be illustrated with reference to education and health. Frequently, in difficult-to-measure sectors, the value of output is set equal to the aggregate value of the inputs used in its production. Accordingly, little is known about growth, quality improvements, or productivity in these sectors. In recent years, alternative approaches have been developed for estimating educational output more directly. Examples of these approaches include indicator (e.g., test-score based) approaches, incremental earnings approaches, and housing value approaches. Similarly, for a health account, data on the population’s health status, of the sort now being developed in disease state and health impairment research, hold promise of providing direct measures of the output of the health sector. The data that will be needed to create these output measures, as well as the data required to construct defensible measures of other sorts of nonmarket production, are discussed at the appropriate points in Chapters 3 through 8.