household capital, and also in other aspects of household technology, such as economies of scale, are quite significant. Hence an output-based approach may yield substantially different results from an input-based approach, especially for comparisons across societies or over time. While the statistical offices of Australia and Canada largely rely on valuations based on labor inputs and wages, the statistical office of the United Kingdom has adopted an output-based approach. There is no a priori reason for the value of an output-based measure of a household’s expenditure on home-produced nonmarket items to equal the value of an input-based measure. Although discrepancies also may exist in the NIPAs for market-produced goods, the source of discrepancies in the nonmarket context is different. In the market case, the two should in principle be equal; that they are not can be attributed to the fact that data sources on the income and product sides differ and to measurement error. In the nonmarket case, there is no conceptual reason that the two valuations should be the same.
By suggesting that satellite accounts for household production include independent output- and input-based measures, each based on measures of quantities and prices, we are recommending an approach that allows a more accurate understanding of the value of home production to be obtained than is possible in systems that rely on one of these two approaches alone. As discussed in Chapter 1, national income accounting methods emphasize the importance of double-entry accounts that estimate the value of inputs and outputs, costs and expenditure. Although we think that measuring quantities and values of inputs and outputs separately is the right way to structure this endeavor, we do not know enough or have the information necessary to implement this principle fully at the present time. Thus, while we believe it is clear conceptually what ought to be done, further research undoubtedly will be needed to make the preferred approach practical.
The data appropriate to constructing measures of hours devoted to household production must necessarily come directly from recording people’s activities in their homes. The activities listed in Table 3-2, for example, are some of the 87 categories into which all activities were coded in the 1985 time-use survey. One of the many crucial benefits of time-budget surveys is that they force the aggregate of time devoted to all activities to equal 1,440 minutes per day for each person. Until recently, time-diary data for the United States were not routinely available. Fortunately for purposes of constructing satellite accounts during this decade, this situation is changing with the introduction of the American Time Use Survey in January 2003 (discussed in Chapter 2).