The Value of Everything: Making and Taking in the Global Economy

by Mariana Mazzucato

By contrast, it is remarkable how national accountants go to great lengths to include inside the production boundary the house itself, the property in which the supposedly unproductive household work is done. In the national accounts, houses owned by their occupants generate services that are included in GDP. In the US, such ‘work’ contributes 6 per cent of GDP–that is, a cool $1 trillion–even though none of these dollars actually exist. How do the statisticians come up with such an absurdity? They impute a rent to everyone who lives in their own home. A market rent is estimated for a property which the owner-occupier then pays herself as lessor for the services the house provides. Since the imputed rent is regarded as income, it is also recorded in the national accounts as production. Accountants justify this with the argument that ‘both international and inter-temporal comparisons of the production and consumption of housing services could be distorted if no imputation were made for the value of own-account housing services’.31