VI. THE PRODUCTION ACCOUNT
E. Measurement of output produced for own final use
| 6.84. | Goods and services produced for own final use are included within the production boundary of the System except for domestic and personal services produced by members of households for consumption by themselves or other members of the same household. Goods and services produced for own use should be recorded as their production takes place. |
| 6.85. | The goods and services should be valued at the basic prices at which they could be sold if offered for sale on the market. In order to value them in this way, goods or services of the same kind must actually be bought and sold in sufficient quantities on the market to enable reliable market prices to be calculated which can be used for valuation purposes. When reliable market prices cannot be obtained, a second best procedure must be used in which the value of the output of the goods or services produced for own use is deemed to be equal to the sum of their costs of production: that is, as the sum of:
Intermediate consumption
Compensation of employees
Consumption of fixed capital
Other taxes (less subsidies) on production. |
| 6.86. | It will usually be necessary to value the output of own-account construction on the basis of costs as it is likely to be difficult to make a direct valuation of an individual and specific construction project that is not offered for sale. When the construction is undertaken for itself by a business enterprise, the requisite information on costs may be easily ascertained, but not in the case of the construction of dwellings by households or communal construction for the benefit of the community undertaken by informal associations or groups of households. Most of the inputs into communal construction projects, including labour inputs, are likely to be provided free so that even the valuation of the inputs may pose problems. As unpaid labour may account for a large part of the inputs it is important to make some estimate of its value using wage rates paid for similar kinds of work on local labour markets. While it may be difficult to find an appropriate rate, it is likely to be less difficult than trying to make a direct valuation of a specific construction project itself. |
Output of services for own consumption
| 6.87. | In practice, the recording of the production of services for own consumption is less common than for goods. Most of the services produced for own consumption by an enterprise (e.g., transportation, storage, maintenance, etc.) are produced by ancillary activities and are thus not separately identified or recorded either under the output or the intermediate consumption of the establishment or the enterprise to which it belongs. Domestic or personal services produced by members of households for each other are, by convention, treated as falling outside the production boundary of the System. There are, however, two specific categories of services produced for own final consumption whose output must be valued and recorded. |
Services produced by employing paid domestic staff
| 6.88. | Paid domestic servants, cooks, gardeners, chauffeurs, etc. are formally treated as employees of an unincorporated enterprise that is owned and managed by the head of the household. The services produced are therefore consumed by the same unit which produces them and they constitute a form of own-account production. By convention, any intermediate costs and consumption of fixed capital incurred in the production of the domestic services are ignored and the value of the output produced is deemed to be equal to the compensation of employees paid, including any compensation in kind such as food or accommodation. The same value is, therefore, recorded under the household's final consumption expenditures. |
Services of owner-occupied dwellings
| 6.89. | Heads of household who own the dwellings which the households occupy are formally treated as owners of unincorporated enterprises that produce housing services consumed by those same households. As well-organized markets for rented housing exist in most countries, the output of own-account housing services can be valued using the prices of the same kinds of services sold on the market in line with the general valuation rules adopted for goods or services produced on own account. In other words, the output of the housing services produced by owner-occupiers is valued at the estimated rental that a tenant would pay for the same accommodation, taking into account factors such as location, neighbourhood amenities, etc. as well as the size and quality of the dwelling itself. The same figure is recorded under household final consumption expenditures. |
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