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A Solution to the Estimation of an Enlarged GDP Including Domestic Production: An Estimation on Micro Data

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  • François Gardes

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Paris 1 Panthéon-Sorbonne, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UCO - Université Catholique de l'Ouest)

Abstract

Using a generalization of the Becker's time allocation model to estimate the shadow price of time, the article proposes to evaluate the component of home production which could be substituted by market goods and services. An enlarged households' total expenditure including the production of the informal sector and the value of domestic production and the corresponding enlarged GDP are compared to their monetary counterparts in five developed and underdeveloped countries. Domestic production substituable to market goods corresponds to 23 to 41% of the GDP in Canada, France, Poland and the US, but much less in Burkina Faso because of much lower opportunity cost of time and elasticities of substitution. Finally, the enlarged GDP including the informal sector is larger by 40% than the official GDP in the three developed countries, 34% in Poland and by 54% in Burkina Faso.

Suggested Citation

  • François Gardes, 2021. "A Solution to the Estimation of an Enlarged GDP Including Domestic Production: An Estimation on Micro Data," Post-Print halshs-03325362, HAL.
    • Handle: RePEc:hal:journl:halshs-03325362
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03325362
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    References listed on IDEAS

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    11. François Gardes & Noël Thiombiano, 2017. "The value of time and expenditures of rural households in Burkina Faso: a domestic production framework," Documents de travail du Centre d'Economie de la Sorbonne 17027, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
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    Keywords

    Domestic production; Time allocation; GDP; Opportunity cost of time;
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