RESEARCH PAPER NO. 833

CALCULATING AUSTRALIA'S GROSS HOUSEHOLD PRODUCT: MEASURING THE ECONOMIC VALUE OF THE HOUSEHOLD ECONOMY 1970-2000

by

FAYE SOUPOURMAS & DUNCAN IRONMONGER

JANUARY 2002

Department of Economics. University of Melbourne. Melbourne Victoria 3010 Australia

ABSTRACT

Although the Australian Bureau of Statistics publish quarterly national accounts, these accounts provide measures only for the market component of the valuable economic activities of Australians. Just about all the unpaid economic activities undertaken by Australians in households are excluded from these quarterly national accounts. The stark omission of unpaid work in these official statistics has resulted in the invisibility of non-market work done in the household economy. The development of nation-wide time use surveys has enabled economic statisticians to put an economic value on the time spent in all forms of unpaid work, including unpaid household and caring activities.

This paper presents estimates for a thirty year period of Australia's Gross Household Product (GHP), the economic value added by unpaid labour and the households own capital. In 2000 GHP was estimated to be worth $471 billion. Gross Market Product (GDP minus the imputed value of owner-occupied housing) was worth $604 billion in 2000. The household economy was nearly 80 per cent of the size of the market economy in 2000. More importantly, the GHP is nearly half (44%) of total economic activity (Gross Economic Product). The household economy absorbs more labour time than the market economy. In 2000 Australians spent about 15 per cent more time on non-market activities than market ones. The failure of statistical organisations to provide official estimates of the household economy (GHP) means that almost half of the total valuable economic activities undertaken by Australians are ignored by economists and policy makers.