# Imputations in GDP?



## Immolatus (Feb 20, 2011)

Someone posted this in the thread in this article from ZH (which is interesting enough, but I got hung up on this):
Why does GDP include imputations?


> Gross domestic product (GDP) is a comprehensive measure of the nation's production. In order to be comprehensive, it must include some goods and services that are not traded in the market place. Those components of the GDP are called _imputations_. Examples include the services of owner-occupied housing, financial services provided without charge, and the treatment of employer-provided health insurance.


A bank offers 'free' checking', and the gubt assigns a value to it to add to GDP.
Why not add in the value of a free ketchup packet at McD's since I wouldve had to pay for it otherwise?
Medicare etc. are assigned a value to the end user.
Your owner occupied house is assigned a monthly rental value to you in the amount of the rent you wouldve gotten had you been renting it out?
WTH? Imagine what it would be without these figures added in?


----------



## BillS (May 30, 2011)

The government wants GDP numbers to look better. That's why they're doing this.


----------



## hiwall (Jun 15, 2012)

Of course Bill is correct. And my first reaction was who are they going to fool with this stupid act. Then I realized it would be about 90% of the population.


----------



## goshengirl (Dec 18, 2010)

It's probably for the same reason that gas and groceries aren't included in the inflation figures... 

ETA: _All _those figures make me so mad, because they are _all _manipulated. I honestly don't know how/why they can get away with it.


----------



## The_Blob (Dec 24, 2008)

to be fair, only owner occupied houses with no 'mortgage' are included as an imputation

you can bet your arse taht all of those free condiments show up on a budget sheet as 'non-recoverable consumed assets' or some such horseshit


----------



## PrepN4Good (Dec 23, 2011)

I'm not great with words, so how can I put this...? Oh yeah: :brickwall:, as well as :gaah:


----------



## BillS (May 30, 2011)

goshengirl said:


> It's probably for the same reason that gas and groceries aren't included in the inflation figures...
> 
> ETA: _All _those figures make me so mad, because they are _all _manipulated. I honestly don't know how/why they can get away with it.


They get away with it because the media is on their side. We saw it today with everybody in the media blaming Bush's attacks on Afghanistan and Iraq for the Boston terrorist bombings. Not surprisingly, nobody blamed Obama for having Osama Bin Laden killed and then spiking the football over and over again during the campaign. They also didn't blame Obama for continuing to be submissive before Islam and doing his best to appear weak.


----------



## Woody (Nov 11, 2008)

I heard on NPR this morning about this. They also NEED to add time spent doing things. Two specific examples I remember are the time a singer uses to come up with a song and the time someone spends developing an idea. People are spending a lot of time developing things and those numbers are not being taken into account in GDP. I just had to laugh. Doesn’t whatever profit they make on whatever they write or produce provide for their time spent developing it? If it is good and people buy it they make a lot of profit, if it sucks and no one buys it they make nothing. Ahhh… I keep forgetting, that is the OLD way of looking at capitalism not the NEW way it really works.

And I do agree it is to try and make the numbers look better. Which really means nothing because they could just make up numbers, who would know! And I agree again it is the reason they do not put food or energy costs in their calculations, it would look horrible.


----------



## Immolatus (Feb 20, 2011)

*



it is the reason they do not put food or energy costs in their calculations, it would look horrible

Click to expand...

*Whatever can you mean? Inflations not 1.7%? Thats what the tell me, as I shop for groceries with my eyes closed, so I just take their word for it.


----------



## Woody (Nov 11, 2008)

My mommy does the shopping and cooking. She calls me when dinner is ready and I come up out of the basement, eat, then go back down to my computer.


----------



## Elinor0987 (May 28, 2010)

The people who write up the GDP reports are really good at lying. I bet they would make a fortune running a side business writing resumes for people.


----------



## BillS (May 30, 2011)

The_Blob said:


> to be fair, only owner occupied houses with no 'mortgage' are included as an imputation
> 
> you can bet your arse taht all of those free condiments show up on a budget sheet as 'non-recoverable consumed assets' or some such horseshit


That used to be true. And that was bad enough. But now it's worse.

http://www.americanthinker.com/blog...c_numbers_they_aint_what_they_used_to_be.html

New GDP inputs

And it has been recently announced that the government will recalibrate the GDP calculation. Not surprisingly, the new calculation will bump up the GDP reading. (Imagine if they recalibrated the inflation calculation.)
The Bureau of Economic Analysis (BEA) which calculates the GDP estimates has announced it will begin taking into consideration subjective intangibles as part of GDP. Included will be research and development, movies, TV shows and other "artistic originals". This will inflate the GDP by as much as 3%.
2 + 2 = 5 when extremely large values of 2 are considered.

What will be considered R and D? What value is placed on failed research that leads to no development? The GDP is a measure of product, by definition. If nothing is produced, how can the money expended in that failed research and lack of development be registered in such a calculation as GDP? What value is assigned to R and D that is being conducted to duplicate a competitor's product, a product already in the market? There is good reason why research and development has been considered an expense rather than a capital item.


----------



## BillS (May 30, 2011)

Imputed rent is bad. A place like ours would cost about $700 a month to rent. That would add $8400 a year to GDP. If you assume that our income is the national average and that average is $51,000 a year then adding rent artificially adds 16% to our income.

This article talks about imputed GDP:

http://miscellaneous-economic-ramblings.blogspot.com/2009/06/gdp-imputations.html

"(Roughly 15 % of US GDP is due to imputations. My guess is that at least half of this is imputed rent. "


----------

