Question

Why are the services of housewives not included in national income? Should they be included?

Answer 1

Services of housewives, such as cooking meals, cleaning, and caring for children, are not included in the calculation of national income because they are:

1. Unpaid and Non-Market Activities: These services are provided within the household and not exchanged in the market. There is no monetary transaction, so they lack a market value.
2. Measurement Difficulty: It is challenging to objectively quantify and assign a monetary value to the diverse activities performed by housewives, such as cooking, cleaning, child-rearing, etc. These tasks vary widely across households in both quality and quantity, making it hard to standardize their value.
3. Convention of Accounting Standards: Economic conventions and standards, such as those set by the System of National Accounts (SNA), generally exclude unpaid domestic services from national income to maintain consistency and comparability across countries.
4. Risk of Double Counting: Some services provided by housewives may overlap with services provided by the market (E.g., cooking vs. purchasing meals). Including both could result in double counting.