Imputed and Missing Information (II)

If you take your car to a mechanic, the services performed on the car end up as part of measured real GDP. But if you and a friend repair your car, these services are not included in the statistics. The biggest category of do-it-yourself services left out of the official GDP statistics consists of those performed in the house by homemakers.
It is widely estimated, for example, that the weekly value of a homemaker’s services is several hundred dollars, none of which is included in the official figures for real GDP. Then there is the matter of the huge volume of transactions— hundreds of billions of dollars per year—in markets for illegal and underground activities. In some “true” measure of real GDP, we should probably add in these activities, which include prostitution and the illegal drug trade, because such goods and services presumably generate satisfaction to the individuals purchasing them.
We should also include “underground” income that is the result of legal activities but is not reported. (See Chapter 2 for more on this.) Some of this income goes unreported by individuals hoping to evade income taxes. But it also includes much of the income earned by illegal immigrants, who do not report their incomes simply because they do not wish to be deported.