I’ve been sick the last few days and to pass time I watched a Video from Geopolitical Economy Report, where he states that about 8 percent of the US GDP (I know that that measurement is shit, but it’s still the most used one) is attributed to imputed rent from owner-occupied housing and therefor bullshit.

I tried to read up a little on the topic because I have trouble believing that such a bogus figure is included in the GDP, because it doesn’t add value. Everything you do in your own home is not work that ‘benefits’ the economy and if you hire contractors or buy materials it’s already included in the GDP. Though the reading material I found is either full of jargon or skips this question.

So now I hope that someone knowledgeable can clarify this: is this rent imputation really just padding for the GDP or does it server another purpose?

Material I used:

• Why does GDP include imputations? (bea.gov link)
• Imputing Rents to Owner-Occupied Housing by Directly Modelling Their Distribution (bea.gov link, abstract of paper, leads to pdf)
• Imputing Rent (NATO-Pedia link)

And footnote: It’s very telling, that capitalist countries view rent as an important part of their economy