What is the Intellectual Property component of the USA's GDP?
May 9, 2014 1:30 PM   Subscribe

Any economics geeks out there who can point me to how the government calculates intellectual property now in GDP figures? Is there information on how they calculate the value of a movie versus a TV show versus a book? I've seen some articles that say news shows and newspapers don't count towards the intellectual component of GDP, but is there a thorough explanation anywhere?
posted by lostguy to Work & Money (5 answers total)
First, a little nitpick: GDP is a measure of production, not property.

The official overview is here, but really all you need to know is concept 2, "Whenever possible, GDP is valued at market prices." So if you pay $20 for that (new) book, it increases GDP by $20. There's nothing special about whether it's intellectual or nonintellectual production (and it would be impossible to categorize things that way anyway).

What you may be thinking about is the fact that GDP is primarily a market-based valuation, and there's a lot (and apparently increasing amount of) nonmarket production of information. How much did you pay for this answer? It's (hopefully) worth more than that to you. Twenty years ago, you wouldn't have had that value.

As this blog post states it (though in a slightly different context), "Another objection to GDP as a measure of economic welfare, also a criticism based on economics though now viewed a little more broadly, is failure to adjust for monetizable, but not monetized, economic values."
posted by Mr.Know-it-some at 1:45 PM on May 9, 2014

I remember a discussion in my long-ago econ class on the contribution of regulatory activities to GNP. (If FAA regs keep flying safe, what's that worth?) The answer was they get valued at what they cost. So. I imagine the output of an R&D lab would be counted as what it cost even if it invented something that would later add billions.
posted by SemiSalt at 4:19 PM on May 9, 2014

Response by poster: Mr know it some -- I guess I should have worded my question differently. I'm talking about this: http://blog.bea.gov/2013/07/23/gdp_changes/
which is the GDP change that incorporates r&d and investments in creating movies and books, etc...
posted by lostguy at 7:15 PM on May 9, 2014

Best answer: Table 6C in this file gets into some detail on that. If you still have questions that aren't answered there or aren't clear, I think contacting BEA directly would be your best bet.
posted by Mr.Know-it-some at 7:16 PM on May 10, 2014

Response by poster: I found articles from the BEA to be enlightening:

posted by lostguy at 2:01 PM on July 11, 2014

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