In defining the production boundary, 93SNA draws on the distinction between goods and services. The production of all goods are included within the production boundary, while for services those produced for own final consumption within the household are excluded.
This means for instance that rice produced by households for own final consumption is included, while the production of child-care by households for own final consumption is excluded. Included, however, is the services of owner occupied dwellings, and the production for own final use by employed paid staff. The arguments for not taking into account the production of services for own final consumption is that it is a self-contained activity with limited repercussions on the rest of the economy, and that these services are difficult to value.
All illegal production should be included. A comprehensive coverage of illegal production is necessary in order not to introduce imbalances in the accounts. E.g., A household spends money on illegal products, if this is not accounted for the result will be over-estimation of savings and imbalances with the financial account.
The inclusion of illegal production, as well as services of owner occupied dwellings and production of goods for own final use are also important when national accounts is used as basis for inter-country comparisons.
Furthermore, in order to compare over time is the inclusion of all informal activity extremely important. One important reason is that whenever there is a recession in the economy, people are laid off and some will move to the informal part of the economy in order to survive, and vice versa. Thus, if the informal activity is not covered, the national accounts growth rates will exaggerate the ups and downs in the economy. There is a fact that most countries have problems measuring the informal sector. Some includes a guesstimate, however, there is a chance that ups and downs might be somewhat overestimated in countries in which the informal sector is an important part of the economy.
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