Government real estate numbers are a load of crap

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The Bureau of Economic Analysis uses a wholly bogus imputed rent variable in its calculations about the health of the US economy and the health of the real estate industry.

BEA treats homeowners as businesses, which pay rent to themselves. Therefore, homeowners contribute to the real estate industry’s GSP even if not employed by the industry.

Talk about artificially inflating economic figures to make things look better than they are. This is akin to saying that if you own an iPod, you’re essentially running an iPod rental business, renting your iPod from yourself every month.

Does that make any sense at all to you? It doesn’t to me – and that means that the numbers on things like productivity, inflation, and the economic health and well being of the country are flawed.

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10 responses to “Government real estate numbers are a load of crap”

August 29, 2008

Ari Herzog

Interesting, Chris. Delving into Google, I see you only have half the story. Tenants also are computed.

Here's an extract from the <a href=”http://nahbregistration.com/generic.aspx?sectionID=734&genericContentID=92268&channelID=311″>National Association of Home Builders:

“Housing contributes to the nation’s and states’ output in two basic ways: through residential investment and household spending on housing services. Residential investment includes construction of new single family and multifamily structures (which encompasses the value of input materials), residential remodeling, and production of manufactured homes and brokers’ fees. Spending on housing services includes the amount of rent paid by tenants, the imputed value of housing services to home owners, and consumers’ spending on housing services provided by hotels.”

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August 30, 2008

Ari Herzog

Interesting, Chris. Delving into Google, I see you only have half the story. Tenants also are computed.

Here's an extract from the National Association of Home Builders:

“Housing contributes to the nation’s and states’ output in two basic ways: through residential investment and household spending on housing services. Residential investment includes construction of new single family and multifamily structures (which encompasses the value of input materials), residential remodeling, and production of manufactured homes and brokers’ fees. Spending on housing services includes the amount of rent paid by tenants, the imputed value of housing services to home owners, and consumers’ spending on housing services provided by hotels.”

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August 31, 2008

John Wall

Don't forget, many government figures get “adjustments” or “corrections” on a quarterly basis. This is great when, during a recession pols can say that the figures show there is not recession, and then a year later look at the corrected numbers and say “we did a good job making it through that recession…”.

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August 31, 2008

John Wall

Don’t forget, many government figures get “adjustments” or “corrections” on a quarterly basis. This is great when, during a recession pols can say that the figures show there is not recession, and then a year later look at the corrected numbers and say “we did a good job making it through that recession…”.

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September 22, 2008

John Bill

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November 6, 2008

REAL ESTATE

performing like they used to. Advanced linking algorithms t
ake into account the old ways of “cheating” the system and content and activity

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November 17, 2008

larnaca apartments

economic figures to make things look better than they are. This is akin to saying that if you own an iPod, you’re essentially running an iPod rental business, renting your iPod from yourself every month.

Reply
November 24, 2008

Johnny

Same as you, doesnt make any sense. If you own something, say like an iPod, you`re the owner, you`r not renting it.. Piliticians …

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November 24, 2008

Johny

Same as you, doesnt make any sense. If you own something, say like an iPod, you`re the owner, you`r not renting it.. Piliticians …

Reply
November 24, 2008

Johny

Same as you, doesnt make any sense. If you own something, say like an iPod, you`re the owner, you`r not renting it.. Piliticians …

Reply