FINANCIAL TIMES: Prostitutes and drug dealers are set to give Britain a £10bn boost as the country revamps the way it measures its economy.
Britain said on Thursday it would include prostitution and illegal drugs in its official national accounts for the first time.
The move is one of the changes planned for September that will add up to 5 per cent to the UK’s gross domestic product.
September’s revisions will change the official size and shape of the economy and rewrite recent economic history… (more)
EDITOR: The illicit drug trade may be the largest industry in the USA. Is it measured as part of Gross National Product?
The key word is measurement and the revenues derived from illegal drugs and prostitution are not measured; they are guessed (estimated). Since GDP is used to measure the overall economy, countries could easily improve the appearance of their economy (and perhaps garner political favor) by changing GDP measurements.
Their is no actual benefit to the population as other statistics (employment, household income etc.) would indicate; i.e., according to the FT, US GDP increased by 3.6% last year while the total number of working people remained at modern day lows and household income continued to decline. According to the FT, the 3.6% was largely driven by a change in the way investment is measured.
Perhaps in addition to drugs and prostitution the GDP could be increased by estimates of the “underground economy”. Given the right estimate US GDP could be doubled overnight.