Household Innovation and R&D: Bigger than You Think
Author(s)
Sichel, Daniel; Hippel, Eric
DownloadPublished version (325.5Kb)
Publisher with Creative Commons License
Publisher with Creative Commons License
Creative Commons Attribution
Terms of use
Metadata
Show full item recordAbstract
© 2020 The Authors. Review of Income and Wealth published by John Wiley & Sons Ltd on behalf of International Association for Research in Income and Wealth Despite recent interest in measuring household activities, investment in household R&D (or household innovation), has not been considered in any of the literatures on national-accounts-style measurement. Household R&D is the dedication of household resources to creating a product or process that will generate a service flow in the future; that is a household intangible asset. This paper takes a step toward valuing household innovation in the U.S. by developing time series of nominal and real investment and capital stocks for household R&D. We find that household investment in R&D was more than 11 percent of R&D funded by the private business sector in 2017 and about half of what businesses spent on R&D to develop new products for consumers. If household R&D were judged to be in scope for GDP, GDP would have been 0.2 percent higher in 2017. We conclude that household R&D is important and warrants closer attention.
Date issued
2020Department
Sloan School of ManagementJournal
Review of Income and Wealth
Publisher
Wiley
Citation
Sichel, Daniel and Hippel, Eric. 2020. "Household Innovation and R&D: Bigger than You Think." Review of Income and Wealth, 67 (3).
Version: Final published version