There is also production that takes place outside of the market place. Economists have been aware of this since GDP was first created.
See What's the Value of US Household Production? by Timothy Taylor, Managing editor of the Journal of Economic Perspectives. He presents some comments made by economist Simon Kuznets in 1934. Kuznets was the author of the 1934 report to Congress "National Income, 1929-1932." He also won a Nobel Prize in Economics in 1971.
Here is one part of that report, from Mr Taylor's post:
"Kuznets wrote in 1934:Taylor also mentions "The value of household services was equal to about 37% of GDP in 1965, but is currently equal to about 23% of GDP."
"The volume of services rendered by housewives and other members of the household toward the satisfaction of wants must be imposing indeed, when totaled for the 30 million families comprising the population of this country; and the item is thus large enough to affect materially any estimate of national income. But the organization of these services render them an integral part of family life at large, rather than of the specifically business life of the nation. Such services are, therefore, quite removed from those which gainfully occupied groups undertake to perform in return for wages, salaries, or profits. It was considered best to omit this large group of services from national income, especially since no reliable basis is available for estimating their value. This omission, unavoidable though it is, lowers the value of national income measurements as indexes of the nation's productivity in conditions of recent years when the contraction of the market economy was accompanied by an expansion of activity within the family. ... Thus, the estimates submitted in the present study define income in such a way as to cover primarily only efforts whose results appear on the market place of our economy. A student of social affairs who is interested in the total productivity of the nation, including those efforts which, like housewives' services, do not appear on the market, can therefore use our measures only with some qualifications.""
Click here to learn more about Kuznets' contributions to economics