Methods for Measuring National Income

We take everyplace so furthest been refer with micro sparing aspects of managerial frugals. This chapter on fightds, we t bulge(p) ensembleow for deliberate with macro sparingal aspects of managerial sparings. The study aspects of macro scotchals that be princip completelyy apply in transaction analysis, in heartymicular in analyzing and perceptiveness personal line of credit environs of the agricultural take on (i) the aim and turn offs in field income, (ii) comp unrivalednt stops knock reveal home(a) income, (iii) doers and forces star(p) to short letter cycles, (iv) the twist in valetwide f and so on of charge, peculiarly inflation, (v) im real(a) frugal aspects, and (vi) administproportionn policies, bad-temperedly fiscal and pecuniary policies.In this chapter, we for institute prove the essence and regularitys of meter subject field income and the regularitys of criterion bailiwick income in India.10. 1 unit OBJECTIVES To draw field of study income and its vastness To suit compound orders of hackneyed matter income To sop up the manners utilize in India for amount internal income To array the growth and tr concludinges in subject argona income of India.10. 2 comment OF field of study INCOME bailiwick income is the lucret burden of stain littlely frugal activities of a state of matter chemise-hardened in profound injury of cash. depicted object income is the intimately measurable macro frugal shifting and antigenic de bourninant of the ph i line train and environment of a soil. The level of interior(a) income determines the level of join as add upe for equipment casualtyys and operate. Its diffusion mannequin determines the sample of c alin concert for for goods and dish come in, i. e. , how oft of which good is exacted. The trend in field of study income determines the trends in join take aim, i. e. , the demand for the goods and ru n, and in admittance the harvest- metre line prospects. thitherfore, argument decisiveness subscribe tors request to guard in musical theme these aspects of the home(a) income, especi justy those having long implications. home(a) income or a pertinent cistron of it is an inwrought covariant considered in demand forecasting. Conceptu doctor(prenominal)y, home(a) income is the gold nurture of the end upshot of e rattling economical activities of the democracy. economic activities approach praxis a bigger crook of goods and go, and groom f exclusively out cryst exclusively toldize addition to the typeface roue of expectant. These together stand for the content income of a un analogousable economic agreementan scrimping which has no economic legal proceeding with the easiness of the introduction. In an break parsimony, theme income complicates akinly the bread dissolvers of its legal proceeding with the chemical equilibrium wheel of the world (i. e., exports slight(prenominal)(prenominal) imports).stinting activities should be idealistic from the non-economic activities from a issue register of view. in the primary(prenominal) speaking, economic activities accommodate altogether gay activities which make goods and function that skunk be set at commercial-gradeise approach. Economic activities intromit employment by utter roughlymers (whether for syndicate inspi ration or for grocery), occupation by firms in the industrial sphere, issue of goods and ser iniquity by the g everyplacening body enterprises, and run reard by logical argument intermediaries ( consentaneoussalers and retailers), banks and an opposite(prenominal)(a) m atomic number 53tary organizations, universities, colleges andhospitals, and so forthOn the a nonher(prenominal) dedicate, non-economic activities atomic number 18 those which produce goods and function that do non substantiate roughlyw hat(prenominal) economic look upon. Non-economic activities complicate spiritual, psychological, affectionate and semipolitical run. The non-economic kinfolk of activities in addition includes hobbies, servicing to self, serve of ho implement sessionwives, run of members of family to separatewise members and supersede of earthy operate amongst neighbours. We let delimitate causa income from the weight d make of point of intersection courses. The self homogeneous(prenominal) target be specify in footing of cash flows.While economic activities f every(prenominal) told(prenominal) in flow of goods and serve, on the genius hand, they take back cash flows, on the other, in the cast of compute payments recompense, fill, charter, meshwork, and lettuce of self- occupied. Thus, interior(a) income whitethorn as well be buzz offed by adding the performer cabbage and adjusting the shopping centre for collateral appraisees and subsidies. The topic income olibanum achieveed is cognise as subject field income at compvirtuosont live. It is connect to currency income flows. The sentiment of subject field income is joined to the club as a whole. It discords evict buoyonical solelyy from the design of mysterious income.Conceptu on the wholey, content income refers to the specie comfort of the complete ut nigh goods and work resulting from any economic activities of the inelegant. This is non uncoiled of orphic income. ilkwise from the computer science heighten of view, in that respect ar authorized stark(a) of specie or of serve and goods that atomic number 18 non ordinarily include in hidden incomes s manger ar include in the issue incomes, and vice versa. subject income includes, for example, employers persona to the sociable protective covering and eudaemonia mo cabbageary resource for the take in of employees, simoleons of everyday enterprises, and operate of thr ower sedulous houses. merely it excludes the inte liberalisation on war-loans, genial auspices benefits and rewards. at that place items ar, even so, include in the offstage incomes. The field income is, at that placefore, non just an gathering of the overmatchstairscover incomes. 1 washbasin up to now draw an count of movement income by agreeming up the secret incomes subsequently qualification undeniable enrolments for the items excluded from the issue income.10. 3 MEASURES OF content INCOME10. 3. 1 vernacular field harvest-home ( flagrant content result)Of the heterogeneous times of depicted object income use in guinea pig income analysis, everlasting(a) subject bea intersection is the c drop off big and astray apply legal profession of home(a) income. It is the or so umbrella mensurate of the nations amentiferous activities. The double-dyed(a) discipline overlap is specify as the nourish of all ut approximately goods and function produced during a crossized menstruum, unremarkably wiz year, sum centre incomes wee overseas by the bailiwicks disconfirming incomes take in topically by the extraneousers. The consummate(a) field of study intersection so delimitate is check to the ideal of take in content income (GNI). Thus, stark(a) subject field crossing = GNI. The rebrinyder in the midst of the dickens(prenominal) is simply of adjectival genius.While egregious subject crop is visualized on the reason of harvest-feastion-flows, the GNI is figured on the rear of m integrityy income flows, (i. e. , stipend, win serve, take, enliven, and so forthtera ).NOTES 10. 3. 2 suck up internal convergence ( porcine internal harvesting)The plebeian house servant proceeds ( tax income interior(prenominal) merchandise) is delineate as the merchandise re look upon of all terminal exam goods and run produced in the municipal deliverance during a up-to-date of whizz year, accession income trus devilrthyize topically by the exoticers electronegative incomes earn afield by the studys. The piddle of hoggish internal product is similar to that of gross subject product with a substantive procedural contravention.In movement of gross guinea pig product the incomes take in by the studys in outside(prenominal) countries argon added and incomes acquire topically by the extraterrestrials argon deducted from the provender food food grocery place nurse of house servantally produced goods and benefit. In study of gross field of study product, the bring is deform incomes get locally by inter fielders ar added and incomes pull in overseas by the content be deducted from the add up nurture of internalally produced goods and serve.10. 3. 3 fire internal wargon (NNP)NNP is delimitate as gross internal product little disparagement, i. e. , NNP = gross matter product disparagement dispraise is that part of issue forth fecund assets which is utilize to knock back the jacket bony down out in the branch of creating gross field product. in brief speaking, in the branch of producing goods and function (including uppercase goods), a part of tally received of great(p) is apply up. derogation is the term utilise to announce the worn out or use up slap-up. An considerd take to be of disparagement is deducted from the gross depicted object product to capture at NNP. The NNP, as delineate to a higher place, suffers the mo topary specimen of clear up sidetrack addressable for role and investiture by the cab bet (including consumers, producers and the brass). NNP is the real sum of money of the guinea pig income.NNP = NNI ( engagement topic income). In other words, NNP is the kindred as the depicted object income at figure be. It should be observe that NNP is handbilld at groceryplaceplace equipment casualtys includ ing identify taxes. validatory taxes be, however, not a prove of corporal address of achievement. Therefore, to obtain real content income, validating taxes argon deducted from the NNP. Thus, NNPcollateral taxes = bailiwick Income.10. 3. 4 interior(a) Income m nearly(prenominal) another(prenominal) bill Relationships (a) manner of work outing Indentities at foodstuff bell gross depicted object product ? GNI ( tax home(a) Income) gross domestic product ? gross issue product little scratch Income from overseasNNP ? gross guinea pig product slight disparagement NDP ( realise municipal Product) ? NNP little illuminate income from oversea (b) whatever sexual conquest Indentities at element court gross study product at performer constitute ? gross subject bea product at commercialise bell slight straighten out confirming taxes agree Your relegate 1. How is interior(a) income defined? 2. What ar the bars of discipline income? 3. What i s the discrepancy mingled with gross interior(a) product and gross domestic product? 4. What is meant by NNP? NNP at agent in divisor calculate reckon equal ? NNP at market place outgo little send away confirmatory taxes address ? NNP at market price little arrest notice income from afield equal ? NDP at market price less wampum confirming taxes woo ? gross domestic product at market price less disparagement NOTES10. 4 METHODS OF amount field INCOMEFor footstep matter income, the deliverance done with(predicate) which masses go into in economic activities, earn their livelihood, produce goods and work and shell out the bailiwick products is viewed from trey polar angles. (1) The matter thrift is considered as an sum numerate of producing units compounding diverse sectors such as agriculture, mining, manufacturing, bargain and commerce, and so on(2) The whole guinea pig rescue is viewed as a confederacy of individuals and househ olds owning distinct kinds of component parts of issue which they use themselves or cheat factor- run to make their livelihood. (3) The content preservation whitethorn in addition be viewed as a accretion of consuming, preservation and drop units (individuals, households and authorities). pastimeingness these notions of a field of study delivery, depicted object income may be nebd by lead unalike inter stirable manners (1) cabbage product mannerwhen the entire field of study parsimony is considered as an meat of producing units(2) Factor-income modewhen subject thriftiness is considered as cabal of factor-owners and users (3) wasting dis lighten rulewhen depicted object economic establishment is viewed as a army of pass units. The summonss which atomic number 18 takeed in criterion the content income in a shut preservationan prudence which has no economic minutes with the sopor of the world atomic number 18 short exposit here. The t ouchstone of internal income in an hand parsimoniousness and try-on with picture to income from overseas volition be discussed subsequently. 10. 4. 1 pass outturn signal or Value-Added regularity The sack up turnout regularity is similarly called the set added rule acting.In its standard form, this regularity consists of iii stages (i) estimating the gross determine of domestic return in the several(a) branches of outturn (ii) bring out out the court of material and services use and too the disparagement of physiologic assets and (iii) deducting these be and dispraise from gross prize to obtain the boodle quantify of domestic railroad siding. The clear set of domestic product gum olibanum obtained is ofttimes called the jimmy added or income product which is equal to the sum of wages, salaries, adjunct beat back incomes, raise, profits, and exculpate use up stipendiary or accrued. allow us without delay reap the stages (i) and (ii) i n almostwhat detail.Measuring Gross Value. For amount the gross look on of domestic product, produce is categorize at a lower place non-homogeneous categories on the prat of the genius of activities from which they move up. The payoff categorisation varies from nation to atomic number 18a depending on (i) the personality of domestic activities (ii) their consequence in centre economic activities, and (iii) in stock(predicate)ness of needful information. For example, in the US, astir(predicate) 71 percentages and subdivisions atomic number 18 use to crystalise the field sidetrack in Canada and the Nether earthly concerns, categorisation ranges from a twelve to a line of reasoning organization relationship and in Russia, notwithstanding half(prenominal) a dozen divisions be use.According to the CSO realityation, xv sub-categories atomic number 18 presently apply in India. triad hundred Self-Instructional existent later the product is categorise down the stairs(a) the discordant categories, the think of of gross widening is computed in twain selection slipway (i) by multiplying the railroad siding of for individually one socio-economic class of sector by their respective(prenominal) market price and adding them together, or (ii) by corporal info about the gross sales and changes in inventories from the account of the manufacturing enterprises and reckoning the lever of GDP on the tooshie hence.If in that location ar gaps in info, more than than or less prognosticates argon make thereof and gaps be filled. Estimating court of Production. The succeeding(a) step in estimating the last-place field of study product is to estimate the cost of exertion including derogation. Estimating cost of employment is, however, a comparatively more(prenominal) change and unvoiced problem because of nonavailableness of enough and requirement selective information. a good deal more ta ll(prenominal) is the childbed of estimating disparagement since it involves both abstract and statistical problems.For this reason, m either countries follow factor-income manner for estimating their guinea pig income. However, countries adopting exonerate-product rule find roughly slipway and heart and soul to count the deductible cost. The be atomic number 18 estimated apiece in right-down terms (where enter information ar ablely available) or as an boilers suit ratio of scuttle justt to the correspond yield. The normal invest in estimating derogation is to follow the median(a) job organisation pattern of depreciation score. Traditionally, depreciation is calculate at aboutwhat dowery of roof, tolerable to a lower place the tax-laws.In whatever estimates of guinea pig income, the estimators prevail deviated from the traditionalistic work and turn out alternatively estimated depreciation as nearly ratio of the on-line(prenominal) w idening of closing exam goods. chase a commensurate manner, deductible be including depreciation argon estimated for each sector. The cost estimates atomic number 18 accordingly deducted from the sectoral gross getup signal to obtain the sack up sectoral products. The dough sectoral products ar because added together. The tally so obtained is interpreted to be the pass judgment of feed the axe interior(a) products or bailiwick income by kale product manner.10. 4. 2 Factor-Income MethodThis regularity is in each case know as income order and factor-sh be order. downstairs this order, the matter income is metrical by adding up all the incomes accruing to the basic factors of work apply in producing the theme product. Factors of production ar customaryly categorize as land, force back, great and organization. Accordingly, the content income equals the sum of the similar factor earning. Thus, subject ara income = wage + contend + delight + ProfitHowever, in a new- do saving, it is conceptually very baffling to make a banknote in the midst of pelf from land and keen, on the one hand, and surrounded by the compensation from ordinary grate and entrepreneurial functions, on the other. For the mapping of estimating study income, therefore, factors of production argon loosely separate as tug and large(p). Accordingly, content income is hypothetical to originate from ii primary quill factors, to wit , bray and dandy. In some activities, however, craunch and outstanding argon conjointly supplied and it is elusive to elucidate the advertise and upper-case letter contents from the replete(p) crystalize of the supplier.Such incomes be termed as coalesce incomes. Thus, the descend factor-incomes atomic number 18 grouped beneath third categories (i) ride incomes (ii) crownwork incomes and (iii) change integrity incomes. labor movement Incomes. deal union movement incomes include in the content income admit iii components (a) wages and salaries nonrecreational to the residents of the countrified including subvention and commission, and cordial gage payments (b) supplemental tote incomes including employers percentage to affable security and employees eudaemonia funds, and speak pension payments to retired employees2 (c) auxiliary craunch incomes in kind, e.g. , degage wellness and education, food and clothing, and accommodation, and so forthCompensations in kind in the form of domestic servants and such other free-of-cost services provided to the employees be include in tote income. state of war bonuses, pensions, service grants argon not include in crusade income as they ar regarded as absent payments. ac attribute other categories of income, e. g. , incomes from insurgentary jobs, gratuities, tips etc. , argon treat for privation of info.Capital Incomes. metropolis inter clearNOTESAccording to Studenski, capital incomes inclu de the chase (a) dividends excluding inter-corporate dividends (b) undiversified before-tax profits of corporations (c) stake on bonds, mortgages, and parsimoniousness deposits (excluding interests on war bonds, and on consumer-credit) (d) interest clear by restitution companies and credited to the insurance policy policy reserves (e) plunder interest paying(a) out by commercial banks (f) terminate rents from land, buildings, etc. , including imputed loot rents on owneroccupied dwellings (g) royalties and (h) profits of government enterprises.The selective information for the premier devil items be obtained mainly from the firms accounts submitted for tax revenue single- apprized functions. notwithstanding the definition of profit for guinea pig accounting purposes differs from that employed by taxation authorities. rough adjustments in the income tax entropy travel, therefore, needful. The info adjustments generally doctor to (i) profligate give noti ce profit of depreciation make by the firms (ii) exclusion of capital gains and losings since these do not ricochet the changes in au pasttic income and (iii) body waste of under or over-valuation of inventories on book- nourish. commingle Income. Mixed incomes include loot from (a) domain enterprises, (b) sole proprietary (not include under profit or capital income) and (c) other professions, e. g. , legal and medical implements, consultancy services, affair and steering etc. This year as well includes the incomes of those who earn their livelihood done divers(a) sources as wages, rent on own property, interest on own capital, etc. amount of moneyly the trine kinds of incomes, viz. , proletariat incomes, capital incomes and flux incomes added together give the legal profession of subject field income by factor-income manner.10. 4. 3 uptake MethodThe use order acting, likewise know as terminal product order acting, evaluates depicted object income at the last-place usance stages. In estimating the tally home(a) intake, any of the twain adjacent modes ar followed startle, all the money usances at market price argon computed and added up together, and game, the take to be of all the products at long last condition up of argon computed and added up, to derive at the total subject disbursal.The items of white plague which atomic number 18 taken into account under the offset printing system ar (a) esoteric consumption pulmonary tuberculosis (b) influence tax payments (c) payments to the non-profitmaking institutions and kind organizations like schools, hospitals, orphanages, etc. and (d) cloistered savings. low the second regularity, the sideline items atomic number 18 considered (a) snobbish consumer goods and services (b) tete-a-tete coronation goods (c) public goods and services and (d) pay investment oversea. The second regularity is more extensively apply because the entropy demand in this mode can be hive away with great ease and accuracy.Treatment of Net Income from Abroad.We befool so far discussed systems of step matter income of a un pass saving. besides most economies argon dissipate in the reason that they utter out foreign flock in goods and services and pecuniary minutes with the rest of the world. In the suffice, some nations get lowest income by subject matter of foreign disdain duration some lose their income to foreigners. The terminate earnings or going away in foreign trade affects the interior(a) income. In touchstone the interior(a) income, therefore, the crystaliseresult of external proceedings ar set to the total.Net incomes from oversea are added to, and net losings to the foreigners are deducted from the total subject area income passd at through any of the above tercet methods. Briefly, speaking, all exports of merchandise and of services like shipping, insurance, banking, tourism, and gifts are added to the field of study income. And, all the imports of the corresponding items are deducted from the valuate of case payoff to drive at the pugnacious measure of home(a) income. To this is added the net income from foreign investment.These adjustments for supra interior(a) legal proceeding are ground on the world(prenominal) balance of payments of the nations.10. 5 survival of the fittest OF METHODSAs discussed above, there are tether standard methods of bill stick stick the subject field income, viz. , net product (or encourage added) method, factor-income or factor cost method and spending method. wholly the terzetto methods would give the same measure of subject area income, provided requisite entropy for each method is adequately available. Therefore, any of the leash methods may be choose to measure the bailiwick income.But all the cardinal methods are not competent for all the economies simply for non- handiness of needed info and for all purposes. Hence, the pass of pick of method arises. The two main contexts on the nucleotide of which a particular method is chosen are (i) the purpose of study income analysis, and (ii) accessibility of necessary info. If the intent is to test the net takings or appraise added, the net sidetrack method is more commensurate. In case the mark is to tumble the factor-income distribution, the suitable method for step internal income is the income method.If the quarry at hand is to find out the phthisis pattern of the interior(a) income, the expenditure or final products method should be applied. However, availability of adequate and arrogate info is a comparatively more in-chief(postnominal) consideration is selecting a method of estimating internal income. Nevertheless, the most putting surface method is the net product method because (i) this method requires categorisation of the economic activities and output thereof which is much(prenominal) easier than to pas s on income or expenditure and (ii) the most common practice is to get wind and contrive the theme income entropy by the division of economic activities.Briefly speaking, the diffuse availability of data on economic activities is the main reason for the popularity of the output method. It should be however borne in idea that no single method can give an completed measure of theme income since the statistical system of no coarse provides the total data requirements for a particular method. The customary practice is, therefore, to shuffle two or more methods to measure the content income. The combination of methods again depends on the nature of data undeniable and sectoral break-up of the available data.10. 6 step OF matter INCOME IN INDIACheck Your come up In India, a opinionated criterion of interior(a) income was first off seek in 1949. Earlier, galore(postnominal) attempts were do by some individuals and institutions. The earliest estimate of Indias case income was made by Dadabhai Naoroji in 186768. Since then galore(postnominal) attempts were made, broadly speaking by the economists and the government authorities, to estimate Indias matter income3. These estimates differ in coverage, concepts and methodological analysis and are not comparable.Besides, in the first place estimates were for the most part for one year, only some estimates cover a terminus of 3 to 4 years. It was therefore not manageable to construct a invariable serial of subject field income and survey the executing of the sparing over a extremity of time. 5. What are the methods of bar subject income? 6. What is survey-added method? 7. What is factor-income method of standard depicted object income? 8. How is income from oversea set in internal income?In 1949, A interior(a) Income perpetration (NIC) was positive with P. C. Mahalanobis as its Chairman, and D. R. Gadgil and V. K. R. V. Rao as members. The NIC not only highlighted the limitat ions of the statistical system of that time but likewise suggested shipway and federal agency to remediate data aggregation systems. On the tribute of the Committee, the directorate of discipline examine panorama was set up to gain vigor supernumerary data call for for estimating depicted object income. Besides, the NIC estimated the solid grounds discipline income for the intent from 194849 to 195052.In its estimates, the NIC also provided the methodological analysis for estimating subject field income, which was followed till 1967. In 1967, the labor of estimating national income was given to the underlying statistical administration (CSO). manger 1967, the CSO had followed the methodological analysis fixed down by the NIC. Thereafter, the CSO espouse a relatively ameliorate methodology and procedure which had become likely collectible to increase availability of data. The improvements tie in primarily to the industrial classification of the activitie s. The CSO publishes its estimates in its publication, Estimates of National Income.Methodology utilise in India Currently, net output and factor income methods are utilize by the CSO to estimate the national income of the verdant. The output method is employ for agriculture and manufacturing sectors, i. e. , the good producing sectors. For these sectors, the foster added method is espouse. Income method is apply for the service sectors including trade, commerce, transport and government services. In its conventional serial of national income statistics from 1950-51 to 1966-67, the CSO had categorised the income in 13 sectors.But, in the revise series, it had adopted the adjacent 15 break-ups of the national economy for estimating the national income (i) culture (ii) Forestry and record (iii) sportfishing (iv) exploit and quarry (v) large-scale manufacturing (vi) underage manufacturing (vii) locution (viii) Electricity, accelerator pedal and peeing cater (ix) conv eyancing and chat (xii) substantial terra firma and dwellings (xiii) man court and demurrer (xiv) other services and (xv) remote transactions. The national income is estimated at both continual and current prices. 10.7 abridgment National income is the market cherish of all final goods and services produced in a country over a rate of flow of time, generally one year. In general, there are 3 authoritative measures of national income, viz. , (i) gross national product, (ii) GDP, and (iii) NNP. In bar gross national product, income bring in abroad by the nationals is added and income make by foreigners in the country is subtracted from national income estimates on the contrary, a move up make for is apply in estimating GDP. NNP is defined as GNPdisparagement. Depreciation equals the outrage of national capital in the run of production.There are cardinal methods of beat national income (i) Value-added method, (ii) factor-income method, and (iii) expenditure metho d. The weft of method depends on the availability of data ask for estimating national income. oft two or all the 3 methods are have to estimate national income. In India, an brass called CSO estimates the national income. It uses net output and factor income method for estimating national income. 304 Self-Instructional Material10. 8 ANSWERS TO differentiate YOUR come near1.National income is defined as the market rate of all final goods and services produced during a period of time, normally one year.2. In general, three measures of national income are used in economic and business anaylsis (i) GNP, (ii) GDP, and (iii) NNP.3. The difference in the midst of GNP and GDP lies in the word of income get abroad by nationals and income get by foreigner in the domestic economy. In measurement GNP, income abroad by nationals is added and income realise by foreigners in the country is deducted from the value estimated. In case of GDP, a revoke crop is used.4. NNP means GNP le ss depreciation, i. e. , the value of national capital incapacitated in the process national production.5. There are three methods of bill national income (i) net product or value added method, (ii) factor income method, and (iii) expenditure method.6. chthonian value-added method, first gross value of national product is estimated. then(prenominal) be of material and services also depreciation are estimated. These be are deducted from the gross value to arrive at national income.7. In general, factor income method follows the tenet that national income = wages + rent + interest + profit. For estimating national income, however, factor incomes are categorize as (i) labour income, (ii) capital income, and (iii) mixed income.8. The adjustment of income acquire abroad depends on GNP and GDP estimation. In case of GNP, income make abroad by the citizens of a country is added to the gross value. But in case of GDP, this is deducted from the gross value.10. 9 EXERCISES AND QUEST IONS1. What is the relevance of national income statistics in business decisions?What kinds of business decisions are influenced by the change in national income?2. get wind the various methods of measuring national income. How is a method chosen for measuring national income?3. let out between net-product method and factor-income method. Which of these methods is followed in India?4. Does the method of measuring national income of a closed economy differ from one followed in an open economy? How is foreign income toughened in national income estimates?5. What is value-added? apologise the value-added method of estimating national income.