Difference between revisions of "Value Added"
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== Definition == | == Definition == | ||
| − | The gross [[Value]] added at basic price is defined as the difference between output at basic prices and intermediate consumption at purchaser’s prices. In the context of [[Input-Output Analysis]], Value Added is an additional row added to the [[Use Table]] or the [[Input-Output Matrix]] account for the other (non-industrial) inputs to production, such as labor, depreciation of capital, indirect business taxes, and imports. | + | The gross [[Value]] added at basic price is defined as the difference between output at basic prices and intermediate consumption at purchaser’s prices. |
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| + | In the context of [[Input-Output Analysis]], Value Added is an additional ''row'' added to the [[Use Table]] or the [[Input-Output Matrix]] account for the other (non-industrial) inputs to production, such as labor, depreciation of capital, indirect business taxes, and imports. | ||
== Formula == | == Formula == | ||
* VA1 + VA2 = GDP (=sum of factor incomes) | * VA1 + VA2 = GDP (=sum of factor incomes) | ||
| − | * w value added vector | + | * w value added rwo vector |
== See Also == | == See Also == | ||
Revision as of 14:07, 18 September 2023
Contents
Definition
The gross Value added at basic price is defined as the difference between output at basic prices and intermediate consumption at purchaser’s prices.
In the context of Input-Output Analysis, Value Added is an additional row added to the Use Table or the Input-Output Matrix account for the other (non-industrial) inputs to production, such as labor, depreciation of capital, indirect business taxes, and imports.
Formula
- VA1 + VA2 = GDP (=sum of factor incomes)
- w value added rwo vector
