Value Added
From Open Risk Manual
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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