# Calculating its value three approaches product

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Calculating its Value – Three Approaches Product Approach – Rather than looking at the final sale, utilize a “value-added” approach Q: how much each industry contributes the the value of the final good or service? Start from the raw material and see how much market value is added at each stage Value of sold – value of intermediate inputs used Value added at each stage must sum up to the final value of the final product Input-Output tables

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Calculating its Value – Three Approaches Use of imputation to estimate the value of some components Esp. Government production is imputed by summing up the payments to workers, payments for intermediate goods and services, allowance for depreciation of assets What about household production for own use? Not counted at all! GDP = Business production + household and institutions production + government production
Calculating its Value – Three Approaches Spending Approach – adding up the value of newly produced goods and services bought by the sectors Personal consumption expenditures – spending by households and institutions Gross private domestic investment – spending by businesses on e.g. fixed assets

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• Fall '11
• boun
• Inflation, Gdp, gross domestic product, National accounts, Consumer price index, GDP deflator

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