Last edited 27 Feb 2017

Gross value added (GVA)

Gross value added (GVA) is an economic metric that quantifies the value added to goods and services produced. This is representative of the contribution to the economy of producers, or the wider industry or sector.

It can be determined by the production approach, the income approach or the expenditure approach:

  • The production approach estimates the value of output goods or services minus the value of inputs to the production process.
  • The income approach determines the incomes earned by individuals and corporations producing the goods or services.
  • The expenditure approach determines total expenditure on goods and services produced in the domestic economy.

GVA is often used in calculating the gross domestic product (GDP, a measure of the state of the economy as a whole).

The relationship between GVA and GDP is:

GVA + taxes on products and services - subsidies on products and services = GDP

This can be restated in order to measure the gross regional domestic product and other measures of the output of entities smaller than the economy as a whole. This can be necessary since the total aggregates of taxes and subsidies on products are only available at the whole economy level:

GDP + subsidies - taxes = GVA

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