Gross Value Added (GVA)
Gross Value Added (GVA) is a measure of the value of goods and services produced in an area, industry or sector of an economy. It is the difference between the value of output and the value of intermediate consumption. GVA is a measure of the contribution to an economy made by an individual producer, industry or sector. It is used to measure the economic performance of a region, industry or sector and to compare the relative size of different sectors within an economy.
History of Gross Value Added (GVA)
Gross Value Added (GVA) was first introduced in the United Kingdom in the early 1990s as a measure of economic performance. It was developed as an alternative to Gross Domestic Product (GDP) which was seen as too broad a measure of economic activity. GVA has since been adopted by many countries as a measure of economic performance and is used to compare the relative size of different sectors within an economy.
Comparison of GVA and GDP
| Measure | GVA | GDP |
|---|---|---|
| Definition | The value of goods and services produced in an area, industry or sector of an economy. | The total value of all goods and services produced in an economy. |
| Calculation | Output – Intermediate Consumption | Output + Imports – Exports |
| Uses | Measuring economic performance of a region, industry or sector. | Measuring total economic activity of an economy. |
Summary
Gross Value Added (GVA) is a measure of the value of goods and services produced in an area, industry or sector of an economy. It is used to measure the economic performance of a region, industry or sector and to compare the relative size of different sectors within an economy. GVA is calculated by subtracting the value of intermediate consumption from the value of output. For more information about GVA, visit the websites of the World Bank, the International Monetary Fund, and the Organisation for Economic Co-operation and Development.
See Also
- Gross Domestic Product (GDP)
- Net Value Added (NVA)
- Gross National Product (GNP)
- Gross Output (GO)
- Gross Fixed Capital Formation (GFCF)
- Gross Domestic Expenditure (GDE)
- Gross National Expenditure (GNE)
- Gross Domestic Income (GDI)
- Gross National Income (GNI)
- Gross Domestic Savings (GDS)
