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Regression Analysis On National Income
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DEFINITION OF CONCEPTS
Gross
Domestic Product (GDP): This is the sum of the money value of all
locally produced goods and services. It does not include international
transaction. GDP does not make allowance for depreciation of capital.
Gross
National Product (GNP): This is the total money value of current
market prices of all final goods and services produced by the nationals
during a specific period. It includes net income from abroad in respect
of the country’s nationals without any consideration for depreciation
of capital.
National Domestic Product (NDP): This is the total value
of all goods and services produced in a country in a period of time. It
exclude the value of the net earnings and incomes from abroad. An
allowance being made for depreciation of capital.
Net National
Product (NNP): This is the monetary value of all goods and services
produced within the country during a specific period. It includes net
incomes and earning from abroad and provision being made for the
replacement of depreciation of capital.
Disposable Income (DPI):
This is the amount of money per year that private sector are free to
spend when depreciation of capital, all taxes, all net profits made by
firms but not paid out as divided are added to the disposable and
transfer payment subtracted. We arrive at gross national product.
Net
Economic Welfare (NEW): This examines those factors not
considered when calculating the Gross National Product (GNP). Such
factors include social cost 9pollution) and leisure time the net
economic welfare tend to remove the product (GNP). A nation might have a
very high GNP at a very great social cost as pollution, rising crime
etc.
Per Capita Income (PCI) This is the gross domestic
product divided by the population of the country. Per capita income can
be calculated once the population and gross domestic product are
known. So that P.C.I = GDP
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