Value Added (Gross Product)
The portion of the goods and services sold or added to inventory or fixed investment by a firm that reflects the production of the firm itself. It represents the firm’s contribution to a country’s gross domestic product, which is the value of goods and services produced by labor and property located in the country. Compared to sales, value added is a preferable measure of production because it indicates the extent to which a firm’s sales result from their own production rather than from production that originates elsewhere, whereas sales data do not distinguish between these two sources of production. Value added can be measured as gross output minus intermediate inputs; alternatively, it can be measured as the sum of the costs incurred (except for intermediate inputs) and the profits earned in production. The value-added estimates presented here were prepared by summing the costs and profits data.