National Gross Domestic Product (GDP) by Income and by Expenditure Accounts

Household income of economy, category

Household income refers to the total income of households. From a theoretical point of view, income is often defined as the maximum amount that a household, or other unit, can consume without reducing its real net worth. However, the real net worth of a unit may be changed as a result of the receipt or payment of capital transfers and as a result of real holding gains or losses that accrue on its assets or liabilities. It may also be changed by events such as natural disasters that change the volume of assets. Capital transfers, real holding gains or losses and other changes in the volume of assets due to the effect of events such as natural disasters are specifically excluded from disposable income as measured here. (Capital transfers are recorded in the capital account of the System of National Accounts, while other changes in the volume of assets and real holding gains or losses are recorded in the other changes in assets accounts). Disposable income can be interpreted in a narrow sense as the maximum amount that a household or other unit can afford to spend on consumption goods or services during the accounting period without having to finance its expenditures by reducing its cash, by disposing of other financial assets or non-financial assets or by increasing its liabilities. This concept is equivalent to the economic theoretical concept only when the net worth at the beginning of the period is not changed by capital transfers, other changes in the volume of assets or real holding gains or losses recorded during the period.

Economy refers to the entire set of resident institutional units. It is divided into sectors that consists of groups of resident institutional units. An institutional unit is resident in a country when it has a centre of economic interest in the economic territory of that country. It is said to have a centre of economic interest when there exists some location - dwelling, place of production or other premises - within the economic territory on, or from, which it engages, and intends to continue to engage, in economic activities and transactions on a significant scale either indefinitely or over a finite period of time.