The disposable income is ... The amount of disposable income. Disposable national income

The disposable income is an indicator that characterizes the relationship between GDP and other macro indicators. In addition to the national income, this list also includes: a net domestic product and personal income. As a percentage, personal disposable income is 71.5 percent of GDP (for example, this figure is noted in the US).

Calculation of disposable income

Calculating income can be quite simple. To do this, you need to know such indicators as GDP, depreciation charges, the amount of indirect taxes, profit of business entities, net of a net interest, as well as dividends, household interest and individual taxes and fees.

By the simplest mathematical operations (addition and subtraction) there is a personal income available. This can be represented as a formula:

• ЛРД = GDP - АО - КН + Д - PC - PE + DD + PD - IN - SB, where
  
  AO - depreciation charges;
  CN - indirect taxes;
  D - the income received by an algebraic difference from the income created by residents abroad and non-residents in the state;
  PC - corporate profits;
  PE - net interest;
  DD - dividends received by households;
  TA - interest received by households;
  IN - individual taxes;
  SAT - savings.

Supporting terminology

Considering the indicators associated with the indicator under consideration, it is necessary to clarify the following.

The net domestic product is obtained as a result of subtracting depreciation from GDP and the amount of indirect taxes determined less subsidies. This indicator exceeds the national income available.

Personal income includes the total amount of household income without deduction of taxes paid by them. At the same time, personal income is available - this is the amount received after the payment of all individual taxes. Thus, the last indicator reflects a part of the GDP received by the state in households for savings and current consumption.

Gross disposable income

This indicator in market prices is equal to the total amount of gross national income with the addition of the balance of transfers that are received from various non-residents or transferred to them in the form of donations, donations and humanitarian assistance. Thus, it is the accumulating indicator of all sectors of the economy.

The next indicator - net disposable national income - is the difference between the previous indicator and the consumed fixed capital. In general, the formula takes the form:

• LRND = VRND - PK.

This macro-indicator shows the value of the amount of income that can be used by residents of the state for personal consumption expenditures or is postponed for the purpose of accumulation.

Personal consumer expenditures include all costs associated with the purchase of services and goods by households, as well as the costs of various government organizations and public non-profit institutions that are responsible for servicing households.

Secondary income distribution

As already mentioned above, all macro-indicators are in close interrelation with each other and are formed in strict sequence.

Thus, the redistribution of all types of income is completed by the formation of disposable income, adjusted by sector of the economy. It differs from the corresponding gross indicator by the amount of transfers of a social nature in kind. In the structure of the latter are the following elements: social benefits expressed in kind (for example, social security funds for medical care); Products of non-commercial nature of state bodies and non-profit organizations that serve households; Products purchased directly from producers for the purpose of providing it to households on a free basis or at formal prices.

Comparison of macro indicators

In general, the amount of disposable income and the adjusted analogous indicator is the same. This is due to the fact that a direct adjustment is made in the context of the sectors of the state economy. In this case, social transfers in kind should not affect financial and non-financial enterprises.

This adjustment is carried out in the context of three main sectors of the economy: households, government organizations and non-profit organizations responsible for household servicing.

As for the sectors of state administration and the above-mentioned non-profit organizations, the amount of disposable income is equal to the difference in the respective value of each individual sector and the amount of transfers of a social nature in kind.

Adjusted income in the household sector can be determined by adding to the amount already received in the previous two transfer sectors.

Interrelation of indicators

The macro-indicators indicated in this article are the structural elements of the system of national accounts. With their use, you can solve the following tasks:

• To calculate the generalizing statistical indicators that characterize the results of economic activity;
• To study the dynamics of macroeconomic indicators;
• To analyze various macroeconomic proportions.

The modeling of all macroeconomic processes is based on the relationship between national disposable income and other indicators of the state economy. The models thus created can be used to substantiate financial and management decisions at various levels of the economy (micro, meso and macro).

Value of disposable income

Summarizing the material outlined in this article, it should be noted that the national income is a resource that can be used in personal consumption of households, as well as state institutions.