Economics

Value added is a measure of the economic value created by a business or industry. It is a way to measure the contribution of certain industries to the overall national economy. Value added is directly related to a company’s performance, as it measures the value of a company’s production minus the cost of intermediate inputs. Value added is an important concept that is used to measure Gross Domestic Product (GDP). When calculating GDP, value added measures the value of what is produced in a region or country. It helps to calculate total economic output from only the final goods and services produced there. Value added measures the amount of new, or added value, citizens in a country are producing through the production of goods and services. The total value added can then be used to compare the strength of different countries or regions for economic and trade policies.