Importance of national income data analysis

 

7 importance of national income data analysis

 

national  income data analysis

 

The national income data analysis has the following importance as follows:

1.      For the economy

2.      National policies

3.      Economic planning

4.      Economic models

5.      Research

6.      Per capital income

7.      Distribution of income

 

1. for the economy:

 

National income data are of great importance for the economy of a country. These days the national income data are regarded as accounts of the economy, which are known as social accounts. These refer to net national income and net national expenditure, which ultimately equal each other. Social accounts tells us how the aggregates of a nations income, output, and product result from the income of different individuals, products of industries and transaction of international trade. Their main constituents are inter- related and each particular account can be used to verify the correctness of any other account.

 

2. National policies:

 

National income data forms basis of national policies such as employment policy, because this figures enable us to know the direction in which the industrial output, investment and savings, etc. change, and proper measures can be adopted to bring the economy to the right path and direction.

3. Economic planning:

 

In the present age of planning, the national data are of great importance for economic planning, it is essential that the data pertaining to a country’s gross income, output, savings and consumption from different sources should be available. Without these, planning is not possible.

 

4. Economic models:

 

The economists propound short run as well as long run economic models or long run investment models in which the national income data are very widely used.

 

5. Research:

 

The national income data are also made use of by the research scholars of economics. They make use of the various data of the country’s input, output, and income, Savings. Consumption, investment, employment, etc. which are obtained from social accounts

 

6. Per capita income:

 

National income data are significant for a country’s per capita income which reflects the economic welfare of the country, the higher the per capita income, the higher the economic welfare and standard of living of the country.

 

7. Distribution of income

 

National income statistics enable us to know about the distribution of income in the country. From the data pertaining to wages, rent, interest and profits, we learn distribution of income of different sections of the society and economy. Similarly, the regional distribution of income is revealed. It is only on the basis of these that the government can adopt measures to remove the inequalities in income distribution in the country and restore regional equilibrium. With view to removing these personal and regional disequilibria, the decisions to levy more taxes and increase public expenditure also rest on national income statistics.