The income approach In this method, we add together the following incomes which are earned during and after the process of production · Households’ income in terms of wages, rent, salaries, interest and dividends · Business/firms income in the form of retained profits · Government income in the form of surpluses from state owned enterprises · Net property income from abroad · Imputed income from subsistence output. Note: A) When using this approach, only incomes which are earned in exchange of goods and services should be included. There should be a quid pro quo i.e. Money should be received in exchange of a good or service. B) All transfer payments such as gifts, students’ bursaries, old age pensions, unemployment benefits should be excluded because they are received without exchange. If they are included, there will be double counting.
