Question

Giving reason, state whether the following is included in national income:

Services rendered by family members to each other.

Explain how the following are treated in estimating National Income:

Services rendered by family members to each other. 

Answer 1

• No, services rendered by family members to each other are not included in the national income.
• This is because these services are considered non-market activities, as they are not paid for, and no monetary transaction takes place.
• National income includes only the value of goods and services that have a market value and are part of the formal economy.
• Since services like cooking, cleaning, or child care performed within a family are not exchanged for money, they are not treated as productive activities in national income estimation, even though they contribute to welfare. Therefore, they are excluded from national income.