Question

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

Rent free house to an employee by an employer.

Answer 1

1. Yes, the rent-free house provided by an employer to an employee is included in the estimation of national income.
2. This is because the value of rent-free accommodation is considered a payment in kind for the services rendered by the employee.
3. It is a part of the employee’s compensation or factor income, and since national income includes all factor incomes earned during the year, this benefit must also be counted. Therefore, the imputed value of the rent-free accommodation is included in the estimation of national income.