- It gives economic performance as a whole but does not indicate which sectors contribute more
- Its growth shows an increase in welfare yet some people face a falling / constant/increasing welfare.
- GNP has only a few major contributors and these are the only beneficiaries.
- The percentage capital calculated from GNP shows that the welfare of all citizens is the same which is a fallacy.
- It faces double counting in the value added approach and therefore the data is wrong misleading.
- Lack of sufficient competent accumulators leads to exclusion of necessary data hence misleading information
- Unwillingness of the self-employed people to give their correct returns in attempt to evade tax leads to the wrong information.
- Corrupt auditors are bribed to give wrong balances hence tax evasion. The level of GNP is also affected in the process.
- Some activities are left out due to inaccessibility hostility, animals etc.
- Estimation of the subsistence sector which does not go through the moment system is a problem.
- Some goods and services do not go through the official market system
- Self provision of services e.g. house wives are excluded.
- GNP excludes leisure one decides to take by working less.
- Illegal activities, though very lucrative, are excluded.
- It does not include rents (opportunity cost) for owner occupied houses as well as value of owner raw materials.
- It leaves out salaries & wages paid in kind.
What are the failures of GNP as a Measure of Output and Welfare?
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