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Difficulties in the Measurement of National Income

There are a number of difficulties in the measurement of national income of a country. The following are the important difficulties of national income analysis: 
  • 1. National income is always measured in terms of money, but, there are certain goods and services whose money measurement is not possible. For example: the services performed by housewife for her family, voluntary services performed with a charitable object, etc. such items are excluded from the national income figures. This leads to an underestimate of the national income. 
  • 2. Income obtained from illegal activities is not included in the national income and their exclusion results in an under-valuation of the national income. 

Note: This is published for the internal use (of St. Philomena's College students) only and hence requires verification. 
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