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Pop Up: Gross Regional Domestic Product (GRDP)

Similar to GDP measurement approaches, conceptually there are three approaches for measuring Gross Regional Domestic Product (GRDP), i.e.

  1. Production approach,
  2. Expenditure approach,
  3. Income approach.


Production approach expresses GRDP as the total value of final goods and services produced by all production units in a region within a certain period (usually one year period). Production units are grouped as in the International Standard Industrial Classification of All Economic Activities (ISIC), which are: Agriculture; Mining and Quarrying; Manufacturing Industries; Electricity, Gas and Water Supply; Construction; Trade, Hotel and Restaurant; Transport and Communication; Financial, Ownership and Business Services; Services including government services.

Expenditure approach expresses GRDP as the total of final demand components, covering the consumption expenditure of households and private non profit institutions, government consumption, gross domestic fixed capital formation, increase in stock and net export within a certain period. Net export is the export minus import.

Income approach expresses GRDP as the total income by production factors engaged in the production process in a region. The income components of the production factors may take the form of wages or salaries, land rent, capital interest and profit margin. The profits include income tax and other direct taxes. In this definition, the GRDP also contains depreciation and net direct taxes.

Gross Regional Product (GRP): GRP is the sum of Gross Domestic Regional Product and the net factor income from abroad and from other regions. The net income from abroad and from other regions constitutes of all income of production factors (labor and capital) owned by residents and accrued from abroad and from other regions, minus similar payments made to non-residents in abroad and in other regions.

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