Definition: Value added at constant prices

Category: ESA 1995

Value added at constant prices is defined as the difference between output at constant prices and intermediate consumption at constant prices.

VA = Σ P(0)Q(1) - Σ p(0)q(1)

where P and Q are prices and quantities for output and p and q are prices and quantities for intermediate consumption. The theoretically correct method to calculate value added at constant prices is by double deflation, i.e. deflating separately the two flows of the production account (output and intermediate consumption) and calculating the balance of these two revalued flows. http://ec.europa.eu/eurostat/product?code=CA-15-96-001&mode=view