Factor cost

Factor costs are in the economics costs on the factor market , represented by the demand for production factors must be worn.

General

Factor cost is the abbreviation of production factor cost . They are the part of the gross national product that has to be borne by those economic subjects who demand production factors that are involved in the creation of the national product . In economics there are the production factors labor , land , capital and entrepreneurship . Their price is called wages , rent ( rent or lease ), interest and entrepreneur's wages . These prices represent costs ( factor costs ) for those market participants who inquire about production factors. In business administration , the corresponding costs are personnel costs , rent / lease expenses, as well as acquisition costs for real estate and interest expenses . The prices flow to those economic agents who have contributed to the creation of the gross national product through the use of production factors ( factor income ). The factor income is made up of labor income , rental income , investment income and profits .

National accounts

In the national accounts , a distinction is made between the “net domestic product at factor costs” ( net value added ) and the “net national product at factor costs” ( national income ). The net value added results from the gross value added minus depreciation , it is also referred to as the net domestic product at factor costs . The factor income is the sum of wages / salaries , profits , interest income , rents and leases, and company wages . The net national product at market prices and the net national product at factor costs differ from one another in terms of indirect taxes and subsidies , which are not included in the latter. The difference between factor costs and market prices arises from indirect taxes , which are included in market prices, and subsidies , which are included in factor costs but not in market prices. ${\displaystyle F}$ ${\displaystyle M}$ ${\displaystyle T_{i}}$ ${\displaystyle S}$

${\displaystyle M=F+T_{i}-S}$.

If factor costs rise or subsidies fall, market prices must rise.

In the distribution calculation, the national income corresponds to the sum of all factor incomes.

literature

• Dieter Brümmerhoff , National Accounts , Oldenbourg Wissenschaftsverlag; 8th edition, 2007; ISBN 3-486-58335-2 .

Individual evidence

1. ↑ Michael Olsson / Dirk Piekenbrock, Compact Lexicon Environmental and Economic Policy , 1998, p. 135
2. ↑ Reinhold Sellien (Ed.), Dr. Gabler's Wirtschafts-Lexikon , Volume I, 1977, Col. 1433
3. ↑ Martin Kühnau, The formal structure of economic accounting , 1961, p. 219
4. ↑ Wolfgang Cezanne, Allgemeine Volkswirtschaftslehre , 2005, p. 246