Q.Why is 'self consumption' difficult in measuring National Income ?

Own-consumption goods are not traded, so they carry no market price and are hard to value, causing national income to be understated.

National income is measured mainly on the basis of goods and services that are bought and sold in the market at a price. Self-consumption (or own-consumption) refers to output that a producer produces and consumes personally instead of selling — for example, a farmer who grows foodgrains and consumes a part of them within the household.

Such output creates two difficulties:

• No market transaction: since these goods are not sold, they do not carry a market price, so their money value cannot be directly recorded. …