How do they figure appreciation of paintings in GDP?

Question

I know they're second-hand goods, and as such, the sale does not increase GDP. This makes sense to me, since GDP measures production during the current period, and the paintings were not produced in the current period.

But what's bothering me is that GDP is also said to measure income during the period, and when the paintings are sold, they count as income for somebody.

So how do those rascally varmints explain this away?

Answer 1

The increase in value of an asset is a capital gain which are not counted in GDP, because GDP only counts production of goods and services. It add to the sellers income but he produced nothing to earn the income.

Answer 2

Yes people use the term "national income" for GDP, but in fact GDP does not by any means measure ALL income. Other incomes not measured for GDP are such things as interest income, dividends, and cap gains from selling a house or stocks.

However, the auction house gets a fee for running the auction -- THAT counts. If UPS delivers the auctioned item to your house, they're paid and THAT counts.

Answer 3

GDP is a measure of all production at market prices.

As there is no new production, the income generated from a sale of this painting at higher market prices, is simply a transfer of wealth - like a tax - from those who value the painting so much they pay higher prices. No new income is being created.

The key - understand that all market production is income.

It does not result in an increase in production or GDP, just as taxes which force spending on vital areas do not.

Answer 4

well it's not counted, because GDP is only a measurement of goods and services, not all income. however, any associated fees like to an auction house or for delivery or whatever would be counted