Using the income approach to calculate the voluntary sector's economic contribution to gross domestic product: a welsh case study

Assessing the economic contribution of the voluntary sector to gross domestic product can be considered methodologically as an under-researched area in the UK, since the majority of research work lacks detailed methodology, including unclear sampling procedures, questionable analytical techniques and unverified data sources. Notably, earlier studies mainly focused on approaches to estimate volunteers’ economic contribution, rather than discussing main economic models to measure overall income variables of the sector. Therefore, this article is expected to fill a gap in the literature by taking into account all possible income components of the sector, including factor payments, as the total income of the voluntary sector. An earlier study (Hasan, 2008) was conducted on the Wrexham voluntary sector to verify the applicability of the income approach. The main difficulties of Hasan’s research were twofold: there were insufficient data sources and there was reluctance on the part of voluntary organizations to supply monetary information. However, the earlier study recommended that the income approach gave the sector more accurate estimates (while not overly under- or over-estimating) when complete information regarding income, expenditure and volunteers’ hourly contribution were properly considered. Accordingly, this paper critically explores the utility of the income approach.