<p>“I” would be called private domestic investment. (<a href="https://apps.bea.gov/iTable/iTable.cfm?reqid=19&amp;step=2#reqid=19&amp;step=2&amp;isuri=1&amp;1921=survey" rel="nofollow noreferrer">https://apps.bea.gov/iTable/iTable.cfm?reqid=19&amp;step=2#reqid=19&amp;step=2&amp;isuri=1&amp;1921=survey</a>)   </p>

<p>Firm and household expenditures for investment both count as private investment. </p>

<p>(<a href="https://courses.lumenlearning.com/boundless-economics/chapter/measuring-output-using-gdp/" rel="nofollow noreferrer">https://courses.lumenlearning.com/boundless-economics/chapter/measuring-output-using-gdp/</a>)</p>

<p>Any investment expenditure by a government would be categorized under government spending. </p>

<p>If a government builds a school or bridge it would go under government spending “G”. (<a href="https://courses.lumenlearning.com/wm-macroeconomics/chapter/calculating-gdp/" rel="nofollow noreferrer">https://courses.lumenlearning.com/wm-macroeconomics/chapter/calculating-gdp/</a>)</p>

CC BY-SA 4.0
2020-05-04T20:25:54.777Z
Thanks. But is your response conditional on whether 'I' being private domestic investment or gross domestic capital formation? See the comment by @Henry above.
StatsScared
CC BY-SA 4.0
2020-05-05T00:37:36.387Z
This is in response that "I" is private domestic investment.   If "I" where gross domestic capital formation then that would include government investment.  Please see this post: https://economics.stackexchange.com/questions/14625/whats-the-difference-between-gross-fixed-capital-formation-and-gross-private-do
Mike J
CC BY-SA 4.0
2020-05-04T19:41:28.023Z
2020-05-04T19:41:28.023Z
Mike J
<p>In the identity GDP=C+I+G+(X-M) does "I" include expenditures by the government and households?</p>

<p>For example, if a construction firm builds new residential properties and a household buys this property. Is the value of the new residential property allocated as 'firm' expenditure or 'household' expenditure and where in the identity above would these expenditures fall?</p>

<p>Also if a government builds a school or bridge would this go under "I" or "G"?</p>

CC BY-SA 4.0
2020-05-04T19:41:31.470Z
It is just a convention, but $I$ usually covers all gross domestic capital formation by consumers, companies and government; the alternative is to exclude it and have $I$ as gross private domestic capital formation
Henry
CC BY-SA 4.0
2020-05-04T20:23:54.547Z
What does 'it' mean in "alternative is to exclude it"?
StatsScared
CC BY-SA 4.0
2020-05-05T00:31:47.387Z
The alternative is to exclude Government gross capital formation from $I$ and instead include it in $G$.
Henry
<macroeconomics><gdp><consumption>
Does the investment component of GDP (demand side) identity include expenditures by the government and households?
StatsScared
# Does the investment component of GDP (demand side) identity include expenditures by the government and households?

(Asked by: username_0 on 2020-05-04)

In the identity GDP=C+I+G+(X-M) does "I" include expenditures by the government and households?

For example, if a construction firm builds new residential properties and a household buys this property. Is the value of the new residential property allocated as 'firm' expenditure or 'household' expenditure and where in the identity above would these expenditures fall?

Also if a government builds a school or bridge would this go under "I" or "G"?

**Tags:** macroeconomics, gdp, consumption
> **Comments:**
> **username_1**: It is just a convention, but $I$ usually covers all gross domestic capital formation by consumers, companies and government; the alternative is to exclude it and have $I$ as gross private domestic capital formation  
> **username_0**: What does 'it' mean in "alternative is to exclude it"?  
> **username_1**: The alternative is to exclude Government gross capital formation from $I$ and instead include it in $G$.  

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## 1 answers

### Answer by username_2 on 2020-05-04. Score: 1

“I” would be called private domestic investment. (<https://apps.bea.gov/iTable/iTable.cfm?reqid=19&step=2#reqid=19&step=2&isuri=1&1921=survey>)

Firm and household expenditures for investment both count as private investment.

(<https://courses.lumenlearning.com/boundless-economics/chapter/measuring-output-using-gdp/>)

Any investment expenditure by a government would be categorized under government spending.

If a government builds a school or bridge it would go under government spending “G”. (<https://courses.lumenlearning.com/wm-macroeconomics/chapter/calculating-gdp/>)

> **Comments:**
> **username_0**: Thanks. But is your response conditional on whether 'I' being private domestic investment or gross domestic capital formation? See the comment by @Henry above.  
> **username_2**: This is in response that "I" is private domestic investment.   If "I" where gross domestic capital formation then that would include government investment.  Please see this post: https://economics.stackexchange.com/questions/14625/whats-the-difference-between-gross-fixed-capital-formation-and-gross-private-do  

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