Gross Metropolitan Product Formula: Explained with Examples

by Yum Yum Mama Team July 8, 2025

What Is the Gross Metropolitan Product (GMP) Formula?

Gross Metropolitan Product (GMP) is calculated using the same core formula as GDP, but restricted to a metropolitan area rather than an entire country.

In this guide, we’ll break down the Gross Metropolitan Product formula and show you how to calculate it — building on our intro to GMP post.

🔢 The Basic GMP Formula

$\text{GMP} = C + I + G + (X - M)$

Where:

C = Consumption
I = Investment
G = Government Spending
X = Exports
M = Imports

This is the same formula used for GDP — known as the expenditure approach — but focused only on activity within a metro region like London, Manchester, or New York City.

🧠 What’s the Difference Between GDP and GMP?

GDP measures all economic activity within a country’s borders.
GMP zooms in on just one city or metro area.

📎 Real-Life Example of the GMP Formula

Let’s say the city of Birmingham has the following yearly economic data:

Consumer spending (C): £70 billion
Investment (I): £30 billion
Government spending (G): £25 billion
Exports (X): £15 billion
Imports (M): £10 billion

$\text{GMP} = 70 + 30 + 25 + (15 - 10) = £130 billion$

So, Birmingham’s Gross Metropolitan Product would be £130 billion for that year.

🤔 How Is GDP Actually Calculated?

There are three approaches used worldwide:

Expenditure Approach (most common):
$GDP = C + I + G + (X - M)$
Income Approach:
$GDP = \text{Wages} + \text{Rent} + \text{Interest} + \text{Profits}$
Production Approach:
GDP = Total Output − Intermediate Consumption

💡 In the UK, the Office for National Statistics (ONS) uses all three approaches and reconciles the data quarterly.

👶 GDP for Dummies: A Simple Explanation

Imagine your city is one big shop. Every time someone buys something, gets paid, or invests in building something, that adds to the city’s economic total.

GMP just adds up the value of:

Things people buy (C)
Business spending (I)
What the government does (G)
What the city exports (X)
Minus what it imports (M)

Don’t mix it up with the common typo GPD — here’s why that’s incorrect.

📘 Related Formulas You Should Know

Term	Formula	Applies To
Nominal GDP	Current prices, no inflation adjustment	National
Real GDP	Nominal GDP ÷ GDP deflator × 100	National
GNP	GDP + Net income from abroad	National
GDP at Market Price	Output value + Taxes - Subsidies	National
GMP	GDP formula, localised to city/region	Metro/Urban

Not sure how GDP and GNP differ? Read this for definitions, formulas, and examples:
👉 What Is the Difference Between GDP and GNP?

🔗 Related Articles:

✅ Final Word

The Gross Metropolitan Product formula is your key to understanding how economists measure city-level success. Whether you're studying for A-Level Economics or trying to grasp the basics, this formula helps you calculate a region’s productivity with precision.