This article is accurate for the latest versions of EU3, Napoleon’s Ambition, In Nomine, Heir to the Throne and Divine Wind.
Production is an integral part of the EU3 economic system, with each populated province, excluding fledgeling colonies, producing some resource. This has the two-fold function of providing a portion of each province's income as well as contributing to the worth of its attached Center of Trade. Production income is quite stable and does not suffer the crippling effects of revolt risk, intolerance and low stability as tax income does. Production provides proportionally larger amounts of income as production technology improve, certain buildings are constructed and certain decisions are enacted and is especially important in the colonisation stage of play.
Any province of a nation that produces a good and is not overseas (overseas applies for IN only), generates a monthly income through its production. The value presented as Production in the provincial economic detail box is an estimation of the amount for the whole year, but since the prices fluctuate every month, it might not be accurate. The monthly value (actual ducats gained) is equal to:
Monthly Production Income = ( ( Population Units * ( 100% + Modifiers) )/12 ) * Unit Price * Production Efficiency
where modifiers that might affect it are:
Note that the provincial economic details also displays the value for Population Units, where it appears as Units.
Besides the direct monthly income, the produced amount has a separate value that is directed to the regional Center of Trade and is from there distributed to any nations participating in trade. This amount is shown in the provincial economic details as Trade Value and it's equal to:
Trade Value = Population Units * ( 100% + Modifiers ) * Unit Price
As we can see, the formula is practically the same as for Production Income, except for no application of Production Efficiency. The modifiers affecting the value are the same as above.
Every trade good produced by a province has a fluctuating price. The price of each good is displayed in the production box for each province as Price and has a single global value for each good in the same month. The unit price of goods is defined by 3 parameters: a Base Price, Supply, and Demand. For details of these concepts see the Trade Goods page. All of these values are shown in-game in the Trade Goods page of the Ledger.
The base price of each good is the intrinsic value of the good, representing either utility value or the extraction cost. In general, most goods from colonies are more valuable than goods produced in Europe (for example: Sugar cane is worth more than Wine).
The supply and demand for each good are represented as percentages. Increases in demand are caused by construction of specific buildings and wars. Increases in supply are based on the actual production rates in all provinces in the game. Specific details of what affects supply and demand can be found in the trade goods page. The unit price is calculated by multiplying the percentages together with the base price value as follows:
Unit Price = Base Price * (225% - Supply) * Demand
Example price calculation: Trade good with a base price of 15.0, a Supply of 12% and a demand of 83%
15.0 * (2.25 - 0.12) * 0.83 = 26.5
Production efficiency (a.k.a. PE) is a collective measure of government revenues from productive activities, presumably representing various taxes on exports, license fees, guild taxes etc. Production efficiency converts a percentage of trade value to monthly income, either through production income or overseas tariffs, therefore it is a crucial factor in the economic balance of a nation. There are several modifiers to production efficiency:
- Production technology: +1% for each level
- Policy slider: Centralization/decentralization: +15% (full centralization) to –15% (full decentralization)
- National idea: Smithian economics: +20%
- Government types:
- Administrative Monarchy: +10%
- Constitutional Republic: +20%
- State religion: Protestant: +10%
- Advisor: Alderman: +1% per advisor level
Besides the effect that production efficiency has on monthly income it also affects the success chance of colonization attempts. Each 1% of PE increases that chance by 0.2%
Example calculation (for IN, 3.1)
Consider a province with population 73,325 people and a base tax 4 that produces salt. The owner of the province has 40% production efficiency. The global price of salt is 10.8.
Population Units = 0.99 + 73,325 / 100,000 + 4 / 20 = 1.92325 and after rounding to thousandth 1.923 (units of salt produced yearly)
Trade Value = 10.8 * 1.923 = 20.7684 ducats (total value of goods produced, this is added to the value of the regional CoT)
Monthly Production Income = 20.7684 * 0.4 / 12 = 0.69228 ducats (money you actually get as part of your Monthly Income)
Production Leader Bonus
Introduced in Divine Wind, producing a larger proportion of any good than any other nation provides an additional 5% production efficiency for that good, significantly boosting production income for that good, providing another incentive to expand as well as improving the research rate of especially large nations.