In national income accounting, net national income ( NNI ) is net national product (NNP) minus indirect taxes . ^[1] Net national income encompasses the income of households, businesses, and the government. Net national income is defined as gross domestic product plus net receipts of wages , salaries and property income from abroad, minus the depreciation of fixed capital assets (dwellings, buildings, machinery, transport equipment and physical infrastructure) through wear and tear and obsolescence. ^[2]

It can be expressed as ^[3]

$${\displaystyle \mathrm {NNI} =\mathrm {C} +\mathrm {I} +\mathrm {G} +\mathrm {NX} +\left[{{\text{Net Foreign}} \atop {\text{Factor Income}}}\right]-\left[{{\text{Indirect}} \atop {\text{Taxes}}}\right]-\left[{{\text{Manufactured Capital}} \atop {\text{Depreciation}}}\right]}$$

where C denotes consumption , I denotes investment , G denotes government spending , and NX represents net exports ( exports minus imports : X ? M ).

This formula uses the expenditure method of national income accounting.

When net national income is adjusted for natural resource depletion , it is called Adjusted Net National Income , expressed as

$${\displaystyle \mathrm {NNI} ^{*}=\mathrm {NNI} -\left[{{\text{Natural Resource}} \atop {\text{Depletion}}}\right]}$$

Natural resources are non-critical natural capital such as minerals. NNI* does not take critical natural capital into account. Examples are air, water, land, etc.

For reference, capital (K) is divided into four categories:

• ${\displaystyle K_{m}}$ : manufactured capital (machines, factories, etc.)
• ${\displaystyle K_{h}}$ : human capital (workers' skills)
• ${\displaystyle K_{n}}$ : non-critical natural capital (minerals)
• ${\displaystyle K_{h}*}$ : critical natural capital (air, water)

See also [ edit ]

• National Income Accounting
• Gross domestic income
• Gross domestic product

References [ edit ]