Innational income accounting,net national income (NNI) isnet national product (NNP) minusindirect taxes.^[1] Net national income encompasses the income of households, businesses, and the government. Net national income is defined asgross domestic product plus net receipts ofwages,salaries andproperty income from abroad, minus thedepreciation offixed capital assets (dwellings, buildings, machinery, transport equipment and physical infrastructure) through wear and tear and obsolescence.^[2]

It can be expressed as^[3]

$${\displaystyle \mathrm{N}\mathrm{N}\mathrm{I}=\mathrm{C}+\mathrm{I}+\mathrm{G}+\mathrm{N}\mathrm{X}+\left[\genfrac{}{}{0ex}{}{\text{Net Foreign}}{\text{Factor Income}}\right]-\left[\genfrac{}{}{0ex}{}{\text{Indirect}}{\text{Taxes}}\right]-\left[\genfrac{}{}{0ex}{}{\text{Manufactured Capital}}{\text{Depreciation}}\right]}$$

whereC denotesconsumption,I denotesinvestment,G denotesgovernment spending, andNX represents net exports (exports minusimports:X – M).

This formula uses the expenditure method of national income accounting.

When net national income is adjusted for naturalresource depletion, it is calledAdjusted Net National Income, expressed as

$${\displaystyle {\mathrm{N}\mathrm{N}\mathrm{I}}^{\ast }=\mathrm{N}\mathrm{N}\mathrm{I}-\left[\genfrac{}{}{0ex}{}{\text{Natural Resource}}{\text{Depletion}}\right]}$$

Natural resources are non-criticalnatural 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)
• ${\displaystyle K_h\ast }$ : critical natural capital (air, water)

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

• Gross domestic product

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