Net national income

{{short description|Measure of economic activity}}

In national income accounting, net national income (NNI) is net national product (NNP) minus indirect taxes.{{Cite web|url=https://economictimes.indiatimes.com/definition/net-national-income|title=Net National Income - What is Net National Income ? Net National Income meaning, Net National Income definition|website=The Economic Times|access-date=2019-02-23}} 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.{{Cite web|url=http://data.oecd.org/natincome/net-national-income.htm|title=National income - Net national income - OECD Data|website=theOECD|language=en|access-date=2019-02-23}}

It can be expressed as{{Cite web|url=http://www.businessdictionary.com/definition/net-national-income.html|title=What is net national income? definition and meaning|website=BusinessDictionary.com|language=en|access-date=2019-02-23|archive-date=2019-09-09|archive-url=https://web.archive.org/web/20190909123425/http://www.businessdictionary.com/definition/net-national-income.html|url-status=dead}}

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

where {{math|C}} denotes consumption, {{math|I}} denotes investment, {{math|G}} denotes government spending, and {{math|NX}} represents net exports (exports minus imports: {{math|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

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

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:

• $K\_m$ : manufactured capital (machines, factories, etc.)
• $K\_h$ : human capital (workers' skills)
• $K\_n$ : non-critical natural capital (minerals)
• $K\_h*$ : critical natural capital (air, water)