Net domestic income

Net Domestic Income (NDI) is form of National Income Accounting (NIA) that takes the sum of net incomes earned and costs incurred in the production of net domestic product. It is equal to gross domestic income less consumption of fixed capital, and it is also equal to net domestic product less the statistical discrepancy. NDI comprises compensation of employees, taxes on production and imports less subsidies, and net operating surplus.[1] NDI is not a common tool used in macroeconomics for analyzing public policy, given that it is somewhat complicated to calculate and there are a number of well established alternatives in use.

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Formula

The basic formula is usually written as follows

W+P+i+F+(T-s)

Where W refers to wages and salaries, P is equal to before tax income of corporations, i refers to interest and capital gains, f is all farm and unincorporated business profits, and T-s refers to taxes minus any subsidies.[2]

See Also
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References
  1. "Net domestic income (NDI)" www.bea.gov.
  2. Lecture 3: National Income Accounting Reference - Chapter 5
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