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the production process) in all resident producing units, during some accounting period, usually
a year. See 'national income'.
Gross fixed capital formation (GFCF) - the total value of a producer's acquisitions, less disposals,
of fixed assets during the accounting period, usually a year. Conventionally excludes natural
assets which are not man-made and/or owned.
Gross income - 'Gross revenue', 'turnover', usually a private measure.
Gross national product (GNP) - the same as GNP except that it includes income earned abroad by
nationals, and excludes income transferred abroad by foreign owners. See 'national income'.
Gross national income (GNI) - the measure of the income earned, whether domestically or abroad,
by factors of production owned by residents. See 'national income'.
Gross operating surplus - that part of 'value added' that is not payments for labour or taxes on
production.
Gross output - 'gross revenue' in economic terms, commonly the aggregate of all gross revenues in
the economy.
Gross revenue – in general terms, equal to the unit price multiplied by the quantity of units sold by a
production unit. Here used as a private value.
Imports - goods or services consumed in one country which have been brought from another country.
Indirect use value – the benefits derived from the goods and services provided by an ecosystem that
are used indirectly by an economic agent. For example, an agent at some distance from an
ecosystem may derive benefits from drinking water that has been purified as it passed through
the ecosystem.
Multiplier - the amount by which equilibrium output of the economy changes when aggregate
demand – as caused for example by the expenditure by a development project – increases by
one unit. As those receiving the initial round of income generated are likely to consume a
portion of the additional income, this subsequent expenditure will lead to additional ripple
effects of rounds of income and consumption throughout the economy. The net effect of these
increases in output is the multiplier effect of the initial expenditure, measured as a proportion of
the initial expenditure. Multipliers can be measured with respect to income, value added,
imports, production, etc.
National accounts – the compilation of accounts to derive estimates of the 'national income'.
National income - the total net earnings of labour and property employed in the production of goods
and services in a nation during some accounting period, usually a year. Commonly measured
by the 'gross domestic product' (GDP) the 'gross national product' (GNP), and the 'gross
national income' (GNI). Measured either as the value of all expenditure on final goods and
services, the value of all payments to factors of production, or the value of all value added by
producing units.
Natural asset value – capital value of the stock of a natural resource. This is the present value of the
stream of future 'economic rents' ('resource rents') that a natural resource will generate.
Present values are typically obtained by 'discounting' future benefits and costs.
Natural resource accounts - the compilation of asset and 'flow accounts' for natural assets, to
complement the 'national accounts'. Asset accounts are valued in terms of 'natural asset value',
flow accounts are valued in terms of 'national income'.
Net income - 'profit', a private value.
Net national income - 'Gross national income' less depreciation of assets.
Net present value – the present value of an investment, found by 'discounting' all current and future
streams of income or expenditure by a 'discount rate'.
Non-use value – see ‘existence value’
Open access resource – a good or service over which no property rights are recognised.
Opportunity cost – the benefits foregone by undertaking one activity instead of another.
Option value – the value of preserving the option to use services in the future.
Precautionary approach - according to the Rio Declaration on Environment and Development
(1992) where there are threats of serious or irreversible damage, lack of full scientific certainty
shall not be used as a reason for postponing cost-effective measures to prevent environmental
degradation.
Private costs and benefits – costs and benefits directly felt by individual economic agents or groups
as seen from their perspective. Costs and benefits are valued at the prices actually paid or
received by the group, even if those prices are highly distorted. Sometimes termed ‘financial’
costs and benefits.
Production unit - an entity engaged in a productive activity, here describing an enterprise, commonly
a household or a firm.
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