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==Components of net output==
The value of an aggregate net output is normally understood to be equal to the sum of
*labour costs (or [[Compensation of employees]]),
*depreciation (or [[consumption of fixed capital]]),
*income tax and indirect tax imposts on production, reduced by government subsidies to producers,
*profit (or [[operating surplus]]).
In calculating net output for national accounts, government subsidies received by producing enterprises are normally subtracted from indirect tax levies paid by them during the same accounting period.
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The total net output of resident producers in a national economy is equal to [[Gross Domestic Product]] or [[GDP]]. Included in this total is the productive activity of government agencies and certain income-generating activities of households.
*Usually the term "net output" is used to refer to the contribution which a particular economic sector (for example, agriculture, manufacturing, business services etc.) makes to total value added or [[GDP]] during a quarter or a year.
*The net output of a ''particular industry'' should not however be confused with the ''total value of its outputs'', since in reality that total value includes the value-added by production '''plus''' the value of inputs used up (i.e. [[intermediate consumption]]) in producing the total value of outputs. For example, in making a car, a car factory adds value to the materials and components used to make the car. But the value of the finished car doesn't just include that value-added in production, but also the materials and ancillary operating costs used to make the car. Thus, if we want to know the total sale value of the output of the car factory, the relevant measure is not the "net output" (the value-added), but rather the [[gross output]]. If, for example, we wanted to calculate a "unit labour-cost" for the output value of the cars, the appropriate ratio is between labour costs and the ''gross'' output value of the cars. It follows that the total new net output value of a whole country, after deducting the value of goods and services used up from the gross expenditure or gross sales revenue, is a ''different concept'' from the net output of a particular industry.
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==Criticism==
As mentioned, the calculation of net output requires a [[value theory]], a way of grossing and netting, and techniques for aggregating the prices of transaction volumes in a consistent way. Obviously, there are many different ways of going about this, but normally a legal framework limits the number of variations possible or permitted (business accounts have to be audited and so on, to guarantee a fair statement of business operations within the law of the land). Nevertheless, the procedure for establishing net output can be contested.
*The valuation standards applied may be contested and differ somewhat between different countries.
*In [[Marxian economics]], the [[value product]] is offered as an alternative output measure, reflecting the new value produced by living labor.
▲*In [[Marxian economics]], the [[value product]] is offered as an alternative output measure, reflecting the new value produced by living labor.
*But there is also an [[ecology|ecological]] criticism that is sometimes made. The argument here is that, in calculating net output, costs and results are only assessed in ''price'' terms. Therefore, inputs to production and outputs which are not priced, are excluded in the valuation. Yet those inputs and outputs may nevertheless have an economic or human value, regardless of whether a price could be imputed to them or regardless of whether they can be made an object of trade. If the air is polluted, or depletion of fish stocks in the open seas occurs, the cost of repairing that is not accounted for in the net output of polluters or fishing companies. Sometimes [[tax]] levies are therefore imposed. Nowadays the [[Kyoto protocol]] has inspired "emissions trading", where the right to pollute is bought and sold, which some regard as a strictly perverse activity. Others however argue it proves the ability of competitive markets to solve any problem of resource allocation.
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