GDP as a Measure of Society Well-Being
How well does GDP Measure Society Well-Being?
Written by J. Mance Gordon
Updated at April 23rd, 2024
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How well does GDP Measure Society Well-Being?
The level of GDP per capita clearly captures some of what we mean by the phrase “standard of living.” Most of the migration in the world, for example, involves people who are moving from countries with relatively low GDP per capita to countries with relatively high GDP per capita.
“Standard of living” is a broader term than GDP. While GDP focuses on production that is bought and sold in markets, standard of living includes all elements that affect people’s well-being, whether they are bought and sold in the market or not. To illuminate the difference between GDP and standard of living, it is useful to spell out some things that GDP does not cover that are clearly relevant to standard of living.
Related Topics
- Macroeconomics
- Macroeconomic Frameworks
- Macroeconomic Policy Tools
- Productivity Economics
- One-Third Rule
- Gross Domestic Product (GDP)
- Durable and Non-Durable Goods
- Weightless Economy
- Intermediate and Final Goods or Services
- Nominal GDP
- Converting Nominal to Real GDP
- GDP Inflator
- Nominal GDP Price Index
- Measuring GDP
- Gross National Product
- Net National Product
- Factor Income
- Gross National Income
- Expenditure Method
- The Problem of Double Counting GDP
- Double Counting
- Why is Tracking Real GDP Important?
- Convert Currencies with Exchange Rates
- Convert GDP to a Common Currency
- Per Capita GDP
- GDP Per Capita
- GDP as a Measure of Society Well-Being
- Limitations of GDP as a Measure of the Standard of Living