What are the problems of GDP as a measure of well-being?


What are the problems of GDP as a measure of well-being?

What does Gross Domestic Product measure?

Gross Domestic Product (GDP) is an estimate of the real dollar value of all goods and services produced in an economic system over a period of time, usually a year. GDP per capita takes the GDP number and divides it by the population to obtain GDP per capita, a better measure of the country's standard of living.

Answer and Explanation:

Looking at GDP without also estimating GDP per capita does not provide a good measure of the well-being of a country and its people. Another problem associated with GDP as a measure of well-being is more complex. Measuring the material wealth of a population does not say anything specific about whether the people are happy and content with their circumstances. Scholars around the world have recognized this deficiency and are working to find a measure of happiness, but nothing has been accepted on a global basis yet.

Learn more about this topic:

How Real GDP per Capita Affects the Standard of Living

from Economics 102: Macroeconomics

Chapter 10 / Lesson 2

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