Question

This week’s discussion topic is about Gross Domestic Product (GDP), Per Capita GDP and Quality of Life. GDP is the market value of all final goods and services produced in an economy in a year. Per Capita GDP is GDP/Population and shows how much of total GDP is theoretically available to each individual in the society. Per Capita GDP is the normal measure of Standard of Living when comparing nations.

Quality of Life has no standard definition. It is broader concept that attempts to embrace the multitude of variables that make people happy. There are many measures of it, but all include GDP and/or Per Capita GDP.

The ultimate question for this week is: “Is GDP a good measure of national economic well being?”

Part of answering that question is a consideration of whether economic well being for the nation is the same as quality of life for the individual? If not, how would you measure quality of life for the individual?

Answer 1

Just by looking at the definition of GDP we can clearly say that GDP is not a good measure of national economic well being . It counts the total domestic production of final goods and services and not the distribution of resources in the economy . If the resources are concentrated in few hands then economic well being is not achieved although the GDP figures might be rosy .

Economic well being of a nation refers to availability of jobs , income , distribution of resources etc which can be measured by per capita income or employment rate of a nation . But quality of life encompasses a bigger picture which includes not only economic well being but also health , education , life expectancy , security , governance etc .

Quality of life should be measured on various parameters such as GDP , per capita income , population growth , health index , average longevity of life , crime rate etc .