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The GDP per capita is generally considered a proxy for welfare. What does it leave out?...

The GDP per capita is generally considered a proxy for welfare. What does it leave out? What would you see being reperesented in a measure of well-being? Defend your answer.

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Answer #1

GDP has several shortcomings/limitations as a measure of welfare, it leaves out; non monetary exchanges, externalities, stock of wealth, and type of goods and services it produces , the distribution of income, contribition of certain population segments etc. It does not take into account the valuable immaterial things which are equally important for our life.

So now a day several other indicators of welfare is used along with the GDP such as human development index, the United nation's environment led inclusive wealth index etc.In my view apart from GDP, education, women participation, environment, democratic setup,externalities, sustainability etc are the indicators which can be used to measure people's welfare .

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