Inadequate measure of well-being
services within countries. GDP is a monetary measure of the value of all final goods and services produced in a period and CBS News says that, “Standard GDP statistics miss many of technology’s benefits, so we need to rethink how we measure the typical person’s well-being.” An example of this is that the GDP only counts goods that pass through official, organized markets, so it misses home production and black market activity. Families who pay for home services, house cleaning and yard work for instance, are the ones who will be responsible for the GDP to appear larger even though the total amount production hasn’t changed. Another display of an ineffective use of GDP for the real world would be that there is no adjustment for leisure time, meaning that economies only record work hours and productivity rather than the important features of having a real job, consecutive hours worked and salary based income.
Disscution2:
GDP is not an adequate measure of human well-being. There are many different ways to approach GDP, whether as real or nominal, but GDP by itself is an inadequate measure for human well-being as it does not take in consideration of many other factors. It’s an indicator for production and services in a given time and that’s the only thing it can be accounted for. It doesn’t take in account for the mental state of the people that live in “x” country, production that isn’t looked over by the government, and it only takes in consideration of a paid service, but not by the same service if the service wasn’t paid (CBSNEWS). Ray Williams from Psychology Today states that in 2009 countries with a high GDP scale, such as Norway with a GDP capita of $98,822, was still ranked below New Zealand with a capita of $30,556 when it came to a comparison of overall economic health simply because the happiness of citizens had an overwhelming difference. GDP does not take in account for amount of time worked per citizen as well. A country with a daily work schedule of 12 hours a day, could be equivalent to another country that only has their citizens with a 6 hour schedule a day, because of GDP won’t accurately show amount of leisure time that is given (CBSNEWS).
In the end, GDP is accurate in a sense for it’s sole purpose of showing production and services, but when it is given in a way of per capita, it can be construed because of wealthy people that make up the difference in the lower class. GDP also fails in providing an accurate description of the way that a country’s people live, whether they are in happiness or n
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I agree that GPD is not an adequate measure of well-being but not because it does not measure the cost of goods and services. Even if it measured the cost of goods and services it would still be an inadequate measure of well-being because well-being encompasses both economic and social aspects. Other than failing to account for the black market transactions, GDP does not take into account pollution, education, health sector and income distribution. Paying for home services is not accounted for in the determination of GDP and therefore it leads to understatement of the GPD……………………………..
APA
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