Magazine article The Wilson Quarterly

Measure for Measure

Magazine article The Wilson Quarterly

Measure for Measure

Article excerpt

THE SOURCES: "Beyond GDP: The Quest for a Measure of Social Welfare" by Mare Fleurbaey, in The Journal of Economic Literature, Dec. 2009, and "Measuring Quality of Life" by Renee Courtois, in Region Focus, Summer 2009.

IN THE WORLD OF ECONOMIC statistics, gross domestic product (GDP) is king. A measure of total economic activity, it reigns widely as the ultimate indicator of a society's well-being. Economists employ a related statistic, GDP per capita, or average income, to draw comparisons among countries and over time. But many critics say these numbers are misleading and that it's time to create other ways to measure quality of life.

They point to many flaws in the kingly statistic. For one, GDP rises when a country spends more in bad times, such as pumping up national defense during war, cleaning up after natural disasters, or paying for more police officers during a crime wave. Environmental degradation goes unnoticed in GDP, as do intangible additions to quality of life such as time enjoyed in a public park. And GDP ignores the distribution of wealth and opportunity within a society; a country with an extremely wealthy elite may have a higher GDP per capita than one with a large middle class, but it is hard to say that such a society is better off.

Moreover, behavioral economists point out that even at the individual level, higher income does not always mean greater happiness. As people make more money, their material desires increase as well, a phenomenon economists have called the "hedonic treadmill. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.