GDP And WELLBEING
Read through the shortcomings of GDP identified in your textbook. Next look at this https://www.cbsnews.com/news/why-gdp-fails-as-a-measure-of-well-being/. article published by CBS News. Do you agree with the author's assessment that GDP fails to measure well being? Why (or why not)? Are there things that contribute to your well-being and happiness but are excluded from the calculation of GDP? Share an example and describe why it might be excluded from the GDP calculation.
GDP, or Gross Domestic Product, is a measure of the total value of goods and services produced in a country in a given year. It is often used as a measure of a country's economic health and well-being. However, there are a number of shortcomings to using GDP as a measure of well-being.
Some of the shortcomings of GDP identified in my textbook include:
- GDP does not account for the distribution of income. A country with a high GDP could have a small number of very wealthy people and a large number of poor people, and GDP would not reflect this.
- GDP does not account for the value of non-market goods and services. These include things like volunteer work, housework, and leisure time.
- GDP does not account for the environmental impact of economic activity. A country that produces a lot of pollution could have a high GDP, but this would not reflect the negative impact of pollution on the environment.