Income-based Measures of Average Well-being

  • Steve Dowrick
Part of the Studies in Development Economics and Policy book series (SDEP)


International comparisons of living standards or development are most commonly made in terms of gross domestic product per person — whether in newspaper articles examining the latest country rankings or in economics journals analyzing the relative performance of countries. Such comparisons are open to criticism on the grounds that GDP is more properly regarded as a partial measure of aggregate output than as an indicator of either current or future well-being. International GDP comparisons make no allowance for environmental differences, for resource depletion, for leisure, for household production of goods and services, for black market activities or for external costs and benefits associated with production and consumption.


Purchasing Power Parity United Nations Development Programme Price Vector Penn World Table Consumption Bundle 
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© United Nations University 2007

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  • Steve Dowrick

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