Gdp Is Not a Perfect Measure in Economy
By definition the GDP (Gross Domestic Product) is a measure of the income and expenditures of an economy. Also, it can be defined as the total market value of all final goods and services produced within a country in a given period of time.
Base on GDP definition and base on many economist points of view regarding to the definition of well being. I understand that GDP is not a perfect measure of economic well being of a nation for many reasons:
The gross domestic product (GDP) is not a sufficient measure because it fails to capture important ingredients of prosperity, such as health, personal freedom, and security.
For example, companies might produce an additional $200 billion in goods and services but create pollution that makes us feel worse off by, say, $300 billion. The GDP accounts simply report the $200 billion in increased production. Indeed, some of the environmental degradation might itself boost GDP. Dirtier air may force us to wash clothes more often, to paint buildings more often, and to see the doctor more often, all of which will tend to increase GDP.
In conclusion, G.D.P. does not take into account some of the negative effects of economic growth, like pollution. It does not factor in leisure time, or parts of the “informal economy”: like parents’ unpaid care for their own children that have value but not necessarily measurable, marketable value. It does not give any sense of how equitably distributed a country’s wealth is; a country could theoretically have both the world’s highest G.D.P. and the world’s highest poverty rate simultaneously. It also does not reflect quality of life or happiness in any given country. Robert Kennedy articulated this concern in a speech in 1968 when he lamented that GDP “measures everything .except that which makes life worthwhile.”