Question

Economists often measure the well-being of a society in terms of dollar-value of output. What types of things does this measure overlook in terms of the Standard of Living?

Answer 1

By limiting the well-being of a society in dollar value, economics overlook a number of other important factors including:

• Healthcare
• Education
• Happiness
• Child mortality
• Life expectancy

Step-by-step explanation:

Economists have long used a simple dollar value output of a country to measure their well-being. This was either done by measuring the GDP (gross domestic product) of a country of their GDP per capita i.e. output per person.

However, the productive capacity of a country is now clearly seen as not a good enough measure of a population's well-being. In the United States for example, there are a record number of billionaires while over 40 million people are living off food stamps.

In such a country, the GDP numbers are astronomical and it would seem like everyone is rich and living a life of luxury. however, this is not true.

Similarly, in a country like Srilanka, the GDP is not very high but when measured on other scales such as family values, happiness, food security etc, they are doing pretty well.