The GPI includes a wide measure of factors affecting the quality of life. Measure of economic welfare (MEW) Genuine Progress Indicator GPI Source: Ida Kubiszewski et al, “Beyond GDP: Measuring and Achieving Global Genuine Progress,” Ecological Economics, 93, (2013). The Human development index looks at three main factors – living standards, health and education A state with high military spending will have lower living standards than a country that invests heavily in public transport, education and healthcare. GDP doesn’t measure what is actually produced and consumed. Social Investment v Present Consumption.Global Warming could tip the ecological balance in some countries with fragile eco-balance. Climate can make some areas inhospitable leading to defensive spending, e.g. Basic necessity is often taken for granted in West, a but, is big issue in the developing world. a new road may reduce congestion but damage areas of outstanding natural beauty. Protection of wildlife and areas of natural beauty important. Quality and quantity of ‘green spaces’ where people can escape pressures of cities, e.g. For example, average traffic speeds (11mph) in London (2010) are similar to 100 years ago when we still used the horse and cart Congestion can lead to time lost sitting in traffic jams as well as being frustrated. The quality of air can influence the quality of life and also health issues. The standard and quality of housing and related amenities. For example, Sri Lanka has a higher rate of literacy than Saudi Arabia, despite a lower GDP per capita. One simple measure is the rate of literacy in an economy. Dependent on health care standards, environmental factors and cultural factors widespread part-time/temporary contracts may suggest underemployment in the economy. Unemployment is one of the main economic causes of poor life changes.

Some countries have high GDP per capita, but some people still live in poverty.

Higher GDP enables a country to alleviate levels of absolute poverty.

This is a guide to national output and influences the level of consumption. However, quality of life depends on many other factors apart from just GDP. Often in economics, we focus on GDP statistics (measuring national output). Measuring economic welfare is not an exact science.

Quality of life