Gross Domestic Product (GDP) is an inadequate measure of societal well-being and should be replaced by the Human Development Index (HDI)
This paper will discuss the anomally of Human Development Index (HDI) and Gross Domestic Product (GDP). In this discussion I will argue for HDI as a fairer comparison of a country’s overall economic wealth health and social well-being rather than the generally accepted method used by most countries of GDP. HDI allows for a more comprehensive understanding of well-being than purely economic measurements like GDP, and better identifies areas of need within countries. GDP is basicially a measure of a country’s overall economic output. It does not consider GDP per capita. If a country has an extremely large population, indication is not so favorable to describe the standard of living, because each citizen would only get a very small amount when wealth is being evenly distributed. What’s more, GDP, which is a traditional economic indicator alone, does not provide an adequate measure of an economy's sustainability. In contrast, from this paper, we can clearly know that HDI is able to secure basic human needs. It is a measure of a country’s average achievements in the areas of health, knowledge and standard of living. HDI is taking into accounts not only average consumption but also distribution and environmental degradation. Therefore, some people prefer using HDI instead of GDP for the reasons stated above.
Our choice of indicators reflects how we, as a society, define progress. Many synthetic indicators that we have surveyed are concerned primarily with ‘human and social’ questions, expressed in terms of human development; quality of life and social well-being. In this essay, my discussion will focus on the Gross Domestic Product (GDP) is an inadequate measure of societal well-being and should be replaced by the Human Development Index (HDI). There are three main parts that will be discussed in this essay, Economy, Sustinable development, and Life expectancy and education. Firstly, GDP does have advatages in that many nations use it to measure economy,but high GDP does not means high quality of living, So what is more significant is GDP per person or per family unit and it as one component of its HDI. What’s more, an increase in economic growth leads to an increase in inflation, which always hurts our whole social well-being. This essay will also discuss GDP does not properly account for social and environmental costs and benefits, and it is difficult to achieve sustainable development well-being. However, HDI is a more comprehensive indicator of well-being, taking into accounts not only average consumption but also distribution and environmental degradation. Last, life expectency and education are not apparent for people to find the effectiveness from GDP, but they are included in HDI which are more comprehensive to measure the social well-being.
Generally we discuss about measuring social well-being and development; we choose a series of indicators in different social fields, mainly economics, to describe how a particular society has progressed over the time. There are several phrases trying to explain what well-being really means to a society. Among these we have: “Societal Progress”, Standard living of Life”, “Human Development”, etc. (Gagrey &Catrice 2006)
Some people think that societal well-being and standard of living is directly linked to the economic growth of the nation as a whole and the traditional measure of the welfare or well-being is ‘gross domestic product’ (GDP). By definitions, GDP refers to the market value of all final goods and services produced within a country in a given period (Gagrey &Catrice 2006).The GDP considers the market value of goods and services to arrive at a number which is used to judge the growth rate of the economy and the overall ecnomic health of the nation concerned (Gagrey...