Measuring Social Welfare: Gdp or Hdi?
Measuring social welfare: GDP or HDI?
FULL NAME: Bui Lan Phuong- 1111150187
Nguyen Thi Hoa- 1111150099
CLASS: A30
FACULTY: Economics and International Business
For the past few years, interest in aggregate or composite indicators of economic and social well-being at the community, national and international levels has grown greatly. For example, the annual release of the United Nations’ Human Development Index (HDI) generates considerable media interest, particularly in Canada. It is, therefore, often in debates on the inadequacies of Gross Domestic Product (GDP) as a welfare measure. The main question is that whether GDP, which is already and frequently used, or HDI, which consists of more factors including GDP, more suitable and accurate to rank countries in terms of social well-being.
To start with, social well-being is an end state in which basic human needs are met and people are able to coexist peacefully in communities with opportunities for advancement. This end state is characterized by equal access to and delivery of basic needs services (water, food, shelter and health services), the provision of primary and secondary education, the return of resettlement of those displaced by violent conflict, and the restoration of social fabric and community life. This term, consequently, is the leading comprehensive to rank countries.
Taking GDP into account, it is the market value of officially recognized final goods and services produced within a year. GDP is equal to Consumption + Gross Investment + Government Spending + (Exports – Imports), or GDP = C + I + G + (X – M). GDP per capita is often considered an indicator of a country‘s standard of living. To be more specific, GDP does not measure people’s well-being, but rather, as everyone has already reckoned, the well-being of the economy. In addition, it indicates the value of what has been produced in the economy over the year, thus, telling how much stuff the nation has. GDP is, apparently,
FULL NAME: Bui Lan Phuong- 1111150187
Nguyen Thi Hoa- 1111150099
CLASS: A30
FACULTY: Economics and International Business
For the past few years, interest in aggregate or composite indicators of economic and social well-being at the community, national and international levels has grown greatly. For example, the annual release of the United Nations’ Human Development Index (HDI) generates considerable media interest, particularly in Canada. It is, therefore, often in debates on the inadequacies of Gross Domestic Product (GDP) as a welfare measure. The main question is that whether GDP, which is already and frequently used, or HDI, which consists of more factors including GDP, more suitable and accurate to rank countries in terms of social well-being.
To start with, social well-being is an end state in which basic human needs are met and people are able to coexist peacefully in communities with opportunities for advancement. This end state is characterized by equal access to and delivery of basic needs services (water, food, shelter and health services), the provision of primary and secondary education, the return of resettlement of those displaced by violent conflict, and the restoration of social fabric and community life. This term, consequently, is the leading comprehensive to rank countries.
Taking GDP into account, it is the market value of officially recognized final goods and services produced within a year. GDP is equal to Consumption + Gross Investment + Government Spending + (Exports – Imports), or GDP = C + I + G + (X – M). GDP per capita is often considered an indicator of a country‘s standard of living. To be more specific, GDP does not measure people’s well-being, but rather, as everyone has already reckoned, the well-being of the economy. In addition, it indicates the value of what has been produced in the economy over the year, thus, telling how much stuff the nation has. GDP is, apparently,
References: [ 7 ]. 2010 Human Development Report: Asian contries lead development progress over 40 years, [ 8 ] [ 10 ]. Human Development Report, 2006, United Nation Development Program