Research Publication Title

Looking Beyond GDP: Alternative Measures of Wellbeing

Major

Finance

Faculty Mentor(s)

Dr. Brooke Conway, Assistant Professor of Economics Department of Economics & Finance

Keywords

Economic and Social measures, GDP, Social Progress Index, Inclusive Development Index, Social development, Economic development

Abstract

For more than eighty years policy makers across the world have been targeting GDP growth as the main goal of national development. As a result, world GDP per capita has quadrupled since 1990 and the world poverty rate is now below 10%. Unfortunately, GDP does not capture all aspects of human well-being, such as health and wellness, tolerance and inclusion, and personal freedoms. The central question of this project focuses on how one might measure these other factors of human wellbeing so that policymakers are better able to evaluate the results of their policies and target improved outcomes for more people. To answer this question, I explore two new indices, the Social Progress Index and the Inclusive Development Index. Each index uses a myriad of factors to offer a more complete measure of a nation`s development. The main purpose of the project is to present the methodologies for each index, comparisons of country rankings based on these indices, and the relationship between these indices and GDP. GDP can be a misleading measure of wellbeing as it does not incorporate the various complexities of an economically and socially developed nation. These indices, while correlated with GDP, provide a more diversified and complete measure on which policy makers can focus.

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Looking Beyond GDP: Alternative Measures of Wellbeing

For more than eighty years policy makers across the world have been targeting GDP growth as the main goal of national development. As a result, world GDP per capita has quadrupled since 1990 and the world poverty rate is now below 10%. Unfortunately, GDP does not capture all aspects of human well-being, such as health and wellness, tolerance and inclusion, and personal freedoms. The central question of this project focuses on how one might measure these other factors of human wellbeing so that policymakers are better able to evaluate the results of their policies and target improved outcomes for more people. To answer this question, I explore two new indices, the Social Progress Index and the Inclusive Development Index. Each index uses a myriad of factors to offer a more complete measure of a nation`s development. The main purpose of the project is to present the methodologies for each index, comparisons of country rankings based on these indices, and the relationship between these indices and GDP. GDP can be a misleading measure of wellbeing as it does not incorporate the various complexities of an economically and socially developed nation. These indices, while correlated with GDP, provide a more diversified and complete measure on which policy makers can focus.