Gross Domestic Product: Grossly Inadequate as a Measure of Well-being

GDP, or Gross Domestic Product, is universally acknowledged to be inadequate to gauge well-being. It doesn't count non-market activities such as caregiving and volunteering, it overlooks income inequality, and it fails to consider environmental destruction or subjective well-being indicators such as happiness. Other measures like the Human Development Index and Genuine Progress Indicator are more inclusive. In spite of its inadequacies, GDP is still a pervasive economic metric, usually confusingly synonymous with societal success. Initiatives are on to create more comprehensive indicators that reflect the real situation of economic and social development.

 

Source: Brookings Institution, Wellbeing Economy Alliance, Khan Academy.