They say what matters most in life are the things money can’t buy.
So far, we’ve been paying attention to a figure that’s intimately linked to the things money can buy. That figure is GDP, both nominal, and real. But before you write off GDP as strictly a measure of wealth, here’s something to think about.
Increases in real GDP per capita also correlate to improvements in those things money can’t buy.
Health. Happiness. Education.
What this means is, as real GDP per capita rises, a country also tends to get related benefits.
As the figure increases, people’s longevity tends to march upward along with it. Citizens tend to be better educated. Over time, growth in real GDP per capita also correlates to an increase in income for the country’s poorest citizens.
But before you think of GDP per capita as a panacea for measuring human progress, here’s a caveat.
GDP per capita, while useful, is not a perfect measure.
For example: GDP per capita is roughly the same in Nigeria, Pakistan, and Honduras. As such, you might think the three countries have about the same standard of living.
But, a much larger portion of Nigeria's population lives on less than $2/day than the other two countries.
This isn’t a question of income, but of income distribution—a matter GDP per capita can’t fully address.
In a way, real GDP per capita is like a thermometer reading—it gives a quick look at temperature, but it doesn’t tell us everything.
It’s far from the end-all, be-all of measuring our state of well-being. Still, it’s worth understanding how GDP per capita correlates to many of the other things we care about: our health, our happiness, and our education.
So join us in this video, as we work to understand how GDP per capita helps us measure a country’s standard of living. As we said: it's not a perfect measure, but it is a useful one.
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Good video, however it's the governments that don't want to invest in research to find new international standards to quantify growth, they are happy to use one very old indicator. Venture capitalist Nick Hanauer and guest academics explain the real situation in the pitchfork economics podcast. It's as if they don't want the layman to easily discern what the real situation is so they can say overall growth continues, if we change anything (like add regulations to the free market) the whole system would collapse. But why shouldn't the UN introduce a process and definition that is more complex and more defined? It would benefit the greatest number of people by letting us know the true impact our government policy makers have had. The video is fine until he said "Growth in GDP per Capita USUALLY does indicate growth in everyone's income over time, including the incomes of the very poor". Such an ambiguous and misleading sentence. The pictograph isn't even fully annotated, anyway you would expect it to grow slowly over time. It would have grown exponentially faster if the markets were regulated to ensure inequality wasn't increasing and predominantly benefiting the corporations and the elite.
Hi, average Joe here. Is it possible to derive with a more objective value of "GDP per Capita" by correlating it with an added variable called "Distribution of Wealth index"? Performing the most logically suitable math operation between both of 2 values will result in a more objective "GDP per Citizen" value - which is more useful for an average Joe. What did i miss, or maybe reinvented an already existing thing? I know there exists 2 more values of buying power, one is correlated with outside market, and one with inland market. These values are also pretty telling about the standards of living, though are a bit tricky to understand.
Growth in GDP and GDP per Capita doesn't not necessarily mean there will be growth for all incomes over time. Its entirely possible for new wealth generated to be concentrated in the hands of a much smaller class.
You're doing good, very good I think. Your video's are very informative. I'm learning very much things I never knew so well before. Your presentation and axplenation style are very understandible. It's fantastic that you make and publish these good video's. You are rendering a good international service by that. I hope you will continue producing and publishing this kind of video's. Thank you very very much.
A truly fair and realistic assessment of a nation's national per capita income would concentrate specifically upon the incomes of the most of its salaried workers in professions that require a bachelor's or higher degree, or a HS diploma and a hardcore skill, but do not require a professional license. Everything else is just window-dressing.
lessen population to improve GDP per capita, China had a strict one child policy for a long time and their GDP per capita grew, countries with a less population and more money to match the population which is high GDP per capita are the best places in the world which means wage are much higher and less competition for money. jobs, resources and space people have a easier life and quality lifestyle and the government also stays good with lesser people to support and maintain a good infrastructure, pension plans for citizen and cope with other government responsibility and these countries can also exploit other countries by running their companies companies, investments and extracting cheap labor in the form of outsourced work.......
NOPE. It is a mediocre indicator that must be replaced for the new generation.
How about pollution and environmental stress?
Great thinkers have said that those who believe on everlasting GDP growth for happiness are crazy. We are so obsessed with GDP growth that we are irreversably damaging the planet over it. Side note.. you must account for debt levels of a country when you look at gdp as well as distribution. You can grow at the expense of your kids. Barbaric.
But real income of the people doesn't grow over growth of real GDP per capita always as the real income suggest the growth including the inflation and thus the percentage of poor and rich remains the same..
Pakistani wealth is unevenly distributed after Nigeria. So true. It's a beggar country with such low per capita income and almost pathetic GDP. It begs hefty dollars from USA for development and then uses it for terrorism. Unemployment is highest in Pakistan. Pathans are forced to live in non urban, forest and barren area of Pakistan. Pakistan doesn't have access for clean drinking water and food. 1/3 rd of the Pakistan sleeps without eating food. Infrastructure is pathetic that you won't find sky scrapers, proper roads and even drainages. They don't work on their problems and often show fake stats to world. Even their science and history revolves around glorifying Islam. They get medical visa from India because there are no sufficient modern hospitals in Pakistan. Also, Pakistan doesn't even own water. Under Indus water treaty, India donates its water to Pakistan. Nearly, 40 million Pakistanis lack access to toilets. Farming is destroyed. Wealth is concentrated by corrupt politicians, terrorist organisation and military men with higher posts. This country even doesn't get proper electricity and imports it from India. They owe a heavy debt to USA and is now have become slave of communist China. Pakistan inflicts atrocities on Balochistan, Pakhtoons, sindhis. The dominant Punjabis Muslims are sharia oriented and have no human rights for Minorities in Pakistan.
Very interesting How ever in-spit of the very poor having an increase in income the failure to measure this against product inflation still leaves the very poor in the same predicament / Eg bread costs $ 1.00 now and in three months later it costs $ 1.50 but the value of the Dollar decreases and the price of goods go up I now by less than what I did meaning that A poor person is still poor even if they did get an increase on income say 2% the inflation rate out stripes the increase and this can be clairlly see in most third worlds
_Nominal_ per-capita improvements in income of the poor don't really tell us if the poor (the bottom 20%) are actually better off. Wouldn't we need to see _real_ per-capita income? In other words, just because income increases per-capita doesn't mean that the money they earn will buy the things they need.
Perhaps using a measure like Purchasing Power Parity or something similar to it to really understand how much better the poor are doing as per-capita income rises?
What if nominal per-capita income rises, but free time and disposable income decline? How might we measure for that?
watching this a couple of years late from release but one of the best material for gdp!! I was struggling to find a decent web series about the same and accidentally stumbled upon this and boy was it worth it!! Thanks a lot for making this video series!!
some of the expressions in the videos are a little bit misleading because the inferences from the statistical data are overgeneralized. The things about HDI for example... What about overachievers and underachievers????
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