8.5 National Income Statistics Flashcards
(17 cards)
OECD Better Life Index
An alternative measure to standard national income accounting that measures economic well being in anumber of dimensions
Happiness Index/cintril ladder
An alternative measure to standard national income accounting that measures economic well being using numerous quallity of life dimensions
Happy Planet Index (HPI)
An alternative measure to standard national income accounting that measures economic well being using environmental sustainability and inequalities.
HPI= (well being x life expectancy x equality)/ ecological footprint
Non-marketed output
Goods and services produced but not sold in markets, such as household labor or volunteer work, which are not captured in GDP measurements.
Underground (parallel) markets
Economic activities that occur outside of government-sanctioned channels, often to avoid taxes or regulations.
What is Happiness Index based off?
Real GDP per capita
Social support
Healthy life expectancy
Freedom to make life choices
Generosity
Perceptions of corruption
Why GDP/GNI do not accurately reflect true output
Do not include output sold in underground markets
Do not take into account quality improvements in goods and services
Do not account for the value of negative externalities
Do not take into account the depletion of natural resources
Do not take into account differing domestic price levels (unless PPP is used)
Do not include non-marked output
Why GDP/GNI cannot accurately measure economic wellbeing
Make no distinctions about the composition of output (e.g. weapons vs education)
Cannot reflect achievements in levels of health, life expectancy and education
Provide no information on the distribution of income and output
Do not take into account increased leisure
Do not account for quality of life factors ( e.g. crime rate)
calculating gdp with price deflator
real GDP = Nominal GDP/price deflator x100
calculating gni with price deflator
real GNI = Nominal GNI/deflator x100
Price Deflator
Valze that allows data to be measured over time in terms of a base period, usually through a price index
Price deflator value for base year
100
KEY FLAW in GDP/GNI
Does not take happiness/living standards of citizens into account.
Green GDP
Adjusts GDP by subtracting environmental degradation and resource depletion
comparing GDP to other well being indexes
GDP = mostly monetary (no ecological impact, income distribution, living standards, well being)
Others = holistic BUT subjective
define living standrads
Citizens overall quality of life measure din terms of both material (housing) and non material (well being) factors
HDI
human development index (composite index based on GNi, living standards, education)
