Skip to main content
Back

Shortcomings of GDP definitions

Control buttons has been changed to "navigation" mode.
1/14
  • GDP
    A measure of total economic production, often used as a proxy for national well-being, but with notable limitations.
  • Household Production
    Economic activities like homemaking or cooking at home, which contribute value but are excluded from official economic measures.
  • Underground Economy
    Market transactions hidden from government oversight, including illegal trade and tax evasion, not reflected in official statistics.
  • Leisure
    Non-work time that enhances well-being but is not captured in economic output calculations.
  • Income Distribution
    The way total economic output is shared among citizens, which can be unequal even with high national output.
  • Nonmarket Production
    Goods and services produced for personal use or by informal arrangements, omitted from official economic data.
  • Environmental Quality
    The state of natural surroundings, which can be harmed by production but is not deducted from economic output figures.
  • Negative Byproducts
    Unintended harmful effects like pollution resulting from production, not subtracted from economic measures.
  • Well-being
    Overall quality of life, including factors beyond material output, such as safety, community, and leisure.
  • GDP per Capita
    Average economic output per person, often used to compare living standards but missing non-economic aspects.
  • Tax Evasion
    Illegal avoidance of taxes, leading to unreported income and transactions outside official economic statistics.
  • Illegal Activity
    Transactions forbidden by law, contributing to economic activity but excluded from official output measures.
  • Social Structure
    Patterns in society, such as workforce participation, that can affect economic output calculations over time.
  • Crime
    Acts against the law that may increase government spending and output figures without improving quality of life.