Beyond GDP? Welfare across Countries and Time
We propose a summary statistic for the economic well-being of people in a country. Our measure incorporates consumption, leisure, mortality, and inequality, first for a narrow set of countries using detailed micro data, and then more broadly using multi-country data sets. While welfare is highly correlated with GDP per capita, deviations are often large. Western Europe looks considerably closer to the U.S., emerging Asia has not caught up as much, and many developing countries are further behind. Each component we introduce plays a significant role in accounting for these differences, with mortality being most important.
We are grateful toMark Aguiar, Romans Pancs, Luigi Pistaferri, David Romer,DavidWeil, Alwyn Young, and many seminar participants for helpful comments, to David Laibson for a conversation that inspired this project, and to Gabriela Calderon, Siddharth Kothari, Jihee Kim, Huiyu Li, Alejandro Molnar, Ariana Poursartip, Rui Xu, and Zhen (Zachary) Yan for excellent research assistance. An online appendix for this paper is available at http://www.stanford.edu/~chadj/BeyondGDP-OnlineAppendix.pdf. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Charles I. Jones & Peter J. Klenow, 2016. "Beyond GDP? Welfare across Countries and Time," American Economic Review, vol 106(9), pages 2426-2457. citation courtesy of