Mismeasuring Our Lives by Joseph E. Stiglitz Amartya Sen Jean-Paul Fitoussi

Author:Joseph E. Stiglitz, Amartya Sen, Jean-Paul Fitoussi
Language: eng
Format: epub
Publisher: New Press, The
Published: 2011-09-13T04:00:00+00:00

Main Messages and Recommendations

Recommendation 1: Look at income and consumption rather than production.

GDP is the most widely-used measure of economic activity. There are international standards for its calculation, and much thought has gone into its statistical and conceptual bases. But GDP mainly measures market production, though it has often been treated as if it were a measure of economic well-being. Conflating the two can lead to misleading indications about how well-off people are and entail the wrong policy decisions. Material living standards are more closely associated with measures of real income and consumption—production can expand while income decreases or vice versa when account is taken of depreciation, income flows into and out of a country, and differences between the prices of output and the prices of consumer products.

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