Many economists have tried to create a set of social accounts that would come closer to measuring the economic well being of the society than does GDP. What modifications of the current approach...

Many economists have tried to create a set of social accounts that would come closer to measuring the economic well being of the society than does GDP. What modifications of the current approach would you recommend to them?

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readerofbooks | College Teacher | (Level 2) Educator Emeritus

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This is an intelligent question. While GDP does give us a picture of economic well-being, it is not the only gauge or even the best gauge. For example, GDP is a very broad measure; therefore, it might not consider the disparity between the rich and poor.  Hence, there are many other variables that are necessary to consider.  Let me name a few. 

First, the cost of education is an important consideration. A country with a high GDP might not be better off if the cost of education is absorbent and prohibitive. For example, the cost of attending Harvard University with room and board is now over 60,000 a year. Most people cannot afford this. Sarah Lawrence is over 61,000. In light of this, a country like Canada that subsidizes college education might fare better and its citizens might be happier. 

Second, the elephant in the room is healthcare. Like the topic of education, healthcare prices have skyrocketed. This is taking a toll on many families who cannot afford healthcare or can afford it but at a great cost. This topic certainly affects the well-being of citizens. 

There are other measures that affect all of life, such as the price of oil. As you can imagine, if the prices of oil are low, then it affects nearly everything. 

In conclusion, there are many variables that sociologists can examine to measure well-being. Education, healthcare, and commodity prices are three important factors. 

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