When a person goes through an event that can be traumatic, such as a divorce or a natural disaster, that person may become less efficient and less productive. Do you think that there should be a dollar value placed on the deterioration of efficiency and productivity to offset the monetary gain that is enjoyed by some for these situations?
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Since you have tagged this with “genuine progress indicator” and “gross domestic product,” I assume that you are asking if we should, in some way, attach a monetary value to these events and deduct that amount from GDP when figuring out how well a country is doing. In other words, we should realize that divorce hurts the economy even though it might actually increase GDP because both sides have to pay lawyers. We should then subtract the monetary value of the decline in efficiency and productivity from GDP.
I do not think that this is necessary. The reason I say this is that the decline in productivity and efficiency is already accounted for in GDP. Let us say that someone works for an insurance company and is going through a divorce. The person stops doing their job as well as they should. The insurance company will, presumably, not make as much money because that person is not doing a good job of (for example) selling policies to people. If the person continues to do badly, they will be fired and GDP will drop. Declines in efficiency and productivity already show up in our economic statistics. Therefore, we do not need to try to attach a monetary value to the loss of productivity that comes about as a result of the sorts of stresses that you mention.
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