GDP Per Capita as a Measure of Well Being

Topic: FinanceBank
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Last updated: April 4, 2019

GDP Per Capita as a Measure of well being When countries are compared using their GDP per capita important factors such as health, education and quality of environment are not included and thus the overall well being of the nation may not be accurately measured, in order to determine whether this statement is accurate we should compare well being in countries with differing GDP per capita results, we will examine various statistics from the United States, Norway and the Netherlands.

Factors such as Health, Education, Unemployment, Banks, Prison Statistics and Wellbeing surveys must all be considered in order to determine whether the above statement is true. Gross domestic product (GDP) can be defined as the “total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports. GDP per capita on the other hand is defined as the approximate estimate of the value of goods produced per person in the country, it is calculate by dividing the country’s GDP by the total number of people in the country (Investor Words, 2011).

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The GDP per capita statistics according to the CIA World Factbook (2011), these statistics established in 2010 reveal the differences in GDP per capita between the countries that will be examined. GDP per Capita (2011) Rank| | Country| Value| | Date of Info| 6| | Norway | $59,100| | 2010 est. | 10| |  United States| $47,400| | 2010 est. 18| |  Netherlands| $40,500| | 2010 est. | (CIA World Factbook, 2011) We can see that these countries have a large difference in their GDP per capita, other factors must now be considered in order to determine whether GDP per capita is an accurate measure of well being.

In the Gallop Global Wellbeing Survey (2009), countries are ranked according to the feedback received from surveys completed by their citizens. Wellbeing Survey Rank ——–| Country ———————–| % Thriving —————| % Struggling —————-| % Suffering —————-| Daily Experience —————-| 3| Norway| 69| 31| 0| 7. 9| 5| Netherlands| 68| 32| 1| 7.

7| 14| United States| 57| 40| 3| 7. 3| | | | | | | As we can see people from Norway rank 3rd with none suffering and the majority of the population (68%) thriving, this is to be expected as the GDP per capita is higher than the other two countries, however, the Netherlands comes in 5th place with a similar percentage of the population thriving (67%) only 1% is suffering. The United States on the other hand is ranked down at 14th position with almost half of the population either Struggling (40%) or suffering (3%).These figures prove that GDP per capita may have an effect, but it does not guarantee that all of the population is in a good state of wellbeing. The World Health Organisation ranked countries of the world according to their Health Systems; this was done in 2000 and has not been done since due to the complexity of the task, at the time however our three countries were ranked as follows. Health System Rankings ————————————————- Rank Country ————————————————- 11 Norway ———————————————— 17 Netherlands ————————————————- 37 United States of America (World Health Organisation, 2000) Once again Norway ranks top, the Netherlands follows and the United States comes in last place despite its GDP per capita being much higher than the Netherlands. The United Nations Development Programme released statistics regarding the Prison Population and Incarceration Rate (2007) ranked by country, the results were as follows.

Prison Population and Incarceration Rate ———————————————— Prison Prisoners Per ————————————————- RankCountry/RegionPopulation 100,000 People ————————————————- 1United States2,186,230738 ————————————————- 78Netherlands 21,013128 ————————————————- 128Norway 3,04866 (United Nations Development Programme, 2007) Once again Norway has the best statistics, with Netherlands following and the United States achieving the worst possible rank in the study.The World Economic Forum (2009), completed an Executive Opinion Survey asking of members assess the soundness of banks within their country, 7 is a completely sound bank, where 1 is a bank in need of bailout. The rankings for our three countries were as follows. Soundness of Banks ————————————————- RankCountryScore ————————————————- 20Norway6. 1 ————————————————- 70Netherlands5. 2 ————————————————- 108United States4.

7 (World Economic Forum, 2009)Revealing that despite the high GDP in the country there is still no confidence in the performance of their banks, as in the recent recession where America struggled to free itself of the economic downturn despite its previously high output. Education is a factor that must also be considered in the wellbeing of the citizens of a given country, Organisation for Economic Co-operation and Development (2010), conducted a study called Programme for International Student Assessment (Pisa) which is a highly respected study worldwide, the study ranks the countries on scores achieved by students in reading, maths and science.Programme for International Student Assessment CountryRankReadingMathsScience Netherlands7508526522 Norway9503498500 United States14500487502 It is clear that despite the Netherlands having the lowest GDP per capita it still has the highest ranking of education out of the three countries. The last factor to consider in this study which ties into well being is the Unemployment rate of the country, the CIA World Factbook (2011), released these results. Unemployment rate (%) (2011) Rank| | Country| Value| | Date of Info| 67| |  United States| 9.

60| | 2010 est. | 94| | Netherlands| 5. 50| | 2010 est. | 06| |  Norway| 3. 70| | 2010 est.

| | | | | | | Once again Norway achieves the best ranking, with the United States getting the worst of the three. Norway having the highest GDP per capita of the three countries also had the best results in Wellbeing, Incarceration Rate, Soundness of Banks, Unemployment and Health System rankings. Netherlands on the other hand had the lowest GDP per capita of the three achieved the best results for Education and was in second place in all of the other rankings, despite the United States higher GDP per capita it received the worst rankings out of the three in every area of wellbeing.Norway had the highest GDP per capita and good results which argues for the fact that GDP per capita can be a measure of wellbeing, however, the results from the Netherlands and United States argues in the opposite direction.

Despite Americas’ clearly dominant GDP per capita, over Netherlands, it still fails to get a better result in any other areas of well being.It is clear from these results that a countries GDP per capita is not a clear indication of the wellbeing of its citizens, the fact that the people in the United States are less happy, more criminally inclined, receiving less health care, a worse education and have little confidence in their banks compared to Netherlands, yet they have a higher GDP per capita is a clear indication that GDP per capita is not a good measure or way to rank countries, rather all these other factors should be taken into account to measure well being.


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