Is real GDP per person a sufficient

measure of well-being?

BM/2018/029
Department of Accountancy
Faculty of Commerce and Management Studies
University of Kelaniya

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 Title Page

Course Code :- BACC 12263

Course Title :- Macroeconomic

Academic Year :- 2018/2019

Semester :- Second Semester

Year :- First Year

Lecturers :- Dr.Wasanthi Madurapperuma

MS. Kaushalya Silva

Topic :- GDP Analysis

Student Name :- D.K.B.W.S.I.Ariyarathna

Student Number :- BM/2018/029

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Does the country with the highest GDP per person have the lowest infant mortality or
the highest life expectancy?

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The information provided above shows the infant mortality rate, life expectancy and per capita

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 income of 4 countries (France, Mexico, China, Sri Lanka). According to the data, France, the
country with the highest per capita income, has the lowest infant mortality rate at 3.2 per 1,000
live births and the highest life expectancy. It's 82.2 years. The above statement can be agreed
upon based on the information in France. But I cannot agree with the above statement based
on information from other countries. Out of these 4 countries, Sri Lanka, which has the lowest
per capita income, has a lower infant mortality rate than the other two countries (Mexico,
China). It is 7.8 on 1000 live births.

Sri Lanka has a longer life expectancy than those two countries. It's 77.5 years. The above
information confirms that infant mortality rate and life expectancy are not based solely on per
capita income. In addition to per capita income, many environmental factors contribute to
infant mortality, such as the mother's level of education, environmental conditions, and political
and medical infrastructure, as well as factors affecting infant mortality and life expectancy.
Therefore, it appears that countries with higher per capita incomes do not always have lower
infant mortality rates and higher life expectancy.

Country Infant Rate Life Rank GDP Rank

Mortality Expentancy Per capita
Rate At birth
Sri lanka 7.8 death/ 150 77.5 years 81 $4103 (2019) 163
1000 live birth

France 3.2 death/ 210 82.2 years 19 $45739 (2019) 35

1000 live birth

Mexico 10.7 death/ 126 76.7 years 91 $10275 (2019) 115

1000 live birth

China 11.4 death/ 114 76.1 years 104 $8041 (2019) 128
1000 live birth

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Can poorer countries do well on these alternative measures of well-being?
We can consider "well-being" a complex concept. There are several indicators to measure well-
being. An individual's GDP is one of them. But GDP is not conducive to finding wellbeing
because well-being explains non-numerical factors such as individuals' prosperity, health and
happiness. In addition to measurements in addition to GDP, alternatives use leisure time,
household size, and income distribution to measure well-being.

Although GDP is a useful factor in making decisions about countries, it is not always
appropriate to make decisions based on it. Well-being is a broader concept than GDP. Those
options are well suited to poor countries as well as to measure wellbeing in developed or
developing countries. Therefore, wellbeing in poor countries can be accurately measured using
alternative measurements.

Could people be misled about differences in living standards if they only compared
different countries' levels of GDP per person?

Per capita GDP is the size of the population in GDP. Therefore, per capita GDP was preferred
only to its monetary value. There are physical conditions in life as well as mental conditions
(an intangible element). All such factors cannot be measured by per capita income alone. Since
there are large aspects of living conditions, other criteria, including per capita income, should
be used to accurately measure them. They are Class disparity. Poverty rate,Quality and
affordability of housing, Hours of work required to purchase necessities, Affordable access to
quality healthcare,Quality and availability of education, Incidence of disease.More than per
capita income to measure living standards

HDI (Human Development Index) is appropriate as an alternative standard and uses many
factors ranging from life expectancy and education, to homicide rates. However, people are
misled by measuring living standards by comparing per capita incomes in different countries.

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