Gross domestic product (GDP) measures the total output of an entire economy by adding up total consumption, investment, government expenditure, and net exports. GDP ﷺis therefore consi🍌dered a quality approximation of income for an entire economy in a given period.

Per capita GDP is calculated by dividing total GDP by a country's 澳洲幸运5开奖号码历史查询:population, and this figure is frequently cited when assessing the standard of living. There are a number of adjustments to GDP used 🃏by economists to improve the explanatory power of the statistic, and economists have also developed aꦛ number of alternative metrics to measure the standard of living.

Application and Shortcomings

While the 澳洲幸运5开奖号码历史查询:standard of living is a complex topic with no universally objective measurement, rising global income since the 澳洲幸运5开奖号码历史查询:Industrial Revolution has undeniably been accompanied by global poverty reduction, improved 澳洲幸运5开奖号码历史查询:life expectancy, increased investment in technology development, and a high material s🍌tandard of living in general.

GDP is divided by population to determine personal income, adjusted for inflation with real GDP, and adjusted for 澳洲幸运5开奖号码历史查询:purchasing power parity to control 📖for the impacts of regional price disparities. Real per capita GDP adjusted for purchasing power paꦍrity is a heavily refined statistic used to measure true income, which is an important element of well-being.

Real GDP, which measur🍷es economic growth minus the impact of inflation, is seeꦯn as a more accurate representation of economic growth than nominal GDP.

The Human Development Index

Many economists and academics have observed that income is not the only determinant of well-being, so other metrics have been proposed to measure the standard of living. The Human Development Index (HDI) was developed by economists in association with the United Nations Development Programme, and this metric includes measurements of life expectancy and education in addition to per capita income.

The index uses 澳洲幸运5开奖号码历史查询:gross national income (GNI) per capita as a direct input in the official calculation of HDI but for countries that do not have that figure, GDP per capita is used as a substitute. There are also adjustments to HDI that account for such variables as 澳洲幸运5开奖号码历史查询:income inequality.