A prosperity indicator is a measure of the prosperity of a country or area.
Which standards are suitable for measuring the prosperity of a country, people or area is controversial.
gross domestic product
The gross domestic product (GDP) or its growth is very often used as a benchmark to compare the prosperity of different countries and areas. GDP measures the total value of all goods, goods and services that were completed within the boundaries of an economy in one year.
The use of GDP as an indicator of prosperity has drawn criticism for a number of reasons. It is often criticized that the GDP does not distinguish whether money is spent on meaningful or meaningless. Exploitation of the environment , wasteful use of money and natural resources, numerous accidents, etc. can increase GDP and appear in the statistics as an alleged increase in prosperity.
In addition, the shadow economy / undeclared work , subsistence economy , bartering, etc. are mostly not included in GDP. In developing countries in particular, however, these can make up a substantial part of the economy and represent the basis of life for a large number of the poor.
Gross National Income
The gross national income (also known as gross national product, GNP) describes the total income that was achieved by the population of a country or area in a certain period of time. However, the GNP says nothing about the sometimes very unequal distribution of wealth or income in a society.
The use of gross national income as an indicator of prosperity is problematic and unrealistic for several reasons. In the national product, only those productions are recorded that run through the markets, i.e. are market-oriented. With a few exceptions, which are insignificant in terms of amount, non-market-oriented productions are not recorded in the national product, although they affect welfare. This concerns in particular the private households with z. B. Housework, raising children and home improvement. The national product is shown too high because more goods are involved in production than are taken into account in the national product assessment (e.g. use of the environment). The services produced by the state are not recorded as intermediate consumption but are treated as state consumption. This also leads to gross national income that is reported too high. Strictly speaking, these services would have to be taken into account as advance payments, since they are what enable the entrepreneurs to produce.
Income per capita
Another value used as an indicator of prosperity is per capita income . This results from the national income divided by the population and reflects the income that an individual person earns on average in a certain period of time.
Per capita income is also only suitable to a limited extent for measuring prosperity. For international comparisons, the per capita income must be converted into a single currency , for which the US dollar is often used. However, the different purchasing power of different currencies is insufficiently taken into account. One tries to remedy this deficiency by converting it into purchasing power parities .
Other weaknesses in per capita income correspond to those in GNP .
If there are unequal measures of distribution for gross domestic product, gross national income or national income , one can derive measures of equal distribution from them. A measure of uniform distribution is 1 (or 100%) minus the measure of uneven distribution. Multiplying the gross domestic product, the gross national income or the national income by such a measure of equal distribution results in a welfare function as described by Amartya Sen and James E. Foster in On Economic Inequality . From this, in turn, a per capita welfare function can be determined, which can be used as an alternative to the median .
Human Development Index
The Human Development Index (HDI abbreviation of English Human Development Index ) is an attempt to measure the wealth of a country or territory on the basis of broader criteria. In addition to GDP per capita, expressed in purchasing power parity, life expectancy and level of education are also taken into account.
Sustainable Economic Wealth Index
The Index of Sustainable Economic Welfare (ISEW abbreviation, Index of Sustainable Economic Welfare ) takes into account factors such as income distribution, unpaid housework, public spending on health care, education, environmental pollution, resource consumption and the costs of climate change in addition to GDP. The ISEW has been further developed into the Genuine Progress Indicator (GPI).
Other indicators of prosperity
- The Theil index (a measure of entropy), the Gini coefficient (an evaluation of the Lorenz curve ) and the Hoover unequal distribution are measures for the inequality of income distribution and wealth distribution .
- Based on Engel's law - which states that the proportion of expenditure on food falls with increasing income - the Engel coefficient indicates the proportion of income that is spent on food. A low Engel coefficient (low share of food expenditure) indicates high prosperity. This prosperity indicator has the advantage that it takes the local price level into account.
- The Economic Diversification Index measures the economic strength of a country based on the share of industry in GDP, the number of people employed in industry, electricity consumption per capita and the export orientation of the economy.
- The Big Mac Index shows the average time it takes to work in a country or city to buy a Big Mac.
- For developing countries in particular, the food energy available per capita is also used as an indicator of prosperity.
- The Genuine Progress Indicator links GDP growth to environmental factors and social inequalities. It has been negative for many industrialized countries over the past few decades.
- Happy Planet Index (HPI), a measure of the ecological efficiency of the generation of satisfaction taking into account life satisfaction, life expectancy and ecological footprint
- In January 2008, French President Nicolas Sarkozy set up the Stiglitz Commission to identify innovative measurement criteria for growth and well-being by 2009. In addition to the two Nobel Prize winners Joseph Stiglitz and Amartya Sen, other international experts are involved, including the German Heiner Flassbeck .
- The Enquete Commission Growth, Prosperity, Quality of Life - Paths to Sustainable Business and Social Progress in the Social Market Economy of the 17th German Bundestag was constituted on January 17, 2011. The commission proposes a set of ten variables called W3 indicators which, in addition to “material prosperity”, also take into account the dimensions “social / participation” and “ecology”. On June 6, 2013, the Bundestag debated the report.
- List of countries by gross domestic product
- List of countries by gross domestic product per capita
- List of countries according to income distribution
- ↑ GNI regulation of the EC ( Memento of the original of November 13, 2010 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. published by the Federal Statistical Office, as of November 16, 2005
- ↑ Sarkozy is looking for happiness NZZ-online, January 12, 2008
- ↑ Véronique Le Billon: La commission Stiglitz sera très internationale Les echoes.fr, February 20, 2008
- ↑ Final report of the study commission , Bundestag printed matter 17/13300 (PDF, 21.1 MB)