Real GDP Per Capita and the Standard of Living

They say what matters most in life are the things money can’t buy.
So far, we’ve been paying attention to a figure that’s intimately linked to the things money can buy. That figure is GDP, both nominal, and real. But before you write off GDP as strictly a measure of wealth, here’s something to think about.
Increases in real GDP per capita also correlate to improvements in those things money can’t buy.
Health. Happiness. Education.
What this means is, as real GDP per capita rises, a country also tends to get related benefits.
As the figure increases, people’s longevity tends to march upward along with it. Citizens tend to be better educated. Over time, growth in real GDP per capita also correlates to an increase in income for the country’s poorest citizens.
But before you think of GDP per capita as a panacea for measuring human progress, here’s a caveat.
GDP per capita, while useful, is not a perfect measure.
For example: GDP per capita is roughly the same in Nigeria, Pakistan, and Honduras. As such, you might think the three countries have about the same standard of living.
But, a much larger portion of Nigeria's population lives on less than $2/day than the other two countries.
This isn’t a question of income, but of income distribution-a matter GDP per capita can’t fully address.
In a way, real GDP per capita is like a thermometer reading-it gives a quick look at temperature, but it doesn’t tell us everything.
It’s far from the end-all, be-all of measuring our state of well-being. Still, it’s worth understanding how GDP per capita correlates to many of the other things we care about: our health, our happiness, and our education.
So join us in this video, as we work to understand how GDP per capita helps us measure a country’s standard of living. As we said: it's not a perfect measure, but it is a useful one.
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[@derekofbaltimore]

thumbs up because he took the time to point out the negatives

[@sirturnables]

Just one negative though

[@JCloyd-ys1fm]

Derek McGowan Another shortcoming of GDP is that it doesn’t recognize the value of caregiving. If someone is taking care of a child, that isn’t considered valuable and isn’t measured by GDP. That’s problematic.

[@IMdAbdulquadirKhan]

It's his job !!! ,

[@theamazingautist2363]

J. Cloyd Isn’t it inevitably accounted for if we assume that the behaviour of care-givers affects the behaviour of other people? Other people (e.g. the breadwinner of a family) are only choosing to behave as they do economically because somebody else is acting as care-giver. If someone else was not acting as care-giver, they would have to dedicate less time to activities that are measured by GDP so as to take on care-giving duties themselves. The difference between the GDP contributed by a person who is working full time and the GDP contributed by that same person if they took on care-taking duties IS the effect of a care-giver’s work on GDP, no?

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Poorly.

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[@nik4546]

In this video - which was made in 2015 - you stated that Nigeria had 80% of its population living on less than 2 dollars a day, which was unforunately correct. Today, only 5 years later, that number is around 43%, which means that it's down almost 50% of what it was! In just 5 years, that's an incredible progress! Thansk for the video, awesome!

[@notanoob3920]

yes We can see Progress There Clearly but It is because of Inflation Also Cause we are Talking About 2$/day So we measure Conditions in all perspectives also

[@mirzaahmed6589]

Where are you getting that data? If it is from the Nigerian government, it is obviously biased.

[@jaybee4577]

@@mirzaahmed6589 the Nigerian government doesn’t produce data but NBC does. It a non government organization. Nigeria poverty have decreased but the population have also grown a lot.

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@@notanoob3920 REAL gdp would take inflation into account

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[@GlendaPeru]

well there is one more thing: as you said GDP can reflect how happy we are, if we compare how much more can we afford, and this will show, how much better the economy is. And sure, consumerism is what thrives the economy. But we are in a different status quo now... the more we spend, the more we produce, the more market competition... deteriorates our planet more and more. This is an "older" video... I am looking forward to see more videos and if the environment issue can fit (could be added) into an equation. Thank you, awesome videos, well explained! I am working on my thesis for my master studies and GDP is a big part of it...

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Thank you for your comment! We have some country-specific playlists. India: kzbin.info/aero/PL-uRhZ_p-BM6qwTvoo09a3ZB2WuZNQtr8 China: kzbin.info/aero/PL-uRhZ_p-BM4vSTK6gU6sLqA7lPDbZIe5 and more You can see these on our channel page. -Roman

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