Measures of economic activity and wellbeing

• gross domestic product (GDP)

  the total value of all final goods and services produced in a country regardless of who owns the factors of production
• GDP per capita


  GDP per person in the population; measures quantity of output produced in a country on average per person in the population
• nominal GDP

  GDP measured at current prices
• real GDP


  GDP measured at constant prices; eliminates the effect of price changes; must be used to make valid comparisons over time
• Measures of economic activity

  • Gross domestic product (GDP)
  • Gross national income (GNI)
  • GDP per capita
  • GNI per capita
  • Nominal GDP
  • Nominal GNI
  • Real GDP
  • Real GNI
  • GDP per capita ($PPP)
  • GNI per capita ($PPP)
• Gross domestic product (GDP)

  The total value of all final goods and services produced in a country regardless who owns the factors of production
• Gross national income (GNI)

  The total income received by the residents of a country, equal to the value of all goods and services produced by the factors of production owned by the country’s residents regardless where the factors are located
• GDP per capita


  GDP per person in the population; measures quantity of output produced in a country on average per person in the population
• GNI per capita


  GNI per person in the population; measures income in a country on average per person in the population; this is a better measure of standards of living than GDP per capita
• Nominal GDP


  GDP measured at current prices
• Nominal GNI


  GNI measured at current prices
• Real GDP


  GDP measured at constant prices; eliminates the effect of price changes; must be used to make valid comparisons over time
• Real GNI


  GNI measured at constant prices; eliminates the effect of price changes; must be used to make valid comparisons over time
• GDP per capita ($PPP)


  GDP per person converted into US$ by use of exchange rates that eliminate the influence of price difference across countries; must be used to make valid comparisons across countries
• GNI per capita ($PPP)


  GNI per person converted into US$ by use of exchange rates that eliminate the influence of price difference across countries; must be used to make valid comparisons across countries
• GNI = GDP + income from abroad − income sent abroad
• Measures of well-being

  • OECD Better Life Index
  • Happiness Index
  • Happy Planet Index
• OECD Better Life Index


  Measures economic well-being in a number of dimensions; these measure quality of life as well as material conditions of life (such as income)
• Happiness Index


  Measures economic well-being using numerous quality of life dimensions in addition to real GDP per capita; it attempts to measure the happiness of populations based on their perceptions of their satisfaction with their lives
• Happy Planet Index


  Takes into account perceptions of the population on their well-being, environmental sustainability and inequalities
• Measures of economic development and well-being

  • Human Development Index
  • Inequality-adjusted Human Development Index
  • Gender Inequality Index
• Human Development Index

  A composite indicator which includes indicators that measure three dimensions of development: income per capita, levels of health and educational attainment; it is considered to be a better indicator of development than single indicators such as GNI per capita
• Inequality-adjusted Human Development Index


  A composite indicator which measures human development in the same three dimensions as the Human Development Index, but each dimension is adjusted for inequality in the corresponding dimension; it attempts to measure losses in human development that arise from inequality
• Gender Inequality Index


  A composite indicator which measures inequalities between the genders in three dimensions: reproductive health, empowerment and labour market participation
• Measures of income and wealth distribution

  • Per cent of income received by quintiles of the population
  • Lorenz curve
  • Gini coefficient
• Per cent of income received by quintiles of the population


  Shows the percent of income that is received by each fifth (quintile) of the population from the richest fifth to the poorest fifth
• Lorenz curve


  A curve illustrating the degree of equality (or inequality) of income (or wealth) distribution in an economy; it plots the cumulative percentage of income received by cumulative shares of the population
• Gini coefficient


  A summary measure of the information contained in the Lorenz curve of an economy, defined as the area between the diagonal and the Lorenz curve, divided by the entire area under the diagonal; the Gini coefficient has a value between 0 and 1; the larger the Gini coefficient, and the closer it is to 1, the greater is the income inequality
• Measures of poverty


  • National and international poverty lines
  • Minimum income standards
  • Multidimensional Poverty Index
• National and international poverty lines

  An income level that is just enough to ensure a family the minimum necessary food, housing, clothing, medical needs; it is set by national or international authorities
• Minimum income standards


  A method to measure poverty consisting of ongoing research on what people in a population believe are the essentials for a minimum acceptable standard of living that allows people to participate in society
• Multidimensional Poverty Index


  A composite indicator that measures poverty in three dimensions: health, education and living standards; each of these reflects deprivations (essential things people don’t have)