Real GDP Per Capita and the Standard of Living
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- เผยแพร่เมื่อ 30 ก.ย. 2024
- 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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thumbs up because he took the time to point out the negatives
Just one negative though
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.
It's his job !!! ,
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?
Poorly.
it's so refreshing how slowly he speaks compared to most people doig econ videos. it's almost like he doesn't make me want to jump out a window.
one cannot explain the concept better than this. You guys are doing a great great job !
Economists graph everything, even happiness. Where is the love graph
Lool
how would you measure it?
3:56
How are Americans happy? Lol
good health, happiness can be accomplished through money but love isn't.
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!
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
Where are you getting that data? If it is from the Nigerian government, it is obviously biased.
@@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.
@@notanoob3920 REAL gdp would take inflation into account
Some prince in Nigeria still owes me a million dollars plus the one thousands dollars I sent him through Western Union. 10 years later I still didn't get my one million dollars!
You're such an idiot, greedy fool. Besides, aint you homeless?
Nigeria is poor shitty country.. There are
No rich prince
@@type2unsetdiabeetus33 LMAO you must be a dumbass .
uzoma ihebom your lack of grey matter is astonishing
I know this is just a joke but my dad legit got over a million dollars stolen from him...by not a prince, but the nigerian government itself...12 years on my side...
Median GDP per capita is much more useful. (Edit: I meant median income, which is how most people probably interpreted it =P)
This
That is indeed true, the median ignores the effect of the super-rich, while the mean includes the super-rich and thus overestimates the income received by the average citizen.
Exactly.
There is no such thing as median GDP per capita. When you calculate GDP you get a single number. When you get population, you get a single number. So for a given geographic area you get a single number. Probably you want something like median household income. Median personal income gets messed up in that in a lot of countries the median person would be a child with no income. But maybe median personal income of working age adults.
This is true. Median household income would be the statistic we are looking for.
loved the simplicity of your presentation. An average person can understand it. I am a CFP and I had difficulty in explaining as simple as this to my clients, as simple as what you just did , thanks
you are best sir
I really enjoyed this video, since I understood complicated terms in a short span of time!
today i watched your videos and now, I think I have no need to take classes in school.
Thanks for making such videos.
These videos are very good for people whose English is 2nd language. I really appreciate slow and very understandable speaking.
anybody else here for school?
Every African nation needs to show this to their people
more useful than my econ teacher, thx a lot
Thank you, my macro economics course starts soon and I understand the concepts well thanks to these videos.
Ok now go to Saudi Arabia, the GDP per Capita is good, everything else including human rights are almost non existent
Hey increase in real GDP per capita is calculating economy as whole (generalisation) but in reality low per capita for poor and high for rich
Rich people becoming more rich faster but poor people are become slowly to middle class and some are be poor always
Your videos are really good. Educational, keep doing the good work and also start making country-specific videos as well.
Thank you for your comment! We have some country-specific playlists.
India: th-cam.com/play/PL-uRhZ_p-BM6qwTvoo09a3ZB2WuZNQtr8.html
China: th-cam.com/play/PL-uRhZ_p-BM4vSTK6gU6sLqA7lPDbZIe5.html
and more
You can see these on our channel page.
-Roman
You can't put a number on happiness, and the fact the he claims you can proves that he is indeed a souless economist!
So then to increase the accuracy we should change to gdp per majority capita and exclude the top 5 percenters
Income doesn't mean ability to buy things when inflation goes up as well
1:52 people who live in that little blue ball at the right side are the people that tell you money doesn't make you happy.
Ask yourselves :
1. GDP can be faked or impossible to be faked?
2. IMF does not know which country faked the gdp because IMF cannot audit.
3. So, do you wonder what is the accuracy of world GDP forecasts by IMF?
4. Have you ever wondered why IMF play along with this numbers game?
Come on dude; we are just here to learn! Don't poison people with your conspiracies!!
Excelent video extremely clarifying tumbs up👍
Everything's going alright with your videos.👍👍
As for economic growth, Joseph Stiglitz has come closest to the answer: impose high taxes on rent-derived income flows and gains on asset sales. At the same time reduce or eliminate the taxation of earned income, real capital goods and on commerce. Stiglitz has reminded us of the analysis provided over a century ago by Henry George. We should have listened to Henry George then, and his insights are in my view as important today.
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...
Materialistic things surely matter in the standard of living in a country, but do you know what's better than materialistic things? Knowledge.
lol
+Levi “When will we want wantons” Quickburger5000
lmaoo " fun to drive my lambo up in the Hollywood hills "
+Tim Little 12 hours.
12hours after
naaawwwledge
The graphs were lacking axis information and units.
brilliantly explained...
I'm so happy these videos exist. My textbook is amazing and designed for self-studying but it really skimmed that part about how GDA = higher standards of living. It stated it but didn't attempt any convincing of it. Maybe more convincing would be available in later lessons, Idk. What I know for sure, however, is that now I can finally pass the lesson I got stuck in with a light and a satisfied heart.
Thank you Mr. Alex for this enlightening video. Thank you very very very and very much!!
YOUR VIDEOS SAVE MY LIFE. GHAD WHY DO WE NEED SCHOOL ANYWAYS? AHAHAH THANK YOU FOR MAKING THESE!
y'all are awesome! I use your videos EVERYDAY in my classes.
I love these videos! very informative and well-produced!
great
Hi, average Joe here. Is it possible to derive with a more objective value of "GDP per Capita" by correlating it with an added variable called "Distribution of Wealth index"? Performing the most logically suitable math operation between both of 2 values will result in a more objective "GDP per Citizen" value - which is more useful for an average Joe. What did i miss, or maybe reinvented an already existing thing? I know there exists 2 more values of buying power, one is correlated with outside market, and one with inland market. These values are also pretty telling about the standards of living, though are a bit tricky to understand.
These correlations are interesting - I wasn't aware of them.
I would have liked more detailed references (just written on the graphs, as they are partially in the video), and also to make explicit that correlation doesn't entail causation - it's an elementary point, but this is an introductory video.
Thanks
An intresting ratio would be to relate the wage of basic needs per real GDP per capital. For example basic needs would be:
- Food
- Health
- Home (if we consider that buying a home is not a basic need, than we could consider average rent price)
- education
- clothes
- transportation
- energy
- day today general consumption (for example school furnitures..)
- going to vacation one time a year (even if it's very difficult to evaluate, it's still a basic need in my opinion).
It would be intresting to evaluate our standards of leaving per country and per decades. What do you think ?
Wonderful video highlighting both strengths and limitations of using Real GDP per capita to measure a country's standard of living. Clear explanation of concepts
Information of states and territories of the united states by GDP . The real gross domestic product (GDP) of the United States 1997 - 2018.
click to know more- randstatestats.org/us/stats/gross-domestic-product-(gdp)-by-state.html
There ain't any channel in the youtube that can explain the economics as interesting as you do.Thanks for all your quality videos.👍
Nicely explained.
you are great .the way you explain is very nice . keep doing this and thank you for this knowledge .
Economists’ toolkit needs some expansion. Too GDP focused. Typically when an economist talks about distribution it’s only fleeting before they say “don’t worry, increasing GDP helps everyone”. Meanwhile, the degree in which it improves the lives of the poor has been decreasing. Economists are like broken records.
I found traditional education so boring but your videos are easy to watch. The new generation grows up with TikTok. If those capitalists are going to exploit us with social media traps, they better be willing to find some new education methods as well!
Watch this video in 1.25 speed :/
Why would anyone do that??
It would have been interesting to have the correlation of real GDP against Inequality-adjusted Human Development Index
You make fantastic videos, I'm glued to your channel. Can you make videos on Yeild curves, Futures market and derivatives market...??? Thank you 🙏
Make higher education accessible to everyone and everywhere. Promote vocational programs through apprenticeship. Incentivize people to exercise and study/read more. Promote arts like music and dance.
great video !
If you were comparing USA to Mexico, what can overstate US GDP to Mexico's GDP in comparison to standard of living?
a. Government spending is a lot higher in the states
b. A lot more non-market activities in Mexico
c. mexico spend a lot more money on leisure items
d. all of the above
Thank You Sir
I will disagree with you over here. GDP is a materialistic approach. If people living in a small village A use car for travelling and people living in village B use bicycle for travelling, then we will see that village A will have more GDP per capita because of car, its maintenance workshop, more health issues with people A etc. On the other hand, people living in village B will have less GDP but a happy, healthier and more satisfying life. Village B people will have time to spend for themselves while people A will have less time for themselves. We can prove this by looking at the suicide rate/100k of countries. All countries with higher GDP per capita have more suicide rate/100k. Higher GDP per capita ensures rich life but not a happy and satisfying life.
Great video (series), easy to understand and enjoyable to watch. Keep up the good work.
Per capita GDP PPP is the best measure actually?
If I get only real $2 per day, but that allows me to buy goods equivalent to what I could buy with $200 /day in USA, then $2 /day would not be bad.
definitely thumbs up.... no politics involved.... unlike some lib. garbage videos continuing to bash our President...
in India the average cost per person lives is $35-55 dollars a day, is because a person can afford almost anything with that, and with much much better services, Uber, Dominos, Stay at a Raddison anything u can possibly think of.
While I have been staying in a western country where you need alest 200 dollars to barely make ends meet,
A question I was making myself today was, if a country is underdeveloped in terms of infrastucture and technology, yet everyone, or the majority of people have access to food, water and a shelter, would that country still be considered rich? As oppose to a country that is technologically developed yet the average citizen barily gets their needs met, example having 1 meal per day and having to share a shelter with serveral people.
Real problem of GDP is that it's the measure of production of goods and services in a nation not the utilization of the same. Example, the infrastructure projects in China. Moreover, it doesn't account the informal economy in developing markets.
My question would be: I understand the correlation, but how was causation established? I.e. Does a higher GDP create happier ppl, OR do happier ppl create a better GDP?
The higher GDP is the more money government can print without inflation. There’s a direct relationship between money supply and GDP. The more the better. Productivity makes a country rich, not money.
It's a good enough measure, but we need to tweak it for rent and healthcare and energy. Building built in the 1920 now commend a higher rent without really adding extra space or amenities, Healthcare is worse but way more expensive and finally energy you light up the same light bulb but you pay much more. When tweaked, we can see that the number is negative actually. That can explain why there is much more homelessness, more tent cities (non existent in the 50's), why 45 millions leave on food stamps, why full time employees live on their cars etc...
And the elephant in the room war and tax machine.
My country has a GDP per capita of 14k but the minimum wage is 122$ per month or around 1k per year with a 12% rate of unemployment. So, I don't think its that useful.
that is because of corruption and injustice by governments, I come from India were there is lot of Injustice and fake laws, rapid growth in technology, overpopulation and unstable jobs where here also it is the same like Pakistan or Nigeria, we are big internet users and many people brag of how great India is, so many westerner think we are a great country, the economy is big but GDP per capita is poor, many of my friends from Australia who found a way to immigrate from India and have a much better lifestyle there tell me the same "India's doing very good mate" I ask them why did you go away come back and live India lol.......
The idea that real GDP is the best measure of standard of living - I despair. Economic growth does raise life expectancy, but only to a point. If you live in relative poverty of course your life expectancy will be lower. But once you reach a certain point, essentially where you have a good diet, good healthcare (questionable in the US for many), clean water etc., then further increases in life expectancy don’t happen. So the relationship levels off and then starts to drop as it is in many western countries due to the rise in obesity related illnesses. The relationship with happiness is a bit more complicated. Again, happiness rises with rising GDP until you have enough, but there’s an additional effect on happiness, you can feel happier if you have more than your peers. This relates to our competitive approach to things which is conditioned. Of course there’s a problem with this , we can’t all be better off than our neighbour so we can’t all feel better because we’re doing better. and, as I’ve said in other videos, where you’re born more than anything else dictate where you’ll end up in terms of financial wealth. Born poor and you’ll almost certainly stay poor and, well, less happy.
At least he does mention the problem of inequality, but then goes on to say that as GDP per capita increase so the wellbeing of the poor in the country in question increases. Just look at what is happening in the US and draw your own conclusions. Rising poverty, poor healthcare for the poor, homelessness, in-work poverty, huge inequality and so on. This assertion is just wrong!
Awesome videos
I like this videos. They assist in trying to understand how factors of macroeconomics works. I appreciate. I would like you to talk about how debt accumulation affects economic growth. Or refer the videos to me.
you are doing just awesome.
The number of people who drowned by falling into a swimming pool in the U.S. correlates with the number of films Nicolas Cage has appeared in. Correlation is not causation. Real GDP per capita in America is so screwed by the extreme outliers on the top that it paints a picture far different from reality. Simply saying that it is an "imperfect" measure does not do justice here. It is incredibly misleading and irresponsible to spread the message that real GDP per capita is the "best" measure for standard of living. Statistics on median income and wealth distribution serve far better answering this question.
really good information and way of presenting it
keep up the good work and make more nice videos like this
Sorry if this is not the video that I am referring to. I have have wathced 3 or 4. They are good as they make it reasonabley easy to learn the subject.
An improvement...
... If words like 'typically' are not relevant then please don't use them.
In one of the videos (if not this one) you said 'If a good is not bought and sold in a market then it is not 'typically' included in GDP. I was distracted by wondering if 'typically' was it a necessary word a filler word as a pattern of your way of speaking?
I thus found it hard to listen to the rest of what you were saying. If you did cover the 'un'typical I missed it and am not sure which video it was without watching the whole of each again.
Othwerwise, great videos!
This is the best explanation one can ask for , very educative ,basic , without complications and on point . Thank you
It is because idea of earning more money equalized happiness. This is bullshit. Measurement of happiness is being rationalized by monetary value. But is that really true? It is a deception.
Sir your videos are great I have learned alot. But how it is possible to distribute the wealth and standards of living If the real GDP itself calculated based on the bourgeoisie produced commodities and its market prices. But calculating with the proletariat population. All wealth goes to few owners not to all. That's why this variation.
Thank you for clear explanation. It is amazingly helpful for me to study economic by myself.
GDP is nothing to do with the income level. YOu are confused. GDP per capital is average production amount, not the average income.
That is the best way to allocated earning. If so much unemployed because of automation so the only way to go beyond the common mortal dream so any one get jobs get extra pay while the unemploy get GDP percapita and increase in automation to increase productivity and increase GDP per capita so it let people advance scicence
Its totally.. wrong
Concept
It's mean Japan is much more happy than tibitians
It mean Japanese business are more happy than tibitian monk
But.. Suicide and depression is more in Japan
man, you are a blessing to society. thank you so much for the video. one thing that i never quite understand is the term "economy health". how exactly do you determine the health of the economy, what is the parameters?
if a guy like me was to want to own my own business but wasn't sure if I can get my own contactor 's license if I can understand their questions in their test if I could pass them test I would give them state over half of my earnings as I worked I could help by giving people jobs who really wanted to work get a real pay check
The only thing this video is missing in my opinion is that your access to “spiritual” goods is increased by real GDP too. You have access to more of the arts, better education, and more money to spend on yoga classes or ritual paraphernalia, as well as more people with shoes on their feet.
puro ganar puro ganar con ysua. JC verdadero. dios. d evil. death. will flee. from. ysua. JC. forever
You should've compared developed countries and developing countries separately...
i want to see a woman who wants to go out to party walk to it instead of being driven. imagine the party is in a night club a couple of km away. now how happy will she be if she has heels and have to walk or wait for public transport which is unreliable. Assets gets things done, assets saves time, assets opens doors and when those things are accomplished that is what makes us happy.
Is it related GDP in a country with its prosperity?
Indonesia has high GDP but It was the same with Nigeria. I wonder why it is still plenty of poor people in Indonesia and little bit the rich people.
When these videos go to emerging markets or communist countries it just throws me off, their circumstances are totally different, even if they started to manage to grow they will get hit by civil war and sanctions.
Thank you for sharing this. I like it overall as it is filled with many insights. But where it is filled with lies, I think you would be the better person to point them out
i say economists should be more 'material' ....dialectically material, maybe historically material?
You guys are great, thanks for the videos!!!!
Thanks for watching Camilo!
-Roman
How about the Nominal GDP Per Capita?
@4:00, a layman's question, why are we plotting the data on a logarithmic scale?🤔
British people live longer than Germans but their gdp per capita is less than Germany......
Davis Jennifer Clark Elizabeth Taylor Laura
dude u are dope. i understood better than the goddamed text book. out of 5 -stars i would rate u at 4,5 stars. please find simplier graphs
You could improve by making sure you don't look like you reading the script as your speaking
I feel so unfortunate to watching these videos after these many years, supposed to be listened few years ago atleast.
Thank you ,sir.I love all your videos.please carry on for us.Your university has taken a giant step to spread free education among all the people and you are doing a great job.So thank you once again.
As of 2016 66% of the honduran population lives with less than $2 a day.
I would like to understand the measure of happiness? And its relationship to gdp per capita