Search

If rising GDP raises levels of anxiety, should we deduct psychological costs to obtain the true value of GDP?

Abbreviated Question: 
If rising GDP raises levels of anxiety, should we deduct psychological costs to obtain the true value of GDP?
Answer: 

Thanks for your very interesting question. GDP measures the market value of production. It is not intended to be a measure of aggregate well-being but it is often used as such. Economists generally recognize that GDP is an imperfect indicator of well-being, or happiness, and there are serious efforts underway, by international institutions, such as the OECD, and governments, such as the government of France, to devise better measures of well-being that go beyond GDP. The recent Nobel prize winner, Angus Deaton, is famous for his research on growth and happiness.