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Does GDP measure our happiness?

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  1. Introduction
  2. Market analysis
    1. Key figures
    2. Major facts
    3. Major trends
    4. Main players
    5. Distribution
    6. Competition
  3. Current status of Tassimo
    1. An Analysis of the characteristics of Tassimo, compared to its competitors
    2. Match between consumer expectations and the characteristics of Tassimo
    3. Matrix Wear
    4. SWOT Analysis
  4. Conclusion

In February 2008, the French president, Nicolas Sarkozy asked Mrs. Joseph Stiglitz, Amartya Sen (both Nobel laureates) and Jean-Paul Fitoussi, to determine the limits of GDP as an indicator of economic performance and social progress in order to achieve more relevant indicators and to include the extent of well-being and happiness in a committee discussion on "Performance Measurement economic and social progress ".

The concept of Gross Domestic Product or GDP was developed in the United States in 1932 during the Great Depression, at the request of Congress who wanted to develop a composite indicator of national economic activity to guide the choice of policy guidelines and measuring the effects of the policy adopted.

Thus, after the Second World War, GDP became the major instrument for measuring economic activity under the influence of neo-Keynesians. Initially stationed in the United States, it was then universalized under the UN umbrella.

GDP measures the level of production of a country, and therefore allows it to evaluate and compare its economic performance. To summarize, it can be defined as the sum of value added producers residing in the country. Happiness, meanwhile, goes beyond the economic sphere, and cannot be defined as a sustainable state of fullness, complete satisfaction, or suffering, when anxiety disorders are absent.

Happiness is therefore akin to a state of well-being. One might wonder whether the GDP indicator, which is purely economic, will be able to take into account the elements necessary for measuring the happiness and well-being of societies.

Before setting out the limits of GDP as far as happiness and well-being is concerned, it is useful to recall how this indicator is because it is indeed the way it is defined as a very suitable indicator to measure the happiness and well-being.

GDP is composed of two parts: the market value of all goods and services that are sold in a country for a year and the cost of producing non-market services of general, government (public education, local communities, state service ).

Growth, in turn, corresponds to the GDP growth that is to say the increase in the volume of all production of goods and services that are sold, or cost monetarily, produced by paid work.

This way of measuring wealth will have two consequences, which are the main limitations of GDP: GDP will first take into account the adverse well-being and finally it is not interested in activities that otherwise promote the well-being.

The method of calculating GDP as has been mentioned will do that which is counted as wealth creation of harmful elements that degrade the well-being.
Indeed, all that can be sold, and has a monetary value will inflate the GDP and growth, regardless of the degradation of well-being. Not taking into account that data on economic output, GDP tends to see the same way the positive and negative elements in society as they contribute to increase the wealth created and thus improve the economic health of a country.

The approach traditionally used by economists to measure human well-being is only focused on the resources available to each, which are usually estimated in terms of monetary income, assets or consumption of goods and services.

Tags: Use of GDP to measure happiness; GDP as an indicator of economic performance; performance measurement -economic and social progress

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