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Beyond GDP: A Welfare-Based Estimate of Growth for 14 European Countries and the USA Over Past Decades

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  • Jean-Marc Germain

Abstract

[eng] Measurements and perceptions of growth are often contrasting and, indeed, GDP growth does not necessarily imply an economic improvement that is felt by the population. In order to quantify this difference, we are developing an indicator of monetary well‑being called “Real Feel GDP”, which measures, in a money metric, the national average contribution of income to life satisfaction. It offers a retrospective view that is very different from that measured by GDP. For example, in the United States, Real Feel GDP stagnated between 1978 and 2020, while GDP tripled. The gap between Europe and the United States has widened in terms of GDP per capita, but it has narrowed in terms of Real Feel GDP per capita, with countries such as Denmark, Sweden, Finland and France even overtaking the United States. We also see that economic crises last much longer as measured by Real Feel GDP growth, up to a decade, compared to one or two years with the conventional measurement of growth.

Suggested Citation

  • Jean-Marc Germain, 2023. "Beyond GDP: A Welfare-Based Estimate of Growth for 14 European Countries and the USA Over Past Decades," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 539, pages 3-25.
    • Handle: RePEc:nse:ecosta:ecostat_2023_539_1
    DOI: https://doi.org/10.24187/ecostat.2023.539.2095
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    References listed on IDEAS

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    4. Marc Fleurbaey, 2009. "Beyond GDP: The Quest for a Measure of Social Welfare," Journal of Economic Literature, American Economic Association, vol. 47(4), pages 1029-1075, December.
    5. Gandelman, Néstor & Hernández-Murillo, Rubén, 2013. "What do happiness and health satisfaction data tell us about relative risk aversion?," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 301-312.
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