Gdp Per Capita As An Indicator Of Standard Of Living

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GDP per Capita As an indicator of standard of living GDP per capita is the market value of the final goods and services produced in a country during a given period per person (McDowell et al. 2012). This could also be explained as a measure of quantity of goods and services available to a typical resident of the country at a particular period. GDP per capita is used as an indicator of standard of living because it reflects the accessibility of goods and services to a person. GPD counts only the goods and services that have “market value” but they are just one of the measures of standard of living. There are many other factors that affects standard of living and do not contribute to GDP, e.g. environmental quality and leisure time (McDowell et al. 2012). China has been facing serious ecological problem (e.g. water and air quality) while its economic grows. Nonetheless, environmental quality cannot be bought or sold in the market, the issue is not demonstrated in China’s GDP. Other than that, leisure time available to a person can affect his standard of living. The person is better off if he can enjoy more leisure activity. But leisure time is not priced in market, and it does not give a rise in GDP. Another problem of using GDP per capita is that it neglects purchasing power. Table 1 Real GDP per capita at 2013 (US$) Real GDP per capita based on PPP (US$) China 3583 11524 Japan 37573 35614 Japan : China 10.4 3.0 (The World Bank, 2015) Table 1 shows that real GDP per capita
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