Gross domestic product (GDP) measures the total output of the economy as a whole by adding total consumption, investment, government spending and net exports. Therefore, GDP is an approximation of the income for the whole economy in a given period.
GDP per capita is calculated by dividing the total GDP by the population, and this figure is often cited in assessing the quality of life. There are a number of adjustments of GDP is used by economists to enhance the information content of statistics and economists have developed a number of alternative indicators to measure quality of life.
Application and disadvantages
And the standard of living is a complex topic, no universal objective measurement, the growth of global incomes since the industrial revolution, of course, was accompanied by poverty reduction, increased life expectancy, increased investment in technology development and a high material standard of living in General.
GDP divided by the population to determine personal income, adjusted for inflation, real GDP, adjusted for purchasing power parity to monitor the impact of regional differences in prices. Real GDP per capita adjusted for purchasing power parity is a highly refined statistics used to measure true income, which is an important element of well-being.
Many economists and scientists have noted that income is not the only determinant of well-being, and other indicators were proposed to measure the standard of living. The index of human development (HDI) was developed by economists in conjunction with the development programme of the United Nations, and this metric includes the measurement of life expectancy and education, in addition to per capita income. Prior to 2010, the GDP was a direct entry in the official calculation of the HDI, but it has changed in the gross national product (GNP). There are also adjustments to the HDI that take into account variables such as income inequality.