@Summit_Rider

The Economics of Well-Being

Measurement Error. ”Compiling GDP involves making a lot of choices, and even reasonable choices can lead to skewed results. Statisticians understandably favor goods and services that are bought and sold—and thus easily valued by market price—over economic activities whose value must be estimated.

Such things as unpaid household work, although clearly of great economic importance, are left out of the calculations. And the value of government programs, including health care provision, is generally underrepresented, as is the value of leisure. Yet the anti-estimate bias is inconsistent: For example, “imputed rent”—an estimate of how much homeowners would pay if they didn’t own their homes—makes up about 10% of the United States’ GDP…”

 

via @HarvardBiz

Image by Yue Minjun