Uses of national income data and living standards pt 2 Flashcards
Big mac index
-When each currency in the world id measured against a common standard - a hamburger
-The PPP is calculated and can tell us whether a currency is under or overvalued in foreign exchange markets
Disposable income
The amount of money households have available for spending and saving after direct taxes such as income tax. It includes earnings from employment, investments and benefits.
Limitations of data on income per head
-Official data on incomes may be inaccurate as not all incomes earned are taxed
-Regional and local variation in per capita income
-Doesn’t tell us changes in length of work hours and conditions
What is economic well being
Refers to the overall quality of life and material prosperity enjoyed by individuals and households. Some aspects include income, consumption, job security and more.
Economic growth
The sustained growth of real GDP over time. Contributes to rising average living standards. there is a long run increase in a country’s productive capacity
Economic welfare
A broader measure of well being (social and economic)
How is wellbeing measured
Healthy life expectancy
Unemployment and job security
Education
Median household income
etc
Subjective happiness
Self reported levels of happiness with ones life, determined using questionnaires. It involves considering emotion rather than just material well being. Factors include personality, genetics, health, etc
Easterlin paradox
It concerns whether we are happier as our real SOL improve. Easterlin argued that life satisfaction does rise with average income but up to a point.
HPI
Happy planet index measures life expectancy, well being, inequality of outcomes and ecological footprint to determine which countries the longest happiest and most sustainable lives for their residents.
