So GDP per capita is generally used to measure the well-being of citizens. When we say per capita, we mean per person. Right? Per person in the population. So we say if there's more GDP per person, well, that means there's more output per person, and we can say that there's more production available per person and tends to lead to an increase in the well-being. However, this shouldn't be the only measure of well-being. Right? Because there are things that are not included in GDP that definitely account for the well-being of the citizenry. So what about the value of leisure? Imagine if everyone worked all the time, no one took any breaks, everyone works 168 hours a week, 12 hour days. Well, GDP would be higher, wouldn't it? If everyone worked all the time, but would the citizens be happier? Probably not, right? They'd be exhausted. They probably get sick more often from overwork and it wouldn't benefit the citizens although GDP would be increased, right? It wouldn't necessarily translate to happier, better citizens. So the value of leisure is not included in GDP because the idea that if everyone just worked more, GDP would increase, meaning the well-being would increase that doesn't really follow.

Next is environmental effects. GDP would be higher if without environmental regulations as well. So if there were no environmental regulations, there would be a lot more production, there wouldn't be restrictions on production and there would be a higher GDP, but does that necessarily lead to the well-being of citizens? Probably not. Right? As a well-being, this GDP should probably be reduced for these health hazards and pollution and things like that. There should be some sort of measure of these pollutions that kind of adjust GDP for that.

Next is crime and social problems. If there was more crime, there would be more government spending. Right? Because more crime would lead to more police, higher government spending. We know government spending is part of GDP. Well-being of the citizens? I don't think so. Right? So you could see that these social issues can play a part in GDP as well.

Finally, one more issue with GDP is the equity in GDP. GDP is just measuring the total amount of production and saying there's this much per citizen, but is it really split evenly? There's not really a perfectly even split of GDP. Right? It measures what we say the size of the pie, right, the GDP pie. But how is it split? I don't think everyone's getting equal slices. Right? We're not getting equal slices for each citizen. Maybe we'll have some really small slices here and some really big slices. Right? Maybe we've got a little tiny slice here and then a really big slice for someone else. So it measures the size of how much is being produced but not how it's split between the citizens. So that's not a perfect measure of well-being as well.

So remember, the two problems here with GDP is that it doesn't necessarily include all production and it doesn't necessarily perfectly measure the well-being of the citizens. Cool? Alright. Let's go ahead and move on to the next topic.