Forwarded to: i[wsn@csf.colorado.edu]
cc:
Comments by: Greg Ehrig@USOTP@TA
-------------------------- [Original Message] -------------------------
On Sun, Apr 96 Bruce McFarling wrote:
> Two quick observations:
> First, both total GDP and per capita GDP measures are biased
>measures of the experience of the population of a country.
>Obviously, a
>10% increase in the income of an individual in the top quintile of the
>income distribution has more weight than a 10% increase in the
>income of
>an individual in the bottom quintile. Growth in median GDP would be
>a
>better measure of the population's experience regarding changing
>national
>income.
I agree, and I gave myself some weasel room for this by mentioning
the issue of income disparity. The reason that I did not go further
into the issue is that I did not have those set of figures handy. Does
anyone know who publishes median GDP figures? Even then, there
are problems with using this measure. The United States, as I am
sure everyone is aware, has one of the highest levels of income
disparity in the world -- but this is not necessarily a bad thing.
Someone we define as being at the "poverty level", for instance,
would qualify as a rich ma- er, person in many, if not most, third
world countries. So, GDP per capita is a flawed but still useable
measure of well-being. There is no one perfect measure of a
quantifyable nature when dealing with any subject involving human
beings - because tastes differ. But enough - on to the more difficult
point raised by Bruce:
> Second, GDP is obviously not designed as a measure of welfare. It
>is simply the market value of newly produced goods and services.
>GDP
>growth does not distinguish between increasing output to fight a
>war,
>increasing output so more people can go to Disneyland on their
>vacation, or increasing output so fewer children go to sleep hungry
>and go
>to schools that are dysfunctional. The GPI was developed in an
>effort to
>provide a market measure where more 'goods' were added and more
>'bads'
>subtracted, and has per capita GPI in the US stagnant or declining
>since
>the ealry seventies. And whether or not it is successful (I haven't
>settled this to my personal satisfaction yet, so I will offer no
>arguments
>for or against the specifics of the index), it is an effort to measure
>welfare as opposed to total market transactions of a given type. If
>you
>wish to claim it gives a false picture, you need a competing welfare
>measure to support the claim.
I have read about this measure, and in concept I recall it was an
interesting idea. However, the problem with using indexes such as
this is that the biases of the constructors will heavily influence the
outcome. For instance, how do you put a definite quantitiative value
on a child dying of malnutrition? I myself would put an infinite value
on that if the child were my own, a slightly lower value if the child
belonged to a relative, slightly lower if it belonged to a friend, and
slightly lower still if it belonged to someone I did not know. One is
even temped to formulate a theorem regarding human behavior: the
amount the average person cares about his fellow man is equal to the
inverse square of the distance to that fellow man. I am not proud of
this, but I am human. I defy anyone to claim differently(If you could
do so, you would not be reading this -- you would have sold your
computer, and all you owned, and given it to the poor) Let me try to
bring this ramble to the subject at hand-- the point is, the values I
might assign to the various "goods" and "bads" would almost
certainly be different from yours, dilbert's, clinton's, dole's, mother
terisa's, and the of the team that formulated the study. I suspect
the team or organization (could you give me a reference?) conducting
the study already knew what answer they _wanted_ the GPI to
produce, and by adjusting the values for the constants, found it. Note
that this does not mean that they meant to do so or even were
conscious of doing so. The history of researcher bias in science is
well documented-- even men and women who are pillars of integrity
have been shown to succumb to it. This is one of the reasons why
GDP per person is a measure I prefer for measuring welfare --
especially internationally. Welfare results when many factors, both
good and bad, contribute to many cultural mindsets, each of which in
turn are composed of many individual psychologies. Putting a "price
tag" on this (i.e. GDP per capita) is similar to putting a price tag on a
good in a store -- each compresses an enormous amount of
information down to a very manageable, (and more-or-less accurate)
number. In short, while neither measure is perfect, I guess I am a
conservative in the sense that I prefer the evils of the old GDP per
capita system (with caveats for income dispersion&others) to the
unknown evils of some of the more "newfangled" systems of
measurement.
That said, GPI could still give us some insights into the condition of
the state of welfare -- if we are aware of the pitfalls of this type of
analysis. Certainly there is a popular feeling that things are not as
good now as in the old days, but then they never were, no?
What does the GPI record for the world as a whole, instead of just
the US?
Yours,
Greg
________
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one in which the sovereign does as he pleases so long as he pleases
the assassins. Not many absolute monarchies are left, most of them
having been replaced by limited monarchies, where the sovereign's
power for evil (and for good) is greatly curtailed, and by republics,
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