GDP Biases ● Exclusion on Non-market activities ○ May excludes unpaid works ■ Child care ■ Volunteering ○ Subsistence farming ○ Informal activities - street vendors ○ Underestimate of the whole economic system ● Environmental cost ignored ○ Pollution cleaning expenditure ○ Does not account for environmental economic damages ● Quality of life ○ Cannot notify health of individuals in country ○ Education level cannot be imputed in origin GDP index ○ Country with high GDP but have unequally and pollution ■ ex) india ● Have high GDP due to multiple super rich + population level but it does not account for individuals quality of life(education+health) ● Income distribution ignored ○ Dollars earned from rich and poor are treated equally ■ Average might be higher in India than Singapore ■ When accounted with median income, Singapore has higher income rates India seems to have a large economy when seen in GDP index (average) but when the median index is accounted as less than $5000USD annually.. Some super rich individuals are boosting the GDP index. The large Indian population also might be contributing to the overall inflated GDP index Case study ● Rural Nepal village ○ Recorded economic activity ■ Farmer sells 100 kg of rice in market => $50 added in GDP ■ Shopkeepers sells goods => $200 added to GDP ■ = 50+ 200 = $250 contributed to total GDP ● Ignored GDP ○ Subsistence farming ■ Samer farmers grow 500 kg of rice for own family consumption ● Values around $250 ● $0 impact on overall GDP ● Unpaid Domestic work ○ Farmers wife woks 6 hours a day ■ cooking / cleaning ○ Value of $15 per day ■ $5,475/ year ■ $0 GDP impact ● Informal Community Exchange ○ Village Barter ■ 20kg rice => trade with handmade tool ■ Tool => help harvest crop ■ Value of $300 month => 3600/year ■ $0 GDP impact