Let me come right out and say it: I am a trafficker in Gross Domestic Product data and I’m not proud.
With every GDP estimate, first and second revisions of this key indicator of the state of the U.S. economy, there I am in the morning on the radio dutifully sharing this number, like a co-pilot calling out the airspeed during the takeoff roll so the pilot can decide the precise moment to lift the nose of the plane.
Despite my disclaimers, people hear GDP and conclude from that number that the economy is fabulous, good, indifferent, bad, or terrible.
The thing is, GDP measures money changing hands. It doesn’t tell you if the money changing hands is for good or for evil. If a pandemic of athlete’s foot ever swept across America, GDP would go up, because we would still hobble into work, but we would spend more on doctor’s visits and anti-fungals, contributing extra to GDP.
So GDP going up isn’t always “good.”
Furthermore, the inventor of the Gross Domestic Product, the American economist and demographer Simon Kuznetz, never intended it to be used as a scorecard in this way when he developed the calculation 80 years ago.
As I like to say, determining if the economy is good or bad by counting the dollars that are exchanged is like determining if a piece of music is good or bad by counting the number of notes.
Because, ultimately, do we really care how “the economy” is doing? We care about how well we, our families, our communities are prospering. How are we doing? — That’s the real question we all want answered.
If not GDP, then what numbers might yield a better readout about how we are doing?
Economists, statisticians, and economists are applying a variety of creative approaches to getting a better reading on our well-being. On Marketplace, we have vowed to cover these alternative measures early and often. Let me just highlight one here, a project devised by a researcher at the London School of Economics.
Some researchers are trying to see if there is a correlation between how happy you are and exactly where you are.
So many of us carry around precise tracking devices at all times. They are called “smartphones” and there’s an app called “Mappiness.”
Map + happiness = Mappiness, geddit?
If you download the app and opt in, the thing will buzz you at random times (you can make it leave you alone at night, in case you are wondering). When the app beeps, you let it know how happy or sad you are at that moment. Here is the interesting part: When you record your level of bliss vs misery scale, your phone knows where you are. Researchers are building a big database of these readings to see if patterns emerge, focusing first on Britain.
Are we happiest in the woods, in a park or in a shopping mall? How bummed out are we at work compared to at home?
Among the results so far: People seem to be more content when they are near the ocean. Coming in second, behind the coast, is the mountains. The middle of the city was, statistically, the least happy place, as least as measured in the British data.
If enough people have the app installed, the system might eventually be able to correlate not just where we are the happiest but with whom we are the happiest. You don’t need an app to tell you who fills you with rapture or annoys the heck out of you.
But researchers would be very interested in the role relationships play in our well-being. That may play a greater role that that GDP number the guy on the radio is always yammering on about.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
