How useful GDP is as a measure of well being - that old chestnut!

The Bobby Kennedy speech of 1968 below I bet has been used by many in the classroom to introduce the downsides of GDP and here's a great post from the Conversable Economist (Timothy Taylor - great name, one for the real ale lovers!) looking at this topical issue.

The post is in reference to this paper (Hooray for GDP!) which looks at four standard reasons why GDP is regarded by some as an outdated indicator of happiness and well being. The author breaks each down and provides reasons why actually GDP is still relevant. The four reasons against are:

1. GDP is hopelessly flawed as a measure of welfare. It ignores leisure and women’s work in the home. It takes no account of pollution and carbon emissions.
2. GDP ignores distribution. In the richest country in the world, the United States, the typical person or family has seen little or no benefit from economic growth since the 1970s. But over the same period inequality has risen sharply.
3. Happiness should be the grand aim of policy. But the evidence is that, above a certain level, a higher material standard of living does not make people any happier. ...
4. Even if higher GDP were a good idea on other grounds, it’s not feasible because the environmental damage would be too great.