Difficulties in Measuring GDP (Gross Domestic Product)
- Saturday, January 31, 2009, 17:19
- Economics
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GDP is the value of goods and services produce in a country during the time period of year. Measuring of economy on GDP standards consist some drawbacks.
Double Counting Problem
Including the price of intermediate goods individually and with final product.
Self doing activities
Unrecorded economy in personal activities like the duties performed by oneself, housewives etc are not included in the GDP.
Illegal Economy
The economy which can be shown incorrectly due to corruption,bribery and drugs business.
Statistical Errors
People measuring the economy not performing their duties with honesty or the standard they are using are not current to measure the accurate value of GDP.
Pollution Factor
Pollution factor can’t be included in GDP.
Facilities and living standards
facilities and living standards improvement can’t be indicated by GDP, to show whether the people of the country are worst off or well off.
Quality Improvement
As the time passes quality improve with speed as compared to the price, GDP can only measure the price as value but not quality.
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