GDP per capita

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I have noticed that nations with the highest values of GDP per capita generally have relatively high standards of living (assuming HDI values are reliable barometers of quality of life). Does it follow that high rates of production, coupled with high efficiency, create better lives for everyone? Or are the two concepts completely unrelated?
 
IMO your understanding is correct.

High productivity creates higher standards of living for everyone in general.
 
I have noticed that nations with the highest values of GDP per capita generally have relatively high standards of living (assuming HDI values are reliable barometers of quality of life). Does it follow that high rates of production, coupled with high efficiency, create better lives for everyone? Or are the two concepts completely unrelated?

Look at this way, when companies hire people, they look at the value that they add to the company. Say the revenue per unit is $5/unit

Worker A can produce 100 units/day, which means the revenue the worker generates is $500.
Work B can produce 200 units/day, which means the revenue the worker generates is $1,000.

This is a measure of a worker's productivity and is a result of both the worker themselves and any equipment they use.

No worker will ever be paid above the revenue that they generate. The more money a worker is paid will result in a higher quality of living (as measured by economics.) People with more money spend money to get things of higher quality.
 
Of course high GDPs per Capita are strongly correlated with high living standards! They don't tell the whole story, because there may be other issues at play (like very high concentration of income) but if you could only look at a single metric (as opposed to a collection of metrics such as HDI) to judge how high living standards are in a given country, GDP per Capita (in PPP terms) are the best approximation.

The countries with the highest human development index (Norway, Australia, US, Switzerland, etc) are all among the ones with the very highest GDPs per Capita (on PPP terms).
 
How does a country like Kuwait fit into this?

Those countries (Kuwait and UAE above all) are quite artificial as they have an effective apartheid system going on. But if you're a Kuwaiti citizen, you're doing pretty good. So the numbers are quite accurate at least as far as actual citizens go.
 
A country that has a high GDP to me says that it must be fairly well developed in terms of infrastructure - allowing for more efficient economic activity.. People benefit from that too, not only companies, so the standard of living tends to go up whenever economic activity goes up. That's of course generally speaking, with a lot of exceptions you could think up if you wanted to.

Essentially I think it boils down to the fact that you need to make investments to create an environment in which successful economic activity can take place.. be it investments in infrastructure, the social safety net, educational instutions, or whatever. You want an environment with healthy, happy enough workers who then go out and spend their money on the stupid crap you think up in your labs or whatever. You'll also want ways to move around your goods to your customers somehow - roads, the internet, airports, etc. It's all interconnected and the more money you invest in society, the better it's going to generally be for people and companies.

So I don't think it's that people are more productive or whatever, it's just that they have more of a support network around them provided by society, such as roads, hospitals, ways to communicate, and all that good stuff. And the less you have to worry about, the better your life will be.

Look at Canada. We have highways and stuff, a couple rail lines, general peace and order, lots of people who make a good living compared to any nation on the planet, people are healthy, the economy is decent, nothing crazy is going on except for a mayor doing crack and saying inappropriate things.. A solid place to do business in, basically! A good place for people to live as well, because that just seems to go hand in hand for reasons that are not that clearly explained above, but might seem clear if you just think about it like that?
 
Equatorial Guinea has higher GDP per capita than Portugal, Hungary or Czech Republic, but much lower HDI.

So relation between the two is not something that is obvious.

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Warpus, you live in Canada? In which region? I have some relatives in Canada.
 
GDP (well, GNI) per capita is one third of the HDI so yeah there's gonna be some correlation.

More generally, GDP per capita is final output of goods and services per person in a year. That's what it measures. It's not an all-encompassing measure of prosperity, sustainability, or standard of living and was never intended to be.

All things being equal you'd expect a country with way higher goods and services output per person to be "better off" whatever that term means to you. But "all things being equal" is a reasonably large caveat. Things like non-renewable resource depletion, ecological sustainability and degree of inequality in income distribution are all important things to factor in when using GDP to compare countries on economic welfare grounds.

We're not quite at the stage of settling on an international statistical standard for depletion- and degradation-adjusted GDP, but it'll be nice when we are.
 
The calculation of GDP is very interesting and largely reflects gold-standard logic. It doesn't handle imports-exports well, but since it does so consistently, at least it doesn't break itself.
 
The calculation of GDP is very interesting and largely reflects gold-standard logic. It doesn't handle imports-exports well, but since it does so consistently, at least it doesn't break itself.

What if you just use consumer spending + investment? Aka GDP - Government Spending - (Export - Import)
 
What if you just use consumer spending + investment? Aka GDP - Government Spending - (Export - Import)

I'm not sure if those are meant to be minus signs or concept dividers but I'm also not sure what kind of problem you're trying to solve.
 
To get a more reliable measure of wealth. Wealth is not completely measurable, though GDP as you say reflects largely gold standard logic, or more precisely, bullionist logic.
 
HDI is calculated by three things: an income index (GNI per capita PPP) itself, expected life expectancy at birth and an average education index.
Your intuition probably tells you why one often leads to the other better than I can explain.

A more interesting question is whether higher productivity and efficiency leads to higher happiness and better lives more generally, and if that answer should influence policy.
 
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