Note: This is post #72 in a weekly video series on basic economics.
If money can’t buy happiness, why do we measure standard of living in economic terms, specifically GDP per capita?
A primary reason is that increases in real GDP per capita also correlate to improvements in those things money can’t buy, such as health and happiness. In this video by Marginal Revolution University, Alex Tabarrok explains why it’s a helpful measure—and where it falls short.
(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)
Click here to see other videos in the Introduction to Economics series.