00:01
So here we're talking about gdp.
00:02
Let's make sure we remember what gdp is, right? gdp is the market value of all final goods and services produced domestically.
00:20
Well, that's not a very good v.
00:24
Services produced domestically.
00:28
And i would say there are three parts to this that are important, right? domestically, final and market.
00:34
Market value.
00:36
So the whole idea is that living standards or welfare depend upon a whole lot of things that are not captured in gdp, right? for example, leisure time.
00:52
Leisure time is not a market or good or service.
00:54
I don't go to the store and buy leisure.
00:58
So i would probably want, but leisure time matters to me, right? so an easy way to adjust gdp for leisure time would be to adjust to gdp per hour worked, right? that would be perhaps more interesting.
01:20
You know, i don't, if i'm making $50 ,000 a year by working 20 hours a week, or i'm making $50 ,000 a year by working 50 hours a week, i feel very, very different to that, right? so that's one big thing that's missing that i would possibly consider adding.
01:36
Another one that i we don't consider is in adding environmental damage right the natural environment in which we live matters a lot to my standard of living but it is not a market final good or service right i can't go to the store and buy a better environment so environment doesn't show up in gdp right so what i might want to do is to subtract damage from gdp if a company produces a product that is worth $50, gdp says we're worth, we have $50 more stuff.
02:19
But if producing that $50 product also caused $50 of environmental damage, we're not better off from that at all, right? so we should be maybe thinking about adjusting for environmental damage.
02:31
Another classic example is home production, right? this is non -market stuff at home...