It's a long time since I have looked at GDP methodology etc.. However,
today's Grauniad browsing brought up the following artlcle by Patrick
Collinson (p.7 in printed version):
http://www.guardian.co.uk/money/2011/dec/13/britain-second-highest-standard-of-living-eu#start-of-comments
It suggests that AIC is better than GDP because services provided by the
government are not included in the latter.
Is this true - does GDP really exclude non-marketed products? I don't
think it did when I was at college.
Further research suggests Collinson may have edited his evidence:
For example, he writes that "*GDP measures how much households spend rather
than how much they consume". *Moreover, according to Eurostat:
*"In international volume comparisons of consumption, AIC is often seen as
the preferable measure since it is not influenced by the fact the
organisation of certain important services consumed by households, like
health and education services, differs a lot across countries. For example,
if dental services are paid for by the government in one country, and by
households in another, an international comparison would not compare like
with like"*
He does not cite his Eurostat source, but at
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/GDP_per_capita,_consumption_per_capita_and_price_level_indices
we find the following:
".... For example if dental services are paid for by the government in one
country, and by households in another, an international comparison based on
HFCE would not compare like with; like, whereas one based on AIC would."
The reference to HFCE has been omitted by Collinson. In his piece the
comparison is between AIC and GDP. (HFCE is not mentioned).
Can anyone throw any light on this please?
JOHN BIBBY
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