Gross Domestic Product (GDP) Measure: Why It Matters for Countries

Gross Domestic Product (GDP) is one of the most frequently mentioned economic terms in the world.

 You hear it in news reports, government announcements, and financial discussions whenever people talk about economic growth, recessions, or national performance. But what does gross domestic product actually measure?

 Does it reflect a country’s wealth, its citizens’ happiness, or its overall standard of living? Many people assume GDP captures everything about an economy, yet its purpose is more specific. 

GDP measures the total monetary value of all final goods and services produced within a country’s borders during a given period.

 Governments, economists, and institutions like the World Bank and the International Monetary Fund rely on it to assess economic performance.

 In this article, we will break down exactly what GDP measures, how it is calculated, and what its limitations are.

Definition of Gross Domestic Product (GDP)

Gross Domestic Product (GDP) is the total monetary value of all final goods and services produced within a country’s borders over a specific period, usually measured quarterly or annually. To fully understand what GDP measures, it helps to break down the term itself. “Gross” means the total output before deducting depreciation or wear and tear on capital goods. “Domestic” refers to production that takes place within a country’s geographical boundaries, regardless of whether the producers are domestic or foreign-owned. “Product” simply represents the goods and services created.

A key phrase in the definition is “final goods and services.” GDP does not count intermediate goods—items used to produce other goods—because doing so would result in double counting. For example, the value of flour used to bake bread is not counted separately if the bread’s final price is already included in GDP. Only the finished product sold to consumers is counted.

GDP is typically calculated and reported by national statistical agencies and central banks. International organizations such as the World Bank and the International Monetary Fund compile and compare GDP data across countries to assess global economic performance. By focusing strictly on measurable market activity, GDP provides a standardized way to evaluate the size and growth of an economy over time.

The Three Approaches to Measuring GDP

Economists measure GDP using three main approaches: the expenditure approach, the income approach, and the production (or output) approach. Each provides a different perspective but ultimately arrives at the same total economic value. Understanding these approaches is crucial to fully grasp what GDP measures.

1. Expenditure Approach

The expenditure approach is the most common method. It calculates GDP by adding up all spending on final goods and services in an economy. The formula is:

GDP = C + I + G + (X − M)

• C (Consumption): Spending by households on goods and services, like groceries, rent, and entertainment.
  
• I (Investment): Business investments in machinery, equipment, and construction, as well as residential housing.
  
• G (Government Spending): Expenditures by the government on public services, infrastructure, and salaries for public employees.
  
• X − M (Net Exports): Exports minus imports, reflecting goods produced domestically and sold abroad.
  

2. Income Approach

The income approach calculates GDP by adding all income earned by individuals and businesses, including:

• Wages and salaries
  
• Rent
  
• Interest
  
• Profits
  
• Taxes minus subsidies
  

This approach emphasizes that all spending in the economy eventually becomes someone’s income.

3. Production (Output) Approach

The production approach calculates GDP by summing the value added at each stage of production. This method ensures no double counting of intermediate goods. It also allows economists to break down GDP by sectors, such as agriculture, manufacturing, and services.

By analyzing GDP through these three perspectives, economists can better understand the dynamics of economic activity, whether it’s consumer behavior, business investment, or government policy. Each approach highlights a different aspect, but together, they provide a comprehensive picture of the economy’s total output.

Nominal vs Real GDP

When measuring GDP, economists often distinguish between nominal GDP and real GDP. Both track the total value of goods and services produced in an economy, but they do so in different ways, which affects how economic growth is interpreted.

Nominal GDP measures the value of goods and services using current market prices during the period in which they are produced. While this provides a snapshot of the economy’s size, it can be misleading if prices change significantly due to inflation or deflation. For example, if prices rise sharply, nominal GDP may increase even if the actual quantity of goods and services hasn’t changed.

To address this, economists use real GDP, which adjusts for price changes by using constant prices from a base year. This inflation-adjusted measure reflects the true growth of production rather than changes in price levels. Real GDP is therefore a more accurate indicator of an economy’s performance over time, as it isolates growth caused by increased output rather than by rising prices.

The difference between nominal and real GDP is captured by the GDP deflator, which indicates how much of the change in nominal GDP is due to inflation rather than real growth. By comparing real GDP over multiple years, policymakers, investors, and analysts can assess the health of the economy, identify trends, and make informed decisions about interest rates, taxation, and spending.

Understanding this distinction is essential because nominal growth alone does not guarantee improved living standards. Real GDP provides a clearer picture of whether an economy is genuinely expanding or if apparent growth is simply a result of rising prices. This is why economists and institutions like the World Bank consistently report real GDP alongside nominal GDP.

GDP Per Capita: Measuring Economic Output per Person

While GDP measures the total economic output of a country, it does not account for the size of the population. This is where GDP per capita becomes an important metric. GDP per capita divides a country’s total GDP by its population, providing an average economic output per person. This measure helps to approximate living standards and allows for more meaningful comparisons between countries of different sizes.

For example, a large country may have a very high total GDP due to its sheer size, but the average citizen may not be particularly wealthy. Conversely, a smaller country with a lower total GDP could have a much higher GDP per capita, indicating that its citizens, on average, enjoy higher economic well-being. GDP per capita is often used by economists and policymakers to assess relative prosperity, make international comparisons, and guide policy decisions.

However, it has limitations. GDP per capita does not reflect income distribution within a country. A high GDP per capita could mask significant inequality, with wealth concentrated among a small portion of the population. Additionally, it does not measure non-monetary aspects of well-being, such as health, education quality, or environmental conditions.

Despite these limitations, GDP per capita remains a widely cited statistic in global economic analysis. It helps provide context to raw GDP numbers and gives a clearer picture of how the economy impacts individual citizens. When combined with other indicators, such as the Human Development Index or income distribution metrics, GDP per capita contributes to a more complete understanding of economic and social well-being.

This makes it a valuable tool for both economists and everyday readers seeking to interpret the implications of a country’s economic performance.

What GDP Includes

Gross Domestic Product (GDP) focuses on the market value of final goods and services produced within a country during a specific period. Understanding what GDP includes helps clarify its role as a measure of economic output.

1. Market Transactions

GDP primarily counts activities that involve monetary exchange in legal markets. This includes everything from groceries, clothing, and electronics purchased by households to business-to-business transactions for machinery and raw materials, as long as the final product’s value is captured.

2. Consumption, Investment, and Government Spending

• Consumption (C): Spending by households on goods and services such as food, healthcare, education, and entertainment.
  
• Investment (I): Expenditures on physical capital, new construction, and business inventories. It also includes spending on residential housing.
  
• Government Spending (G): Includes salaries of public employees, infrastructure projects, and public services like defense and education.
  

3. Exports Minus Imports (Net Exports, X − M)

GDP counts goods and services produced domestically and sold abroad (exports), but subtracts imports because they are produced elsewhere. This ensures the measure reflects only domestic economic activity.

4. Legal Services and Public Services

Government services that do not involve direct payment, such as police services, education, and healthcare, are included in GDP at their estimated market value.

By including these components, GDP captures the monetary value of economic activity in a standardized way, allowing comparisons over time and across countries. It reflects the productive capacity of an economy and highlights sectors that drive growth.

However, GDP does not capture everything that contributes to societal well-being, which is why economists often complement it with other indicators like the Human Development Index or measures of environmental sustainability.

What GDP Does Not Include

While GDP is a powerful indicator of economic output, it has important limitations because it does not capture all aspects of a country’s economy or well-being. Understanding what GDP does not include is crucial for interpreting the numbers correctly.

1. Unpaid Work

GDP only measures economic activity that involves monetary transactions. Therefore, unpaid work, such as childcare, eldercare, volunteer work, or household chores, is excluded, even though these activities contribute significantly to society and the economy.

2. Informal and Underground Economy

Activities in the informal sector or black market are not recorded in official statistics. This includes unregistered businesses, under-the-table payments, and illicit trade. In some countries, this can represent a substantial portion of actual economic activity, making GDP an incomplete reflection of total output.

3. Environmental Costs

GDP does not account for environmental degradation or resource depletion. For example, deforestation or pollution may boost production in the short term, increasing GDP, but these actions can harm long-term sustainability and well-being.

4. Income Inequality and Wealth Distribution

GDP measures total output but ignores how wealth is distributed among citizens. A country could have a high GDP but significant poverty or inequality, meaning most citizens might not benefit from the economy’s growth.

5. Quality of Life and Non-Market Factors

GDP does not measure happiness, health, education quality, or social cohesion. These factors strongly affect living standards but fall outside GDP’s scope.

Because of these exclusions, economists often complement GDP with other indicators, such as the Human Development Index (HDI), Genuine Progress Indicator (GPI), or environmental metrics, to provide a fuller picture of economic and social well-being.

In short, GDP measures economic production, but it is not a complete measure of prosperity or quality of life. Recognizing its limitations is essential for making informed assessments of a country’s performance.

Limitations and Criticisms of GDP

While GDP is widely used to assess economic performance, it has several limitations and criticisms that make it an incomplete measure of a country’s well-being. Understanding these issues helps explain why economists often use GDP alongside other indicators.

1. Ignores Well-Being and Happiness

GDP measures output but does not capture personal satisfaction, happiness, or quality of life. A country could have high GDP growth while its citizens face stress, poor health, or long working hours.

2. Does Not Reflect Income Inequality

GDP totals all production, ignoring how wealth is distributed. High GDP growth may benefit only a small portion of the population, leaving most citizens with little improvement in living standards.

3. Environmental and Social Costs Are Excluded

Activities that harm the environment, such as pollution, deforestation, or overfishing, can increase GDP in the short term but reduce long-term sustainability. Similarly, social costs like crime or traffic congestion are not subtracted from GDP.

4. Focus on Quantity Over Quality

GDP counts all economic activity, regardless of quality. For example, producing low-quality or harmful products increases GDP just as much as high-quality goods. This focus on quantity can misrepresent true economic health.

5. Challenges in Measuring Modern Economies

The rise of the digital economy, gig work, and intangible assets makes it harder to capture all economic activity accurately. Many online services are free or ad-supported, yet they create significant value for society that GDP often misses.

Because of these limitations, economists advocate for complementary indicators such as the Human Development Index (HDI), Gross National Happiness (GNH), and Genuine Progress Indicator (GPI) to provide a more complete picture of societal progress. While GDP remains a useful tool for tracking production and growth, it should not be interpreted as a comprehensive measure of a country’s prosperity or well-being.

Alternative Measures of Economic and Social Progress

Because GDP has well-known limitations, economists and policymakers often rely on alternative measures to capture aspects of a country’s well-being that GDP overlooks. These indicators aim to provide a broader perspective on prosperity, quality of life, and sustainability.

1. Human Development Index (HDI)

Developed by the United Nations, the HDI combines life expectancy, education, and per capita income into a single measure. Unlike GDP, it evaluates not just economic output but also how wealth translates into human capabilities and opportunities. Countries with similar GDP can have very different HDI scores depending on health and education outcomes.

2. Better Life Index

The Organisation for Economic Co-operation and Development created the Better Life Index to assess well-being across multiple dimensions, including housing, income, jobs, community, education, environment, and health. It emphasizes the quality of life rather than just economic production.

3. Gross National Happiness (GNH)

Pioneered in Bhutan, GNH measures happiness and well-being alongside economic, social, and environmental factors. It reflects a growing recognition that national success should not be defined solely by production but by citizens’ overall quality of life.

4. Green GDP and Genuine Progress Indicator (GPI)

Green GDP adjusts traditional GDP by subtracting environmental costs, such as pollution or resource depletion. Similarly, GPI accounts for social and environmental factors, offering a more sustainable perspective on economic growth.

These alternative metrics highlight that economic output alone is insufficient to gauge national prosperity. While GDP measures what a country produces, indicators like HDI, GNH, and GPI measure how that production affects people’s lives, sustainability, and social well-being. Incorporating these measures alongside GDP provides a more holistic understanding of a country’s development and long-term progress.

Why GDP Matters in the Real World

Despite its limitations, GDP remains one of the most important indicators in economics because it reflects the overall economic activity of a country. Policymakers, investors, and analysts rely on GDP to understand the state of the economy and make informed decisions that affect both national and individual financial outcomes.

1. Indicator of Economic Growth

GDP is a primary measure of a country’s economic growth. Rising GDP signals that production is increasing, businesses are expanding, and households are likely spending more. Conversely, declining GDP can indicate a recession, prompting governments and central banks to take corrective action.

2. Guides Government Policy

Governments use GDP data to shape fiscal and monetary policies. For example, if GDP growth slows, a government may increase spending or cut taxes to stimulate the economy. Central banks may adjust interest rates based on GDP trends to control inflation or encourage investment.

3. Impacts Business and Investment Decisions

Investors and corporations monitor GDP to make strategic decisions. Strong GDP growth often encourages businesses to invest in new projects, hire employees, and expand operations. On the other hand, slow growth can signal caution in investment or hiring.

4. Facilitates International Comparisons

GDP allows economists to compare the economic size and performance of countries. It helps identify which economies are growing faster, attracting foreign investment, or leading global markets.

5. Influences Everyday Life

Changes in GDP affect employment, wages, government services, and prices. Higher GDP growth can lead to more job opportunities and improved public services, while a declining GDP may signal rising unemployment or reduced government spending.

In short, GDP matters because it provides a quantitative snapshot of economic health, guiding policy, investment, and personal financial decisions. However, it is most meaningful when considered alongside other social and well-being indicators.

How GDP Impacts Everyday People

While GDP is often discussed in abstract economic terms, its effects are tangible for everyday citizens. The growth or decline of GDP can influence employment, income levels, government services, and even the cost of living. Understanding this connection helps individuals see how national economic performance affects personal life.

1. Employment and Wages

A growing GDP usually signals that businesses are producing more goods and services. To meet higher demand, companies may hire more workers, reduce unemployment, and potentially raise wages. Conversely, a shrinking GDP can lead to job cuts, reduced hours, or stagnant wages, directly affecting households.

2. Government Services

Government spending, a component of GDP, funds essential public services such as healthcare, education, infrastructure, and social welfare programs. When GDP rises, governments often have more revenue to invest in public services, improving citizens’ quality of life. During periods of economic slowdown, these services may face budget cuts or limited expansion.

3. Taxes and Social Programs

GDP growth impacts tax revenues, which in turn affect social programs and subsidies. Higher GDP can allow governments to lower tax rates or increase public benefits. On the other hand, declining GDP may lead to higher taxes or reduced benefits as governments try to balance budgets.

4. Inflation and Cost of Living

Rapid GDP growth can sometimes contribute to inflation, raising prices for goods and services. Conversely, a shrinking economy may slow inflation but could also signal declining wages or job insecurity.

5. Business and Consumer Confidence

Changes in GDP influence consumer and business confidence. Strong growth encourages spending and investment, whereas a contracting GDP may make people more cautious with money.

In summary, while GDP is an aggregate measure, its fluctuations have direct consequences on employment, income, services, and everyday financial decisions, linking national economic performance to individual well-being.

Historical Background of GDP

Gross Domestic Product (GDP) has a rich history, emerging as a tool to measure economic activity and guide policymaking. Its origins are closely tied to the economic challenges of the early 20th century, particularly the Great Depression, which exposed the need for a standardized method to assess national economies.

The concept of GDP was developed primarily by Simon Kuznets in the 1930s. Kuznets created the first systematic framework to quantify a nation’s total economic output, providing governments with the data necessary to make informed policy decisions. His work laid the foundation for modern national accounts, allowing economists to measure growth, compare countries, and evaluate the effects of fiscal and monetary policy.

After World War II, GDP gained global prominence as countries sought to rebuild their economies. It became the standard measure for tracking economic recovery and growth, with organizations such as the International Monetary Fund and the World Bank adopting GDP as a key metric for international comparisons.

Over time, GDP evolved to include more sophisticated methods for accounting, such as adjusting for inflation to create real GDP, and developing sector-specific data for services, manufacturing, and agriculture. Despite its evolution, the core purpose remains the same: to measure the total value of goods and services produced in an economy.

Understanding GDP’s historical development helps contextualize why it remains central to economic policy and analysis today. While it is not a perfect measure, its creation marked a turning point in economic planning, enabling governments and institutions to make decisions based on quantifiable economic data rather than estimates or intuition.

GDP and Economic Growth Cycles

GDP is closely tied to the concept of economic growth cycles, also known as the business cycle, which describes the natural fluctuations of an economy over time. Understanding these cycles is essential to interpreting GDP trends and their implications for society.

Economic growth cycles typically consist of four phases: expansion, peak, recession, and recovery. During the expansion phase, GDP rises as businesses produce more goods and services, employment grows, and consumer spending increases. This is often the period when economies experience rising wages, higher corporate profits, and greater government revenue.

The peak marks the height of economic activity, where growth reaches its maximum. At this stage, resources may be fully utilized, and inflationary pressures can build up. Following the peak, the economy can enter a recession, characterized by declining GDP, reduced business activity, job losses, and lower consumer confidence. Governments and central banks often respond with stimulus measures or monetary adjustments to mitigate the effects of a slowdown.

Finally, the recovery phase begins as GDP growth resumes, businesses start investing again, and employment gradually rises. Over multiple cycles, GDP provides a quantitative measure of economic health, helping policymakers, investors, and analysts identify trends and anticipate potential downturns.

It is important to note that GDP alone cannot predict the timing or severity of these cycles, but it remains a primary tool for tracking economic performance. Monitoring GDP alongside indicators like unemployment rates, inflation, and consumer confidence gives a more complete understanding of where the economy stands within a growth cycle.

By examining GDP within the context of economic cycles, citizens and decision-makers can better interpret changes in production, employment, and overall financial stability.

Common Misunderstandings About GDP

Despite being widely cited in the news and economic reports, GDP is often misunderstood, leading to common misconceptions about what it actually measures. Clarifying these misunderstandings helps readers interpret GDP more accurately.

1. “Higher GDP Means Everyone is Wealthy”

Many people assume that a rising GDP automatically improves living standards for all citizens. In reality, GDP measures total production, not how wealth is distributed. A country can experience significant GDP growth while income inequality leaves a large portion of the population without meaningful economic gains.

2. “GDP Measures Happiness or Well-Being”

GDP quantifies economic output but does not account for quality of life, happiness, or social welfare. Countries with high GDP may have long working hours, environmental degradation, or poor public health, which GDP alone does not capture.

3. “GDP Growth Always Means Improvement”

While positive GDP growth often indicates a healthy economy, not all growth is beneficial. For example, GDP can increase due to overproduction, environmental harm, or spending on disaster recovery, which may not improve long-term societal well-being.

4. Confusion Between GDP and GNP

GDP measures domestic production, while Gross National Product (GNP) measures production by a nation’s citizens, including activities abroad. Many confuse the two, assuming GDP reflects all economic activity generated by citizens, when it only includes domestic output.

5. “GDP Includes All Economic Activity”

GDP excludes unpaid work, informal markets, and environmental costs. These omissions mean GDP provides an incomplete picture of a nation’s true economic activity.

By understanding these misconceptions, readers can interpret GDP numbers more realistically. GDP is a powerful tool for measuring economic output, but it is not a comprehensive measure of prosperity, fairness, or well-being. Complementing GDP with other indicators offers a fuller understanding of a country’s economic and social health.

GDP vs Other Economic Indicators

While GDP is the most widely cited measure of economic activity, it is only one of several key economic indicators used to assess a country’s health. Comparing GDP with other indicators provides a clearer picture of the economy and its impact on citizens.

1. GDP vs GNP

Gross Domestic Product (GDP) measures all goods and services produced within a country, regardless of who owns the resources. In contrast, Gross National Product (GNP) includes the output of a country’s citizens and businesses, even if production occurs abroad. This distinction is important for nations with significant foreign investments or expatriate workers.

2. GDP vs GNI

Gross National Income (GNI) is similar to GNP, focusing on income received by residents from domestic and foreign sources. While GDP emphasizes production, GNI emphasizes the income actually accruing to citizens, providing insight into national wealth distribution.

3. GDP vs Inflation Rate

GDP measures output, whereas the inflation rate tracks changes in overall price levels. Analysts often use real GDP, adjusted for inflation, to understand whether growth reflects higher production or merely rising prices.

4. GDP vs Unemployment Rate

GDP reflects total economic output, while the unemployment rate shows the proportion of people actively seeking work. Low unemployment can coincide with high GDP, but growth is not guaranteed to benefit all citizens equally.

5. GDP vs Trade Balance

GDP includes net exports (exports minus imports) in its calculation, but trade balance specifically measures a country’s international transactions. A country can have high GDP yet run trade deficits, affecting its long-term economic stability.

By examining GDP alongside these indicators, policymakers, investors, and citizens can make more informed decisions. GDP provides a broad view of economic production, but other indicators reveal income distribution, employment, price stability, and international competitiveness, offering a more nuanced understanding of economic health.

Case Study Examples

Examining real-world examples helps illustrate the strengths and limitations of GDP as an economic measure. GDP provides valuable insights into production and growth, but it does not capture the full picture of prosperity or well-being.

1. High GDP with Inequality

Consider a country with a rapidly growing economy driven by large corporations. Its GDP may increase significantly, signaling economic expansion. However, if most of the wealth is concentrated among a small elite, the majority of citizens may see little improvement in living standards. In this case, GDP growth does not reflect income distribution or social equity, highlighting one of its key limitations.

2. GDP Growth with Environmental Cost

Another example is a country that heavily exploits natural resources for production. While GDP rises due to increased output, environmental degradation such as deforestation, pollution, and depletion of natural resources is not subtracted from GDP. Short-term growth may look impressive, but long-term sustainability and quality of life are compromised.

3. Small vs Large Country Comparison

GDP comparisons between large and small countries can also be misleading. A large country may have a very high total GDP due to its population size, but GDP per capita could be low, suggesting modest living standards for the average citizen. Conversely, a smaller country with moderate GDP might have higher GDP per capita, indicating greater prosperity for its residents.

These examples demonstrate that while GDP is useful for measuring economic output and growth, it must be interpreted carefully. Analysts should consider income distribution, environmental impact, and per capita measures to gain a more accurate understanding of a country’s overall economic and social well-being.

By examining GDP alongside complementary indicators, policymakers and citizens can make more informed judgments about economic performance and societal progress.

Future of GDP Measurement

As the global economy evolves, economists and policymakers are rethinking how GDP is measured and whether it fully captures modern economic activity. Traditional GDP focuses on production and market transactions, but new developments in technology, services, and sustainability challenge its comprehensiveness.

1. Digital Economy Challenges

The rise of digital platforms, free online services, and the gig economy has made it difficult to accurately measure economic output. Many online activities generate value without traditional market transactions, such as free apps, open-source software, or social media engagement. GDP may undervalue these contributions, leading to an incomplete picture of modern economic activity.

2. Sustainability and Green Accounting

Environmental concerns are becoming increasingly important. Traditional GDP counts all production as positive, even if it depletes natural resources or harms the environment. Concepts like Green GDP aim to adjust economic output by subtracting environmental costs, providing a more sustainable measure of growth.

3. Well-Being Integration

Policymakers are exploring ways to incorporate social and human well-being into economic measurement. Metrics such as the Human Development Index (HDI) or Gross National Happiness (GNH) focus on health, education, and quality of life, complementing GDP’s focus on production.

4. Global Reforms and Policy Debates

International organizations like the World Bank and International Monetary Fund are encouraging countries to adopt broader accounting frameworks. These reforms aim to provide policymakers, investors, and citizens with a fuller understanding of economic performance, beyond simple output metrics.

In the future, GDP will likely remain a central tool for measuring economic activity, but it will increasingly be combined with other indicators to account for digital innovation, sustainability, and human well-being. This evolution reflects a growing recognition that true progress cannot be measured by production alone, but by the quality and sustainability of growth.

Conclusion

Gross Domestic Product (GDP) is one of the most widely recognized measures of economic activity, providing a snapshot of a country’s total production of goods and services over a specific period.

 It helps governments, businesses, and investors track economic growth, make policy decisions, and compare performance across nations. 

However, GDP is not a complete measure of prosperity or well-being.

GDP effectively measures economic output, but it does not account for income distribution, unpaid labor, environmental impacts, or quality of life. 

A high GDP can coexist with inequality, environmental degradation, or low citizen satisfaction. 

This limitation has prompted the development of alternative measures such as the Human Development Index (HDI), Gross National Happiness (GNH), Green GDP, and the Genuine Progress Indicator (GPI). 

These metrics complement GDP by providing insight into social welfare, sustainability, and overall quality of life.

Understanding GDP’s scope and limitations is essential for interpreting economic news and making informed decisions. 

While it remains a critical tool for assessing production and growth, relying solely on GDP may provide an incomplete or misleading picture of a country’s true progress.

Ultimately, GDP tells us how much an economy produces, but it does not tell us how well a society is thriving.

 To gain a more accurate understanding of national success, GDP should be considered alongside indicators of well-being, sustainability, and equity. 

By doing so, citizens and policymakers can evaluate not just economic growth, but the overall health, happiness, and prosperity of a nation.