Vol 9, No 4 (2021)
Applying Geographic Models to Examine the Impact of Gross Domestic Product as a Proxy for Economic Well-being
Aaron J. Pacheco, Kristian Braekkan, Shelly Albaum
Abstract
This paper considers whether gross domestic product (GDP) adequately measures economic well-being, or whether other measures of economic well-being should be used instead of or in addition to GDP. Increasing GDP/capita has long been the goal for local communities, regions, and states. Usually, GDP is treated either explicitly or implicitly as a measure of economic prosperity. But economic prosperity might not correspond to economic well-being if the prosperity is unevenly distributed or if the benefits are experienced outside the local area. This paper introduces a two-pronged approach to evaluating the relationship between regional economic development and regional economic well-being. First, we identify geographical patterns of economic development and consider measures of economic well-being for the same geographical areas. Second, we consider spatial analyses that cluster index values in relation to cultural and geographic features at national, region, and state levels. Regression residuals and local R2 patterns confirm the complexity at which economic well-being factors vary over space. The paper concludes that policy making based on economic well-being must incorporate a comprehensive definition of economic well-being that attends to local and regional interactions; economic well-being cannot be adequately defined by any single variable, such as GDP. Recommendations for future studies are included.
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Keywords
Economic well-being, GDP, Geospatial, Econometrics.
Publication information
Volume 9, Issue 4
Year of Publication: 2021
ISSN: 1857 - 8721
Publisher: EDNOTERA
How to cite
Pacheco A.J., Braekkan K., Albaum S.: Applying Geographic Models to Examine the Impact of Gross Domestic Product as a Proxy for Economic Well-being. Journal of Applied Economics and Business, Vol 9, No. 4, 65-88. (2021)