National Income As An Indicator Of Standard Of Living

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to difficulties in the
measurement. E.g. Second hand deals go unregistered. The second criticism
which is linked to this is that sales in the black economy will also go
unregistered even though they may have significant effects (both good and
bad) on a personÕs standard of living. For example, if drugs were being
sold on the black market this may lead to a rise in crime and so peopleÕs
standard of living would fall, however the person selling the drugs would
increase their income and so that may increase their standard of living.

National Income will rise if employment and output rise, but a rise in
these factors does not necessarily reflect a rise in the standard of living.
For example an oil spill in the ocean will require a large team of rescue
workers to clean up, employment has risen in this situation but the area
suffers terrible effects in terms of the damage to the environment and
natural beauty and perhaps a reduction in the tourist flow into the area.

A further ...

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