Two economists at Stanford University in the USA have published a new paper in the American Economic Review surveying an alternative to GDP per capita as a benchmark for economic welfare.

In their interpretation, a person’s welfare is based on how much they can actually consume and how much time they can actually take off. Leisure time, life expectancy and inequality are all included in their overall assessment and one interesting result when the data is analysed is the shrinking gap in measured economic welfare between France and the USA.

"If policymakers were to compare the United States to France by average consumption, for instance, then France’s living standard is only 60 percent of the U.S. level. But using a measure that includes France’s lower inequality, lower mortality rate, and more leisure, France’s welfare-based living standard is about 92 percent of the U.S. level, with inequality, mortality, and leisure all boosting the relative standard equally."

This is an interesting addition to the growing cluster of alternative composite measures of economic welfare / wellbeing as an alternative to the traditional focus on real income (GDP/GNI) per capita.