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What are weaknesses of using national income statistics as a measure of social welfare?

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Weaknesses of using national income statistics as a measure of social welfare are;

  • Bulk of the wealth held by a few people/Unequal distribution of income
  • Wealth is created in the expense of peoples health/time for rest and recreation or leisure/no time for family etc.
  • Increased productivity but there is massive environmental pollution
  • Inflation i.e the price level could have risen by the same proportion as per capital income.
  • Most of the income made due to improvement is all put into more investment and not on improving for instance own housing.
  • Government may be using income earned on goods and services such as military facilities which does not directly improves people‘s standards of living.

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