About this Resource
Exemplar: Size of economy, productivity and welfare

In comparing the sizes of economies, the purpose of the study has to be considered. Comparing absolute sizes (the value of goods and services produced by each country in total) might be important to your research. In which case GDP or GNI would be proper series to use.

But you might want a relative measure, such as how much each member of the population was producing, or receiving. In such cases you might use GDP per head or per capita - commonly available.

Productivity

GDP per capita would give a rough measure of how much each member of a population was producing - labour productivity.

But data in 'per head' or 'per capita' terms obviously depend on the measure used in calculating the size of population - for example whether it was people actually employed, people of working age or the whole population. The first two of these would obviously depend on measures of demographic and economic structure and the unemployment rate; each variously defined. The latter would depend on how the total population was defined.

Comparing labour productivity might be better achieved through a measure of output per hour. Rate of growth of output per hour is commonly used. OECD and ILO produce such data.

Welfare

It might be tempting to use GDP per head to measure how well-off the population was individually. Again this could be used as a very rough measure for international comparison. Most of the inhabitants of a country whose GDP per capita was $1000 per year are likely to be worse-off than the inhabitants of a country whose GDP per capita is $20000 per year.

But often the measure is too bland. The DISTRIBUTION of resources might differ greatly from country to country. GDP per head is an AVERAGE figure. What people actually receive is distributed around that average and variation can be very great - in some countries income is very unequally distributed. Furthermore such distribution is seldom normal or even symmetrical. In virtually all countries a few people receive very high incomes but many receive very low incomes, giving a 'positive' skew.

So to make cross national comparisons of welfare it is often wise to use explicit measure of the distribution of resources as well as pure size per head measures. Such data can be found in the World Bank's statistical publications.

The University of Manchester; Mimas; ESRC; RDI

Countries and Citizens: Unit 2 Making cross-national comparisons using macro data by Dave Fysh, University of Portsmouth is licensed under a Creative Commons Attribution-Non-Commercial-Share Alike 2.0 UK: England & Wales Licence.