Beyond GDP as a measure of welfare: introducing the health-adjusted income metric

Abstract

BackgroundGross domestic product (GDP) is often used as a proxy for quality of life. Yet, material gain is only one of the many aspects of life that enhance the wellbeing of a population. One of the most important aspects of welfare is the value of human lifespan. A full-income approach can capture both monetary income and the value of changes in mortality. However, existing literature estimating full-income has two shortcomings: first, the concepts of levels of life expectancy with changes in life expectancy are often conflated, assigning monetary values estimated for changes to levels instead; second, existing approaches apply only to high-income countries and cannot be expanded to low-income countries. Here, we present our framework for a health-adjusted income that captures both the GDP and the monetary values of health and longevity of populations MethodsIn developing the health-adjusted income framework, we distinguish the differences between levels and changes in mortality, and assign proper values to each. We also explore several approaches for assigning values for changes in mortality for all countries. We compare changes in health-adjusted income across time and countries, and break down the changes into four parts (changes in income, life expectancy, and willingness to pay due to changes in income or changes in life expectancy). FindingsWe provide health-adjusted income estimates for 195 countries between 1970 and 2015, and highlight several interesting comparisons. For example, in the USA, per capita GDP has been approximately 20% greater than that in France for the past 30 years. Yet, the health-adjusted incomes of the two countries have been converging due to France's greater improvements in life expectancy. Other comparisons, such as India versus China, and within China over time, are discussed in detail. InterpretationCompared with GDP, health-adjusted income provides a more comprehensive picture of how countries' welfare has changed over time and allows for comparisons between countries. In a time of worldwide political change, a comprehensive welfare metric that captures population health should be provided to, and used by, policymakers. FundingNone