Why do traditional measures of wealth and economic opportunity fall short?
• There are many measures of economic activity, such as unemployment, inflation, GDP growth, productivity, or retail spending. But there is no credible, authoritative measure of economic opportunity—the potential for people to improve their economic well-being based on their efforts. • GDP per capita (the country’s total output (Gross Domestic Product or GDP) divided by the total number of people in the country), a popular measure used to rank how rich countries are compared to one another, does not show the great variance and concentration of income for people from different socio-economic backgrounds. As long as the nation’s total GDP grows at a higher rate than its population, we will see an increase in GDP per capita without really understanding what proportion of the population is actually earning the bulk of the income, or whether these gains are likely to be sustainable. • Other measures, such as the Gini coefficient (a measure of statistical dispersion most prominently used as
