Name

GROSS DOMESTIC PRODUCT PER CAPITA

Brief definition

Levels of GDP per capita are obtained by dividing annual or period GDP at current market prices by population. A variation of the indicator could be the growth of real GDP per capita which is derived by computing the annual or period growth rate of GDP in constant basic producers' or purchasers' prices divided by the corresponding population.

Unit of measure

EURO

Type of Indicator

Driving Force

Objective

The indicator contributes to the definition of the socio-economic context of the area affected by desertification. The indicator is a basic economic growth indicator and measures the level and extent of total economic output.

Importance with respect to desertification

As a highly aggregated composite measure of the economic state of development, this indicator reflects the economic capacity to implement measures to combat desertification.

International Conventions and agreements

The objective of the UNCCD is "to combat desertification and mitigate the effects of drought … with a view to contributing to the achievement of sustainable development in affected areas".

Secondary objectives of the indicator

GDP, at both national and sub national levels, represents a fundamental indicator for national decision- makers.

Definitions and basic concepts

GDP can be defined in three ways. Firstly, it is the sum total value - sum of all production units including all taxes and subsidies on products which are not included in the valuation of output. It is also equal to the sum of final uses of goods and services (except intermediate consumption) measured in purchasers' prices, less the value of imports of goods and services. Finally, it can be measured as the sum of primary incomes distributed by resident producer units.

Benchmarks Indication of the values/ranges of value

National targets are generally oriented towards priorities, availability of resources and, in large measures, to historical economic performance. International targets are often established by financial institutions and international organizations only for the purposes of intercountry comparison of economic performance in determining the direction of aid distribution or resource allocation projects. Country groupings to form economic entities, for example, the European Union, and the Organization of Petroleum Exporting Countries (OPEC), also set international targets among constituent members to serve as guidelines in national policy priority setting.

Methods of measurement

The current price estimates of GDP are adjusted to GDP at constant prices with the use of price deflators. Population estimates enable the conversion of total GDP to per capita levels, while exchange rates and other conversion factors are used to arrive at values based on a common unit of currency. Real GDP is derived by extrapolating total value - added in the base year with production indicators in physical terms or by deflating current price values by a price deflator.

Limits of the indicator

The GDP does not record the informal economy, which is estimated to account for between 7% and 16% of the GDP of EU Member States. The shadow economy in Italy and Greece is about 20%-25% of the GDP (Communication on undeclared work, COM(98)219, European Commission, April 1998 - EU9804197F).

The use of the GDP, not the GDP itself, is harshly criticized as scientifically incorrect. Simon Kuznets himself (the economist who, in the early 1940s, devise GDP), and many other experts of national budgets and accounting tried for years to prevent the GDP being used as an indicator of prosperity and human development. This is because GDP does not measure important aspects of development such as health, crime, poverty, environmental health/decay and destruction of the natural environment, loss of leisure time, lack of civility in communities, lack of concern for future generations, and income gaps (women/men; poor/wealthy). Due to these failings GDP used as an indicator of human development contributes to making Western societies practically blind to fundamental human needs, and to environmental emergencies, as well as encouraging politicians to take the wrong decisions.

Linkages with other indicators

This indicator has close links with many, more disaggregated indicators. Examples would include Population growth rate, Net migration, Land use evolution, arable land per capita, etc.

Data required to calculate the indicator

Population growth, net migration, GDP.

Data sources

The principal data elements for a majority of countries are mostly and regularly available from national and international sources on a historical basis. Internationally accepted conceptual guidelines are also available to assist with the compilation of the indicator.

Availability of data from national and international sources

Annual GDP data in current and constant prices are generally reported by national statistical offices or central banks in the United Nations (UN) National Accounts questionnaire and supplemented by estimates prepared by the UN as well as other international organizations such as the World Bank and the IMF. The Organisation for Economic Co-operation and Development (OECD) compiles quarterly GDP estimates for its Members. Population data are mainly obtained either through censuses or surveys. These are supplemented by growth estimates prepared by the UN Population Division.

Main institutions responsible

The lead agency is the United Nations Department of Economics and Social Information (DESIPA).

Other contributing organizations

Universities of Basilicata, Lisbon, Murcia, Athens, Amsterdam, Leeds.

Bibliography

The 1993 SNA provides international standards on national accounts and is the product of collaborative efforts between EUROSTAT, IMF, OECD, UN and the World Bank.

Other references

http://esl.jrc.it/dc

http://iisd1.iisd.ca/cgsdi

Contacts Name and address

University of Basilicata
Prof Giovanni Quaranta
email: quaranta@unibas.it