Does monetary wealth equal sleep health? – Part 1, Gross Domestic Product and Population Health

SHARE:
Facebook
Twitter
Email
LinkedIn
sleepvsGDP-f

By Dr Tim Smithies and Dr Ian Dunican

Unless you’re incredibly good at dodging the news (and if so, congratulations), you would have heard discussions about countries’ Gross Domestic Product or GDP. According to the wisdom reservoir that is ChatGPT (yes, ChatGPT came up with that flattering description; to learn more about ChatGPT, check out a previous blog our ours), GDP can be thought of as a giant scoreboard, with the score being how well a country is doing economically [1]. It can be calculated in many ways (though there are three main ones) and often requires revisions or adjustments before it is considered reliable. The most commonly used approach is the Expenditure Approach, which adds up the money spent on the consumption of goods and services, investments, government spending, and the difference between the country’s exports and imports. To compare GDPs between different countries, it is normally presented per capita or per person living in that country. GDP is often used to measure a country’s overall wellbeing or standard of living. However, this is condemned by many economists (including Simon Kuznets, the man behind the modern-day use of GDP [2]) due to its various limitations and simplicities.

So, if GDP isn’t a perfect measure of a country’s overall wellbeing, does it represent the health of a country’s population? The most commonly used metric for this is life expectancy. Taking a longitudinal approach (i.e. looking across the span of years or decades), we see that, in general, both GDP per capita and life expectancy have increased, at least in OECD countries (Organisation for Economic Co-operation and Development); essentially, a club for rich countries [3]. For example, in Australia, since the turn of the century, GDP per capita has grown from $28,000 USD to $72,000 USD [4], while life expectancy has risen from 79 to 83 [5]. This pattern isn’t identical among all OECD countries; in the United States, life expectancy has gone down by half a year over the same period despite a similar GDP per capita growth trend. However, this continual simultaneous growth of GDP per capita and life expectancy holds true with some exceptions.

We can also look at the relationship between GDP per capita and life expectancy cross-sectionally, mean across different countries but at the same point in time. In doing so, we see a similar pattern: higher GDP per capita means a greater life expectancy (see Figure 1 below). The OECD reports that 57% of the variation in life expectancy can be explained by the country’s GDP per capita when considering countries all around the globe [6]. However, if you look a little closer, you’ll notice that while the increase in life expectancy with GDP per capita is significant when GDP per capita is below about $40,000, above this, there doesn’t appear to be a meaningful relationship at all.

Why could this be? There could (and probably is) a whole host of reasons why; however, we will outline two notable ones here. The first is diminishing returns; as life expectancy is higher, it’s reasonable to expect that further increases will become more and more difficult to achieve. The second reason we present is that countries striving to improve GDP, which can improve population health, may be doing so through actions damaging population health. This idea has extended beyond health to include measures related to the environment and other wellbeing measures. This has been coined as GDP thinking by economist Joseph Stiglitz [12] and is partly why the Genuine Progress Indicator (GPI) [13] continues to gain traction as it’s designed to better capture a country’s overall wellbeing, as opposed to just economic wellbeing.

A specific recent example is Purdue Pharma, which produced OxyContin, whose massive profits boosted the United States’ GDP. However, they also marched the country into a heartbreaking Opioid Epidemic, killing over 600,000 of its citizens [14]. However, a culture of sacrificing leisure, downtime, and overall wellbeing for extra work hours could also be considered GDP-thinking.

This blog is the first in a two-part series. The second blog goes past population health and explores the current literature on GDP and population sleep. 

References

  1. ChatGPT 3.5, TD. Smithies, Editor. 2024, OpenAI: chat.openai.com.
  2. Kuznets, S., National Income, 1929-1932, in National Income, 1929-1932. 1934, NBER. p. 1-12.
  3. Buttonwood, What is the OECD?, T. Economist, Editor. 2017, The Economist: The Economist explains.
  4. Gross domestic product (GDP) (indicator), OECD, Editor. 2024, OECD: OECD Data.
  5. Life expectancy at birth (indicator), OECD, Editor. 2024, OECD: OECD Data.
  6. OECD, Life expectancy at birth and GDP per capita, 2015 (or nearest year), in Microsoft Excel, F. 3.2, Editor. 2017: Health at a Glance 2017: OECD indicators – © OECD
  7. UN World Population Prospects, Life expectancy at birth – alls, period, estimates. 2022: processed by Our World in Data.
  8. World Bank, GDP per capita – World Bank. 2023: with minor processing by Our World in Data.
  9. Gapminder, “Population (historical estimates)” [dataset]. Gapminder, “Population v7”; Gapminder, “Systema Globalis”; PBL Netherlands Environmental Assessment Agency, “HYDE 3.2”; United Nations, “World Population Prospects”. 2022: with major processing by Our World in Data.
  10. Our World in Data, “Continent” [dataset].
  11. Our World in Data, Life expectancy vs. GDP per capita, 2021. 2024, Our World in Data.
  12. Stiglitz, J., GDP Is the Wrong Tool for Measuring What Matters, S. American, Editor. 2020, Scientific American: Scientific American.
  13. Kubiszewski, I., et al., Beyond GDP: Measuring and achieving global genuine progress. Ecological Economics, 2013. 93: p. 57-68. https://doi.org/10.1016/j.ecolecon.2013.04.019.
  14. CDC. Understanding the Opioid Overdose Epidemic. Opioid Basics 2023  [cited 2024 08/01/2024]; Available from: https://www.cdc.gov/opioids/basics/epidemic.html#:~:text=From%201999%2D2021%2C%20nearly%20645%2C000,prescription%20and%20illicit%20opioids1.

Subscribe to our newsletter:

Subscribe for updates from Melius Consulting and research arm Sleep4Performance.

Recent Posts:

Past Newsletters: