Economic growth and human well-being

Abstract

Most economists believe that economic growth is important to improve community well-being. Growth is thought to imply rising average incomes and living standards, and hence is assumed to contribute to increased well-being. This chapter provides an introduction to the key issues in understanding economic growth and its social and environmental impacts, examining the links between economic activity, environmental quality and human well-being in high income countries. Ecologically sustainable development draws attention to environmental resources and values, and their role in both improving the well-being of the poor of this generation and maintaining the basis of future well-being. The idea of well-being has a rich intellectual history, and may be interpreted in a number of ways. The most common notion of well-being focuses on desirable mental states. In high income countries, economic growth is at best a poor indicator of living standards, as it neglects non-economic impacts (such as pollution) and mistakenly interprets defensive expenditures as improvements.

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