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The most widely used measure of economic welfare is real GDP per capita. However, this does have a number of significant defects most importantly the failure to account for negative externalities. For example, cigarette production is valued at the value of the cigarettes produced but makes no allowance for the costs to the smoker and to the NHS. A further example of this is the environmental costs of economic activity which are not deducted from the value of output. Similarly there are unpriced benefits which are not added to the value of output.
marlinbito answered the question on July 5, 2018 at 13:19
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