Measurable economic welfare

History

In 1972, William Nordhaus and James Tobin developed Measure of economic welfare (MEW).This adjusts GDP by adding leisure, unpaid housework and the value of services given by consumer durables over the year. Deductions are made for 'regrattables' such as expenditure on commuting to work, defence,the police, negative externalities including pollution, and expenditure on consumer durables. This is an interesting approach which seeks to cover more of the aspects which affect economic welfare although it has its own share of problems of having to attach a monetary value to non-marketed products.