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Despite several shortcomings GDP is commonly used as an indicator of social welfare. Most of the limitations are due to the fact that in essence the concept is not supposed to measure well-being. As a result, GDP fails to account for non-market transactions, wealth distribution, the effects of externalities, and the types of goods or services that are being produced within the economy. To compensate for these issues, different approaches to measuring welfare have been developed, including the Human Development Index (HDI), the Gross National Happiness Index (GNH), and the Social Progress Index (SPI).Raphael Zeder | Updated Jun 26, 2020 (Published Jan 28, 2015)