Past national GPI studies have indicated that in many countries,
beyond a certain point, GDP growth no longer correlates with increased
economic welfare. An important function of GPI is to send up a red flag
at that point. Since it is made up of many benefit and cost components,
it also allows for the identification of which factors increase or decrease
economic welfare. Other indicators are better guides of specific aspects.
For example, Life Satisfaction is a bettermeasure of overall self-reported
happiness. By observing the change in individual benefit and cost components,
GPI revealswhich factors cause economicwelfare to rise or fall
even if it does not always indicate what the driving forces are behind
this. It can account for the underlying patterns of resource consumption,
for example, but may not pick up the self-reinforcing evolution of
markets or political power that drives change.