The Economist has an interesting article on a recent paper by Robert Gordon, an economist at Northwestern. The article has a link to the full paper for my hardcore economics readers. As someone who travels there regularly, I have always been uncomfortable with standard economic analyses that show that Europe is much poorer than us, because I just don't see it, even ignoring the median vs. mean issues involved in comparing countries with radically different wealth distribution profiles.

A significant part of his argument is that GDP is so bad at measuring things like quality of life. Our spending on air conditioning and heat, because our climate is harsher, counts towards our higher GDP. So does our inefficient transportation system -- we spend more on cars and roads rather than on public transit -- and the fact that we spend much more on home and business security plus prisons, since we have a much higher crime rate.