GDP DILEMMA ANALYZED IN TERMS OF CORRELATION BETWEEN LISBON INDEX AND GDP PER CAPITA

Abstract

The objective of this paper is to analyze the correlation between the index of Lisbon in 2010 and GDP per capita in 43 countries, in order to determine whether exist or not a direct and close correlation between the two indicators. The reason behind the initiation of this review is related to the current dilemma, namely whether the level of GDP reflects or not the degree of welfare of a country or region. If this is true, ie GDP provides an accurate picture of a country’s welfare level, there must be direct and strong correlation between two indicators: GDP per capita and Lisbon index. Otherwise, if the GDP is not a representative indicator of the level of welfare, the correlation should be reduced. Further analysis will show the result of that reasoning. Pearson coefficient was calculated, and it was obtained a value of 0.828 which means a strong and direct correlation between the two indicators, in a first phase. After analysis of the two clusters created can be concluded that in developing countries is a direct and strong correlation (Pearson coefficient is 0.703), while in developed countries there is direct correlation but unrepresentative (Pearson coefficient is 0.477).GDP, Lisbon Index, welfare, correlation