Gross domestic product, or GDP, is the market value of final goods and services produced within a country’s borders during a period. GDP per person divides that output by population. It offers a rough measure of average economic production, but it does not show how income is distributed, whether work is safe, how much unpaid care occurs, or whether production damages health and the environment.

Gross national income, or GNI, follows income received by a country’s residents and businesses, including some income flowing across borders. The difference between GDP and GNI matters where foreign-owned companies produce large output but send profits abroad, or where residents earn substantial income in other countries.

Currency conversion can distort comparison because the same amount of money buys different bundles of goods in different places. Purchasing power parity, or PPP, adjusts for differences in local prices. A PPP-adjusted income is often better for comparing living standards. A market-exchange-rate measure may be more relevant when a country must buy imported medicine or repay debt in a foreign currency. The best measure depends on the question.

The Human Development Index, or HDI, combines income with education and life expectancy. It broadens development beyond production. It still compresses varied lives into one national score and can hide inequality by gender, region, class, race, ethnicity, disability, or citizenship. A national average can rise while a remote region loses clinics or a minority group faces persistent school exclusion.

Health measures add another view. Life expectancy estimates the average years a newborn would live if current mortality patterns continued. Infant mortality counts deaths before age one per 1,000 live births. Both reflect medical care and the wider conditions of nutrition, sanitation, housing, pollution, maternal health, violence, and public infrastructure.

Measures also depend on data capacity. Births, deaths, informal work, displacement, and unpaid production may be undercounted where registration systems are incomplete or where people avoid authorities. Missing data are often socially patterned. The groups easiest to overlook may already have the least institutional power.

Quick review: Name the question before choosing the measure. Production within borders points to GDP. Residents’ income points to GNI. Local purchasing power points to PPP. Health, schooling, and income together point to HDI. None of these numbers reveals distribution by itself.

Watch the lesson connection

Theories of Global Stratification gives you a second explanation of the ideas surrounding this lesson. As you watch, pause when the lesson concept appears and explain how the example fits.

Try the idea yourself

Write one original example, one close nonexample, and one observation that would help you tell them apart. That small exercise turns a definition into a sociological tool you can use in daily life.