Two ways of measuring 160 years of economic growth in the United States

Economic growth is easy to understand: it means that people have access to goods and services of increasing quantity and quality.

What is hard, however, is to measure economic growth. This chart shows two ways of doing this for US growth over the past 160 years.

The purple lines represent a straightforward approach: each line tracks the share of households with access to one specific good or service. Starting from the top, you see the rising provision of basic infrastructure like running water, flush toilets, and electric power. You can also see the increasing availability of communication technology: radios, TVs, the Internet, and mobile phones. And further down, you see the rise of technologies that reduced work at home: vacuum cleaners, washing machines, dryers, and dishwashers.

This approach is very concrete; it shows practical ways in which the production and consumption of specific goods increased over time. The downside is that it only captures a limited number of particular goods. Millions of goods and services are produced and consumed, and most are not recorded with such precision.

A way to measure how people’s access to the full range of goods and services changes is to measure people’s incomes. This way of measuring growth is shown in the top left panel. The data on average income, here measured by GDP per capita, tells us that the average American was 13 times poorer in 1860 than in 2022 (adjusted for inflation).

These two ways of measuring economic growth have pros and cons: one is concrete but not comprehensive, the other is comprehensive but quite abstract. If we want to understand what growth means for our societies, I find it helpful to combine them both.

If you want to know more about this — and see how the inequality of incomes can be factored in — you can read my article: “What is economic growth? And why is it so important?” →

Where this page came from

This page was imported from Our World in Data. “Two ways of measuring 160 years of economic growth in the United States” by Max Roser, published by Our World in Data under CC BY 4.0. Changed here: set as a page, its interactive charts shown as pictures. Data from third parties keeps its own licence.

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