Introduction to Modern Economic Growth 10 USA LUX log consumption per capita 2000 ISL AUS GBR HKG DNK AUT NOR GER CHE IRL NLD BRB CAN JPN FRA FIN ITA NZL BEL ESP SWE GRC MUS ISR PRT TTO CZE MAC SVN KOR ARG URY SYC HUN KNA MEX POL CHLSVK ATG EST GAB TUN LTU HRV RUS LVA ZAF BLZ TUR LCA BRA KAZ BLR LBN MKD BGR GRD VENDMA SLV PAN ROM IRN EGY GEO COL DOM CRI THA VCT GTMPRY SWZ PER CPV MAR ALB MYS DZA UKR ARM GINLKA GNQ PHL JOR SYR IDN BOL MDA AZE ECU KGZ JAM CHN NICCMRZWE PAK HND CIV SEN COM BGD IND GMB GHA COG MOZBEN KEN NPL TJK STP LSO UGA MDG RWA TCD MLI MWI BFA NER ZMB TGO BDI GNB ETH YEM TZA NGA log gdp per capita 2000 10 11 Figure 1.5 The association between income per capita and consumption per capita in 2000 1.2 Income and Welfare Should we care about cross-country income differences? The answer is undoubtedly yes High income levels reflect high standards of living Economic growth might, at least over some range, increase pollution or raise individual aspirations, so that the same bundle of consumption may no longer make an individual as happy But at the end of the day, when one compares an advanced, rich country with a less-developed one, there are striking differences in the quality of life, standards of living and health Figures 1.5 and 1.6 give a glimpse of these differences and depict the relationship between income per capita in 2000 and consumption per capita and life expectancy at birth in the same year Consumption data also come from the Penn World