Do you freak out when your maid throws something into the trash can? Well, you would be surprised to know that economists might be intrigued by this. There is something we call as the ‘Garbage Index’ which, contrary to the useless, unhealthy garbage, is very useful in indicating the health of an economy.
The Garbage Index looks at the amount of garbage produced and draws out economic inferences from the same about a country’s GDP. There are several things indicated such as the purchasing power of people, aggregate demand and population growth by the waste we produce.
One of the reasons due to which this index might be affected by increased garbage is the increase in purchasing power of the people. When people have less purchasing power they tend to avoid throwing away old things and purchasing new things thus creating less waste, but if they have high purchasing power, they produce more waste.
The garbage we produce also indicates our demand for a specific product and also our overall demand. In the sense that, if we demand more, we consume more and thus we produce more waste. If we love to drink coke, our garbage will comprise of more coke cans and indicate about our high demand of coke.
Another reason for increasing waste can be the rise in population. With rising population, consumption also rises and thus the garbage. This can be explained as follows: consider a rise in population given that a major part of the population is between the age of 1 month and 1 year, this means that are more infants in the population. With this the demand for diapers increases and thus the waste created by used diapers also rises, affecting the garbage index.
Therefore, an increase in garbage can simply indicate an increase in population or can indicate a much sought growth in the economy. But whatever it might be, the way we look at garbage is certainly bound to change now since waste is not a waste anymore!
Source(s):
-Jyotsana Thareja
Beyond Assumptions 