This thesis develops the argument that economic growth leads to an increase in Social Impoverishment. It also explores the related issue of the connection between Social Impoverishment and perceptions of quality of life. Relational Wealth, described as the quantity and quality of intimate nurturing relationships between individuals, lies at the heart of quality of life. Economic growth leads to a reduction in the quality of life through the negative cumulative impacts of Social Impoverishment.; An extended macroeconomic model is formulated to analyze the dynamics of economic, social and ecological factors. The thesis empirically tests the hypothesis that an increase in GDP leads to an increase in Social Impoverishment. GDP is measured primarily by material consumption, yet such consumption can not substitute for Relational Wealth. On the contrary, material consumption is a likely source of the decline in Relational Wealth.; The data on Social Impoverishment are extracted from various elements of the Index of Sustainable Economic Welfare. These are 40 years time series data for five countries, namely, Australia, Germany, Italy, United Kingdom and US. On the basis of these data an index of Social Impoverishment is developed. This index is then used to construct a revised estimate of ISEW which focuses on Social Welfare.; There are two versions of the empirical test. Social Impoverishment is defined as a function of GDP and its square. The coefficient of GDP is interpreted as “income effect” and that of its square as “affluence effect.” Similarly, the revised ISEW is postulated as a function of GDP and its square with similar interpretation. To test the coefficients for the revised ISEW, a further test is conducted by estimating the original ISEW as a function of the GDP and its square. The empirical results are satisfactory. Income effect is between three and five while the affluence effect is around minus 0.2. The thesis studies the meaningfulness and implications of these results.
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