Sure, it could be one of those things that's "the worst except for all the other options." It's still flawed, the flaws have been known for a long time, and their magnitude is potentially large enough to warrant looking for other indicators.
The S&P 500 describes the S&P 500 fine, but it seems like a much simpler problem? They represent an estimate of a future cash flow generated by a basket of companies. That's way more straightforward than measuring value perceived by consumers.
How does consumer surplus not exist? How would you value something like e.g. Wikipedia?
Stock market and GDP indices are generally the same in that they are sums of correlated time series. Summing suppresses uncorrelated variance (often measurement noise) and retains correlated variance. The index's returns are essentially the first principal component of the returns of the index memebrs. This is how the CAPM works – stocks are analyzed by factoring out their responsiveness to the market.
Stock market and GDP indices are also particularly related, as stock prices are tied to corporate earnings and corporate earnings are a major component of GDP.
GDP has nothing to do with human perception. It measures the productive capacity of civilization, which is a physical quantity.[1]
It's often claimed that if you give something like Wikipedia away for free, its value will not show up in GDP. In fact, if Wikipedia is valuable, it must have a positive impact on civilization. This will be reflected in GDP, even if it's in the form of extra time/money people spend on ice cream in the summertime.
The maximum someone would pay to access to Wikipedia is likewise irrelevant. For one thing, it's a function of their personal wealth, which is an unrelated quantity. But in any case, paying more than something costs to produce just increases the buying power of the people selling it... But it can't increase their buying power above what civilization can produce. It's a just a wealth transfer. Money can't defeat physics.
All of that is straightforward. What can be surprising (at first) is how well GDP measures human happiness,[2] drives wealth and income inequality,[2] and predicts election outcomes.[3][4][5] Economic peaks coincide with moon landings, complexity in popular music, the discovery of canonical physics, commercialization of computing technology, and various athletic records.[6]
The S&P 500 describes the S&P 500 fine, but it seems like a much simpler problem? They represent an estimate of a future cash flow generated by a basket of companies. That's way more straightforward than measuring value perceived by consumers.
How does consumer surplus not exist? How would you value something like e.g. Wikipedia?