The Genuine Progress Indicator vs GDP

[duncan drennan]

Redefining Progress has come up with what they call the GPI (genuine progress indicator) which they reckon would be a better measure of progress that the traditional GDP (gross domestic product).

We believe that if policymakers measure what really matters to people—health care, safety, a clean environment, and other indicators of well-being—economic policy would naturally shift towards sustainability.

Redefining Progress created the Genuine Progress Indicator (GPI) in 1995 as an alternative to the gross domestic product (GDP). The GPI enables policymakers at the national, state, regional, or local level to measure how well their citizens are doing both economically and socially.

Economists, policymakers, reporters, and the public rely on the GDP as a shorthand indicator of progress; but the GDP is merely a sum of national spending with no distinctions between transactions that add to well-being and those that diminish it.

The GPI is one of the first alternatives to the GDP to be vetted by the scientific community and used regularly by governmental and non-governmental organizations worldwide. Redefining Progress advocates for the adoption of the GPI as a tool for sustainable development and planning.

Here are the extra factors they take into account

• Income Distribution
• Housework, Volunteering, and Higher Education
• Crime
• Resource Depletion
• Pollution
• Long-Term Environmental Damage
• Changes in Leisure Time
• Defensive Expenditures
• Lifespan of Consumer Durables & Public Infrastructure
• Dependence on Foreign Assets

It is certainly worth reading through the reasons that they use these factors.

I would be really interested to see this worked out for South Africa.

I think that changing the way we measure "progress" could significantly change the way legislation is made, as well as improve our quality of life. What do you think?

[Dave A]

Is this related to the Happiness Index idea?

[duncan drennan]

Is this related to the Happiness Index idea?

Certainly seems to be along the same lines of thinking. Maybe the GPI has just been around a little longer (since 1995).