Additional Indicators for Wellbeing
How Else Can We Measure Economic Wellbeing?
Economists have long used many indicators of economic wellbeing to supplement the use of GDPOpens in new window. These include:
- hours per week, leisure time, income distribution, longevity, health, education and a number of other indicators.
However, in recent years many of these indicators have been combined to produce more formal economic frameworks used to measure wellbeing.
These measures still incorporate GDP as an important indicator of economic progress, but also include additional indicators of wellbeing, quality of life and economic sustainability.The Australian Bureau of Statistics Opens in new window produces the Measure of Australia’s Progress (MAP), which measures key statistics in three broad groupings—society, the economy and the environment.
It uses 17 main indicators and around 80 indicators in total.
These indicators provide measures of health, education, unemployment, housing availability and cost, forest and fauna conservation, greenhouse gas emissions, health of oceans and rivers, waste management, life satisfaction, victims of crime, family and social cohesion, democracy and governance, productivity, national income and national wealth.
The Australian Treasury Opens in new window produces a Wellbeing Framework, which includes measures of freedom, current and future opportunity and the distribution of opportunity, choice, consumption levels and the distribution of consumption, risk and the complexity of life.
Many other countries have moved, or are moving, to similarly broader indicators of economic wellbeing.
For example, in 2008 the then French President, Mr Nicolas Sarkozy, commissioned a number of the world’s most renowned economists and social scientists, including Economics Nobel Prize winners Joseph Stiglitz and Amartya Sen, to develop the means of measuring wellbeing and economic sustainability.
Their work was released in a major report in 2009, Report by the Commission on the Measurement of Economic Performance and Social Progress (or the Stiglitz Report).
The United Nations has been producing a measure of the standard of living since 1990, called the Human Development Index (HDI).
The HDI combines data on real GDP per person with data on life expectancy at birth, adult literacy and school enrolment.
This index is published annually in the United Nation’s Human Development Report, which is a study that provides information on the standard of living in nearly every country in the world.
Some researchers have also developed indexes to measure life satisfaction and happiness, and there are numerous measures of environmental quality and its relation to wellbeing.
