Nov 04, 2022 07:00:00

Suggestions from scientists that Gross Domestic Product (GDP) is a misleading measure of a nation's success and that a different metric should be used

Gross domestic product (GDP) is a misleading measure of national success, and countries should adopt a new metric now, say Robert Costanza and colleagues from the Crawford School of Public Policy at the Australian National University. increase.

Development: Time to leave GDP behind | Nature
https://www.nature.com/articles/505283a

GDP was developed in the 1930s and 1940s, and the United Nations mandated data collection for each country to report its GDP. But even before that, Simon Kuznets , the inventor of GDP, warned against equating GDP growth with happiness.

GDP primarily measures market transactions, but ignores social costs, environmental impacts and income inequalities. As such, although GDP is considered unsuitable for the real world, in part because of the lack of a clear successor alternative, in almost all post-World War II nations promoting GDP growth is a national goal. considered to be the main goal of the policy.

Meanwhile, researchers have been able to estimate the environmental and social impacts of GDP growth, as well as the impact of income inequality, and many experiments have since produced alternative measures of GDP.

One of them is the ' Sustainable Development Goals (SDGs) ' compiled by the United Nations in 2015. Developing new metrics to accompany these goals could help stop the growing inequalities and continued environmental destruction.

Three groups of growth indicators have been identified as alternatives to GDP.

◆1: Adjusted economic indicators
The 'True Progress Index' (GPI) is calculated by performing various calculations that take into account factors such as the value of volunteer work, divorce, crime and pollution, in addition to

personal consumption expenditure , which is the main component of GDP. It is an indicator that With this indicator, environmental issues can be taken into account while considering annual income, net income and wealth.

◆2: Subjective measures of happiness
The World Values Survey (WVS) asks about 70 countries about how satisfied they are with their lives. Subjective happiness surveys are considered to be the most appropriate indicators for measuring social progress, but on the other hand, it is said to be difficult to compare across societies and cultures. The Happiness of the Planet Index (HPI), released in 2006, integrates subjective and objective measures by multiplying life satisfaction by life expectancy and dividing by an indicator of ecological impact. It is said that it can be done.

◆3: Composite Happiness Index
The Better Life Index (BLI) is an index that combines various variables such as income, housing, employment, health, civic life, safety and life satisfaction. The BLI reveals the impact of different variable weightings.

Researchers explain that by judging these indicators collectively, it is possible to construct a much better indicator than GDP.

Regarding the successor to GDP, Robert Costanza et al. It should be a collection of new metrics that integrate knowledge.”