This paper reviews debates and practice around the conventional and alternative measures of economic well-being. The resource presents alternative aggregate indicators, broadly referred to as “Beyond GDP”, that track non-market contributions to well-being, including household production and ecosystem services.
Evaluating the major contending measures – the Genuine Progress Indicator, Human Development Index, Happiness/life evaluation index, Happy Planet Index, the OECD’s Better Life Initiative dashboard – the paper argues that the GPI is the only indicator that incorporates care for human beings and care for the environment in a single framework and is therefore best suited to guide policy in responding to the major challenges of our time – rising inequality, climate change, environmental destruction. GPI’s GDP-like features make it suitable to gauge economic performance, assess impact on measures of well-being, and examine evaluate proposed policies. Meanwhile, its dashboard-like features allow changes in contributing variables to be tracked in physical and monetary terms. Although GPI has high data demands, which make it difficult to estimate the full GPI for low-income countries, and an evolving methodology, the main obstacles to adopt the GPI are social and institutional, including lack of political leadership and institutional support.