What are the Alternatives to GDP as a Measure of Growth?
Alternative measures to GDP provide a broader perspective of progress, including happiness (GNH), social well-being (SPI), environmental impact (Ecological Footprint), and human development (HDI). They offer a more comprehensive assessment of societal advancement.
While Gross Domestic Product (GDP) has traditionally been used as a primary measure of economic growth, there are several alternative metrics that have been proposed to provide a more comprehensive and nuanced understanding of economic progress. Some of these alternatives include:
Gross National Happiness (GNH): Developed by the Kingdom of Bhutan, GNH measures the overall well-being and happiness of a nation's citizens rather than focusing solely on economic indicators. It considers factors such as psychological well-being, social support, environmental sustainability, and cultural preservation.
Genuine Progress Indicator (GPI): The GPI attempts to measure the economic progress of a nation while taking into account social and environmental factors. It adjusts GDP by incorporating factors such as income distribution, household production, the value of unpaid work, resource depletion, and environmental damage.
Human Development Index (HDI): Developed by the United Nations Development Programme (UNDP), the HDI combines indicators of health, education, and income to provide a broader measure of human well-being. It considers factors such as life expectancy, education attainment, and gross national income per capita.
Ecological Footprint: This metric measures the impact of human activity on the environment by quantifying the amount of natural resources required to sustain a population or economic activity. It considers factors such as energy consumption, carbon emissions, water usage, and land use.
Social Progress Index (SPI): The SPI provides a comprehensive assessment of social and environmental well-being. It includes indicators related to basic human needs, foundations of well-being (e.g., access to healthcare and education), and opportunities for individuals to reach their full potential.
Bhutan's Index of Gross National Happiness (IGNH): Inspired by GNH, IGNH measures the happiness and well-being of individuals within a nation. It includes indicators such as psychological well-being, health, education, time use, community vitality, cultural diversity, ecological resilience, and living standards.
Wellbeing-adjusted Life Years (WELLBY): WELLBY combines life expectancy with measures of subjective well-being to assess the overall quality of life. It focuses on individuals' health, happiness, and life satisfaction, considering both physical and mental well-being.
These alternative metrics aim to provide a more holistic view of societal progress by considering factors beyond purely economic indicators like GDP. While they offer valuable insights, their implementation and acceptance vary across countries and organisations, and none of them has gained universal adoption.