GDP is not a simple measure, YoGL is simple and straightforward

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LUTZ Wolfgang

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Mar 18, 2022, 4:17:16 PMMar 18
to pernse...@ciesin.columbia.edu, SMITH,David

Dear David,


Thanks for your great comment. I agree with all the points you make, except for the one that GDP is “easy to measure”.


GDP is a not a simply measure, quite the opposite. It requires a lot of empirical data and is very complex to calculate. In the words of Diane Coyle (2014): "The actual number for GDP is, therefore, the product of a vast patchwork of statistics and a complicated set of processes carried out on the raw data to fit them to the conceptual framework." There are also different approaches to estimate GDP based on production, income or expenditure. While in theory they should give the same number, in practice they don't. National Accounts have developed over the past 70-80 years and in every country it requires whole departments in the statistics offices of ministries of finance to calculate GDP.  – Compared to this YoGL is really simple and straightforward.


The main difference is – as you say – that there is an existing infrastructure because over the years international institutions such as IMF and the World Bank as well national governments have invested incredible sources into building up systems of national accounts in each country while almost nothing has been invested in getting data for alternative indicators of wellbeing. Actually, very little would be needed to regularly estimate YoGLs for all countries based on already existing survey instruments. But at the moment, these instruments are not coordinated and for this reason we had to take different dimensions of YoGL mostly from different surveys. If an international agreement could be reached to include the small number of just 3-4 standard questions (on physical and cognitive health, poverty and life satisfaction) in identical form in a large number of already ongoing surveys -which often try to measure similar things with somewhat different questions asked - YoGL could be routinely calculated for all countries and many relevant sub-populations at very little or no cost.  What is needed is the will to do so.


And a first step towards achieving this would be a broad-based agreement that this is indeed a desirable direction to move. This will not be easy since so many institutions have developed their own indicators of wellbeing (in the PNAS paper we discuss 31, but there are many more) and may be reluctant to move to something else. On the other hand the benefits of having a broadly used, globally comparable and widely accepted indicator should be evident.


May be this cyber seminar can help to move into this direction. What do the others think?

 

Best

Wolfgang 



Prof. Wolfgang Lutz
Founding Director, Wittgenstein Centre for Demography and Global Human Capital (IIASA, OeAW, University of Vienna)

Senior Program Advisor, Population and Just Societies Program (IIASA),
Director, Vienna Institute of Demography (VID), Austrian Academy of Sciences,
Professor of Demography and head of Department of Demography, University of Vienna

Address IIASA: Schlossplatz 1, A-2361 Laxenburg, Austria
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See our new global data and scenarios http://dataexplorer.wittgensteincentre.org/wcde-v2/

Tom Dietz

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Mar 19, 2022, 6:38:30 PMMar 19
to LUTZ Wolfgang, pernse...@ciesin.columbia.edu, SMITH,David
In the environmental sociology community, there is a line of research that argues that sustainability can be thought of in terms of producing human well-being with minimal damage to the environment.  (Of course this is anthropocentric.)  In this line of analysis, with a few dozen papers looking at how inequality, political economy, etc influence this relationship, the most commonly used measure of human well-being is life expectancy at birth.  I will do what I can to make the community aware of YoGL in the hopes they will explore it.

Best
Tom

A few of the key papers are:
Dietz, Thomas, Eugene A Rosa and Richard York. 2009. "Environmentally Efficient Well-Being: Rethinking Sustainability as the Relationship between Human Well-Being and Environmental Impacts." Human Ecology Review 16(1):113-22.
Dietz, Thomas. 2015. "Prolegomenon to a Structural Human Ecology of Human Well-Being." Sociology of Development 1(1):123-48.
Jorgenson, Andrew K. 2014. "Economic Development and the Carbon Intensity of Human Well-Being." Nature Climate Change 4(3):186-89. doi: 10.1038/nclimate2110
http://www.nature.com/nclimate/journal/v4/n3/abs/nclimate2110.html#supplementary-information.
Jorgenson, Andrew K and Thomas Dietz. 2015. "Economic Growth Does Not Reduce the Ecological Intensity of Human Well-Being." Sustainability Science 10(1):149-56. doi: DOI 10.1007/s11625-014-0264-6.

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Thomas Dietz

 

-University Distinguished Professor of Environmental Science and Policy, Sociology and Animal Studies

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Michigan State University

-Gund Affiliate, Gund Institute for the Environment, University of Vermont

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Alex de Sherbinin

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Mar 19, 2022, 6:58:21 PMMar 19
to LUTZ Wolfgang, pernse...@ciesin.columbia.edu, SMITH,David
There is a good discussion of GDP in the context of sustainability indicators in the article "Sustainability Indicators Past and Present: What Next?" by Simon Bell and Stephen Morse. I quote one paragraph here, about the attempts to topple GDP from its pedestal. 

"Dahl, in his chapter on the Contributions to the “Evolving Theory and Practice of Indicators
of Sustainability” [13], reiterated the need for alternative indicators to GDP and suggests material
flow analysis as an integrating approach in sustainability assessment. There are echoes here with
an intriguing call for a “New Bretton Woods” to help achieve a broad consensus regarding alternative
indicators to allow us to move beyond GDP and achieve “measures of what we really want and to achieve
these goals” [14]. However, while the “New Bretton Woods” idea is tantalizing, these calls to explore
alternatives to GDP have been with us for some years with little obvious success to date. Indeed,
one of the rationales for the HDI was as a counter-weight to the economic-based indicators that were
perceived by the United Nations Development Programme (UNDP) to be so dominant in assessing
development. Nonetheless, economic-based indicators still dominate in a world desperate to see the
return of economic growth and prosperity. We flag this issue to contribute to the amassing weight of
evidence that GDP does not provide the necessary or sufficient resilience for twenty first century needs.
However, the question is arguably not whether other indicators are needed but what they should be
and how to get them accepted in the light of experience to date."

I agree with you, Wolfgang, that it is hard to reach consensus. HDI has perhaps come closest of all alternative indicators of progress to unseating GDP. UNDP now has a Planetary Pressures Adjusted HDI, that as its name implies adjusts HDI scores downwards for those high performing countries that have the greatest impacts on the global environment. Yet it appears to be a one off effort.

I find your arguments in favor of YoGL quite compelling. Perhaps you should present YoGL at Davos, or make a pitch to the World Bank?

Alex

On Fri, Mar 18, 2022 at 4:17 PM LUTZ Wolfgang <lu...@iiasa.ac.at> wrote:
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Alex de Sherbinin, PhD   (he/him/his)
Associate Director, Science Applications Division and Senior Research Scientist
Deputy Manager, NASA Socioeconomic Data and Applications Center (SEDAC)
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Tom Dietz

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Mar 20, 2022, 10:33:10 AMMar 20
to Alex de Sherbinin, LUTZ Wolfgang, pernse...@ciesin.columbia.edu, SMITH,David

Kuznets, one of the developers of GDP, noted “The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income as defined above.” In a section entitled “Uses and Abuses of National Income Measurements” Kuznets raises a prescient series of cautions about the limits of GNP and related measures when used for decision making.

Kuznets, Simon. 1934. "National Income, 1929-1932." Washington, D.C.: Government Printing Office.


SMITH,David

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Apr 20, 2022, 1:32:43 PMApr 20
to Tom Dietz, Alex de Sherbinin, LUTZ Wolfgang, pernse...@ciesin.columbia.edu, David Smith
I agree, YoGL is a good measure, maybe a few examples showing it being applied to subnational groupings in developing and developed countries could help others see its usefulness and applicability.

David C. Smith,
Director, Centre for Environmental Management,
Coordinator, Institute for Sustainable Development
The University of the West Indies

From: Tom Dietz <tdie...@gmail.com>
Sent: Saturday, 19 March 2022 19:39
To: Alex de Sherbinin <adeshe...@ciesin.columbia.edu>
Cc: LUTZ Wolfgang <lu...@iiasa.ac.at>; pernse...@ciesin.columbia.edu <pernse...@ciesin.columbia.edu>; David Smith <david....@uwimona.edu.jm>
Subject: Re: [PERN Cyberseminar] GDP is not a simple measure, YoGL is simple and straightforward
 
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