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
www.iiasa.ac.at
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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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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.
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