Date: 2024-04-28 Page is: DBtxt003.php txt00002970
Metrics
Genuine Progress Indicator (GPI)
Maryland's Genuine Progress Indicator
COMMENTARY
Peter Burgess
Maryland's Genuine Progress Indicator
Maryland developed its Genuine Progress Indicator to measure how development activities impact long-term prosperity, both positively and negatively. Here in Maryland and across the globe, people are continually challenged by the need to find a balance between advancing economic gain and ensuring social well-being.
Traditional indicators like the Gross Domestic/State Products address only economic transactions. They do not include the environmental and social costs of what we buy, the quality of life impacts of how we live, or fully appreciate the significant contributions of our natural systems.
We invite you to learn how we developed our GPI, find out how Maryland is doing in 26 different indicators, and explore a model to see how policy decisions made today may affect future generations.
Described by its authors, the Genuine Progress Indicator (GPI) provides citizens and policymakers fruitful insight by recognizing economic activity that diminishes both natural and social capital. Further, the GPI is designed to measure sustainable economic welfare rather than economic activity alone. To accomplish this, the GPI uses three simple underlying principles for its methodology: account for income inequality, include non-market benefits that are not included in the Gross Domestic Product, and identify and deduct bads such as environmental degradation, human health effects, and loss of leisure time.
The GPI developers identified 26 indicators and then populate them with verifiable data. As one example, the pure economic activity stemming from the explosive growth of urban sprawl contributes greatly to the GSP. Yet, along with sprawl come increased commuting time, increased traffic congestion, land use conversion, and automobile impacts. In short, just because we are exchanging money within an economy does not necessarily mean that we are sustainable or prosperous.
In the effort of the GPI to measure prosperity, though, there are of course inherent challenges. The most obvious is, how do we quantify the unquantifiable? First, what are the indicators of social well-being? Next, how do we calculate such indicators? That is, what really is the cost of crime? What is the value of wetlands? Of forests? How do we measure human health? To answer, while the identification of each indicator is subjective, the use of cited, nationally accepted data and peer-reviewed studies lends considerable credibility. Because of this and its long track record, many countries and national jurisdictions have used the GPI as a construct and included indicators and data to assist policymakers as they guide their communities to the future.
Origins of the GPI
The precursors to the current Genuine Progress Indicator were the Measured Economic Welfare (MEW) and the Index of Sustainable Economic Welfare (ISEW). In 1972, American economists William Nordhaus and Nobel Prize winner James Tobin developed the Measured Economic Welfare (MEW) in an attempt to answer if growth was obsolete. Ecological economist Herman Daly (currently at the University of Maryland, College Park) and theologian John Cobb picked up their work nearly two decades later as they investigated how to develop a macro measure of welfare by creating the Index of Sustainable Economic Welfare (ISEW).
The following are the 26 Indicators that calculate the Maryland Genuine Progress Indicator. Select an Indicator to learn more about the topic, why it is included, and how Maryland is doing.
Economic indicators
- Personal consumption expenditure
- Income inequality
- Adjusted personal consumption
- Services of consumer durables
- Cost of consumer durables
- Cost of unemployment
- Net capital investment
- Cost of water pollution
- Cost of air pollution
- Cost of noise pollution
- Cost of net wetlands change
- Cost of net farmland change
- Cost of net forest cover change
- Cost of climate change
- Cost of ozone depletion
- Cost of mon-renewable energy resource depletion
- Value of housework
- Cost of family changes
- Cost of crime
- Cost of personal pollution abatement
- Value of volunteer work
- Cost of leasure time
- Value of higher education
- Services of highway and streets
- Cost of commujting
- Cost of motor vehicle crashes