[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/30851.html
   My bibliography  Save this paper

Sustainability and well-being indicators

Author

Listed:
  • Neumayer, Eric
Abstract
This paper provides a review and critical discussion of indicators, which attempt to combine the measurement of sustainability with that of well-being. It starts with some commonly agreed definitions of sustainability, showing how most well-being indicators tell us little if anything at all about this issue. Sustainability is most commonly defined in economics as non-declining utility or well-being over time. Yet, due to its future orientation, most indicators of sustainability such as Genuine Savings (GS) have merely focused on the capacity to provide utility in the future, but have not included the measurement of current well-being. Indicators of well-being such as the Human Development Index (HDI), on the other hand, have typically failed to account for sustainability in their measurement of current well-being. The paper then critically reviews the Index of Sustainable Economic Welfare (ISEW) and the Genuine Progress Indicator (GPI), which are the most prominent examples of an indicator, which attempts to fully integrate the measurement of welfare with that of sustainability into one single indicator. Such an integration, whilst seemingly attractive, is rendered difficult by the fact that what contributes to current well-being need not contribute at all or in the same way to sustainability and vice versa. We also review various proposals of extending a welfare indicator, namely the HDI, with sustainability considerations without full integration of both concepts. All of these proposals suffer from a range of fundamental conceptual problems. As one possible alternative, we propose a combination of the HDI and GS, which holds great promise for an assessment of wellbeing and its sustainability, particularly in developing countries.

Suggested Citation

  • Neumayer, Eric, 2004. "Sustainability and well-being indicators," LSE Research Online Documents on Economics 30851, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:30851
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/30851/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Anand, Sudhir & Sen, Amartya, 2000. "Human Development and Economic Sustainability," World Development, Elsevier, vol. 28(12), pages 2029-2049, December.
    2. Kenneth J. Arrow & Partha Dasgupta & Karl-Göran Mäler, 2003. "The genuine savings criterion and the value of population," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 21(2), pages 217-225, March.
    3. Hamilton, Clive, 1999. "The genuine progress indicator methodological developments and results from Australia," Ecological Economics, Elsevier, vol. 30(1), pages 13-28, July.
    4. William D. Nordhaus & James Tobin, 1973. "Is Growth Obsolete?," NBER Chapters, in: The Measurement of Economic and Social Performance, pages 509-564, National Bureau of Economic Research, Inc.
    5. Kirk Hamilton, 1996. "Pollution And Pollution Abatement In The National Accounts," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(1), pages 13-33, March.
    6. Mark McGillivray & Howard White, 1993. "Measuring development? The UNDP's human development index," Journal of International Development, John Wiley & Sons, Ltd., vol. 5(2), pages 183-192, March.
    7. Geir Asheim, 2004. "Green national accounting with a changing population," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 23(3), pages 601-619, March.
    8. Lars Osberg & Andrew Sharpe, 2002. "International Comparisons of Trends in Economic Well-being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 58(1), pages 349-382, June.
    9. Hamilton, Kirk, 2000. "Sustaining economic welfare : estimating changes in per capita wealth," Policy Research Working Paper Series 2498, The World Bank.
    10. Dasgupta, Partha, 2001. "Valuing Objects and Evaluating Policies in Imperfect Economies," Economic Journal, Royal Economic Society, vol. 111(471), pages 1-29, May.
    11. Eric Neumayer, 1999. "The ISEW -- not an Index of Sustainable Economic Welfare," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 48(1), pages 77-101, September.
    12. Neumayer, Eric, 2000. "In defence of historical accountability for greenhouse gas emissions," Ecological Economics, Elsevier, vol. 33(2), pages 185-192, May.
    13. Eric Neumayer, 2013. "Weak versus Strong Sustainability," Books, Edward Elgar Publishing, number 14993.
    14. Neumayer, Eric, 2001. "The human development index and sustainability -- a constructive proposal," Ecological Economics, Elsevier, vol. 39(1), pages 101-114, October.
    15. Max-Neef, Manfred, 1995. "Economic growth and quality of life: a threshold hypothesis," Ecological Economics, Elsevier, vol. 15(2), pages 115-118, November.
    16. Stockhammer, Engelbert & Hochreiter, Harald & Obermayr, Bernhard & Steiner, Klaus, 1997. "The index of sustainable economic welfare (ISEW) as an alternative to GDP in measuring economic welfare. The results of the Austrian (revised) ISEW calculation 1955-1992," Ecological Economics, Elsevier, vol. 21(1), pages 19-34, April.
    17. Neumayer, Eric, 2000. "On the methodology of ISEW, GPI and related measures: some constructive suggestions and some doubt on the 'threshold' hypothesis," Ecological Economics, Elsevier, vol. 34(3), pages 347-361, September.
    18. Schmidt-Hebbel, Klaus & Serven, Luis, 2000. "Does income inequality raise aggregate saving?," Journal of Development Economics, Elsevier, vol. 61(2), pages 417-446, April.
    19. repec:reg:rpubli:132 is not listed on IDEAS
    20. Eisner, Robert, 1988. "Extended Accounts for National Income and Product," Journal of Economic Literature, American Economic Association, vol. 26(4), pages 1611-1684, December.
    21. Nicholas Crafts, 2002. "UK Real National Income, 1950-1998: Some Grounds for Optimism," National Institute Economic Review, National Institute of Economic and Social Research, vol. 181(1), pages 87-95, July.
    22. M.C. de la Vega & A.M. Urrutia, 2001. "HDPI: A Framework for Pollution-Sensitive Human Development Indicators," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 3(3), pages 199-215, September.
    23. Farhad Noorbakhsh, 1998. "The human development index: some technical issues and alternative indices," Journal of International Development, John Wiley & Sons, Ltd., vol. 10(5), pages 589-605.
    24. Michael Hagerty & Robert Cummins & Abbott Ferriss & Kenneth Land & Alex Michalos & Mark Peterson & Andrew Sharpe & Joseph Sirgy & Joachim Vogel, 2001. "Quality of Life Indexes for National Policy: Review and Agenda for Research," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 55(1), pages 1-96, July.
    25. Martin L. Weitzman, 1997. "Sustainability and Technical Progress," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(1), pages 1-13, March.
    26. M. Qizilbash, 2001. "Sustainable Development: Concepts and Rankings," Journal of Development Studies, Taylor & Francis Journals, vol. 37(3), pages 134-161.
    27. Smith, Douglas, 2001. "International evidence on how income inequality and credit market imperfections affect private saving rates," Journal of Development Economics, Elsevier, vol. 64(1), pages 103-127, February.
    28. Hamilton, Kirk, 1994. "Green adjustments to GDP," Resources Policy, Elsevier, vol. 20(3), pages 155-168, September.
    29. Sagar, Ambuj D. & Najam, Adil, 1998. "The human development index: a critical review," Ecological Economics, Elsevier, vol. 25(3), pages 249-264, June.
    30. Castaneda, Beatriz E., 1999. "An index of sustainable economic welfare (ISEW) for Chile," Ecological Economics, Elsevier, vol. 28(2), pages 231-244, February.
    31. Lars Osberg & Andrew Sharpe, 2002. "An Index of Economic Well–Being for Selected OECD Countries," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(3), pages 291-316, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Menegaki, Angeliki N. & Marques, António Cardoso & Fuinhas, José Alberto, 2017. "Redefining the energy-growth nexus with an index for sustainable economic welfare in Europe," Energy, Elsevier, vol. 141(C), pages 1254-1268.
    2. Clio Kenterelidou & Fani Galatsopoulou, 2021. "Sustainable Biocultural Heritage Management and Communication: The Case of Digital Narrative for UNESCO Marine World Heritage of Outstanding Universal Value," Sustainability, MDPI, vol. 13(3), pages 1-32, January.
    3. Arman, Michael & Zuo, Jian & Wilson, Lou & Zillante, George & Pullen, Stephen, 2009. "Challenges of responding to sustainability with implications for affordable housing," Ecological Economics, Elsevier, vol. 68(12), pages 3034-3041, October.
    4. Brennan, Andrew John, 2008. "Theoretical foundations of sustainable economic welfare indicators -- ISEW and political economy of the disembedded system," Ecological Economics, Elsevier, vol. 67(1), pages 1-19, August.
    5. Shmelev, Stanislav E., 2011. "Dynamic sustainability assessment: The case of Russia in the period of transition (1985-2008)," Ecological Economics, Elsevier, vol. 70(11), pages 2039-2049, September.
    6. Brennan, Andrew John, 2013. "A critique of the perceived solid conceptual foundations of ISEW & GPI — Irving Fisher's cognisance of human-health capital in ‘net psychic income’," Ecological Economics, Elsevier, vol. 88(C), pages 159-166.
    7. Giulia Grisolia & Umberto Lucia & Marco Filippo Torchio, 2022. "Sustainable Development and Workers Ability: Considerations on the Education Index in the Human Development Index," Sustainability, MDPI, vol. 14(14), pages 1-18, July.
    8. Ollivier, TO, 2009. "The usefulness of aggregate sustainability indicators for policy making: What do they say for Madagascar?," MPRA Paper 16607, University Library of Munich, Germany.
    9. Cook, David & Davidsdottir, Brynhildur & Petursson, Jón Geir, 2015. "Accounting for the utilisation of geothermal energy resources within the genuine progress indicator—A methodological review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 211-220.
    10. Marc Fleurbaey & Guillaume Gaulier, 2009. "International Comparisons of Living Standards by Equivalent Incomes," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(3), pages 597-624, September.
    11. Marc Fleurbaey, 2009. "Beyond GDP: The Quest for a Measure of Social Welfare," Journal of Economic Literature, American Economic Association, vol. 47(4), pages 1029-1075, December.
    12. Undp, 2011. "HDR 2011 - Sustainability and Equity: A Better Future for All," Human Development Report (1990 to present), Human Development Report Office (HDRO), United Nations Development Programme (UNDP), number hdr2011, September.
    13. Angeliki N. Menegaki, 2021. "Towards a Global Energy-Sustainable Economy Nexus; Summing up Evidence from Recent Empirical Work," Energies, MDPI, vol. 14(16), pages 1-16, August.
    14. Dietz, Simon & Neumayer, Eric, 2007. "Weak and strong sustainability in the SEEA: Concepts and measurement," Ecological Economics, Elsevier, vol. 61(4), pages 617-626, March.
    15. Mock, Mirijam & Omann, Ines & Polzin, Christine & Spekkink, Wouter & Schuler, Julia & Pandur, Vlad & Brizi, Ambra & Panno, Angelo, 2019. "“Something inside me has been set in motion”: Exploring the psychological wellbeing of people engaged in sustainability initiatives," Ecological Economics, Elsevier, vol. 160(C), pages 1-11.
    16. V. K. Shrotryia & Shashank Vikram Pratap Singh, 2020. "Measuring Progress Beyond GDP: A Theoretical Perspective," Emerging Economy Studies, International Management Institute, vol. 6(2), pages 143-165, November.
    17. O'Mahony, Tadhg & Escardó-Serra, Paula & Dufour, Javier, 2018. "Revisiting ISEW Valuation Approaches: The Case of Spain Including the Costs of Energy Depletion and of Climate Change," Ecological Economics, Elsevier, vol. 144(C), pages 292-303.
    18. Tauhidur Rahman & Ron C. Mittelhammer & Philip Wandschneider, 2005. "Measuring the Quality of Life Across Countries: a Sensitivity Analysis of Well-Being Indices," WIDER Working Paper Series RP2005-06, World Institute for Development Economic Research (UNU-WIDER).
    19. Marco Filippo Torchio & Umberto Lucia & Giulia Grisolia, 2020. "Economic and Human Features for Energy and Environmental Indicators: A Tool to Assess Countries’ Progress towards Sustainability," Sustainability, MDPI, vol. 12(22), pages 1-19, November.
    20. Talberth, John & Weisdorf, Michael, 2017. "Genuine Progress Indicator 2.0: Pilot Accounts for the US, Maryland, and City of Baltimore 2012–2014," Ecological Economics, Elsevier, vol. 142(C), pages 1-11.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Philip Lawn, 2007. "A Stock-Take of Green National Accounting Initiatives," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 80(2), pages 427-460, January.
    2. Lawn, Philip A., 2003. "A theoretical foundation to support the Index of Sustainable Economic Welfare (ISEW), Genuine Progress Indicator (GPI), and other related indexes," Ecological Economics, Elsevier, vol. 44(1), pages 105-118, February.
    3. Adrian Boos, 2015. "Genuine Savings as an Indicator for “Weak” Sustainability: Critical Survey and Possible Ways forward in Practical Measuring," Sustainability, MDPI, vol. 7(4), pages 1-37, April.
    4. Mirko Armiento, 2016. "The Sustainable Welfare Index for Italy, 1960-2013," Working Papers 1601, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2016.
    5. Armiento, Mirko, 2018. "The Sustainable Welfare Index: Towards a Threshold Effect for Italy," Ecological Economics, Elsevier, vol. 152(C), pages 296-309.
    6. Posner, Stephen M. & Costanza, Robert, 2011. "A summary of ISEW and GPI studies at multiple scales and new estimates for Baltimore City, Baltimore County, and the State of Maryland," Ecological Economics, Elsevier, vol. 70(11), pages 1972-1980, September.
    7. Daniel Ştefan Armeanu & Georgeta Vintilă & Ştefan Cristian Gherghina, 2017. "Empirical Study towards the Drivers of Sustainable Economic Growth in EU-28 Countries," Sustainability, MDPI, vol. 10(1), pages 1-22, December.
    8. Pulselli, Federico M. & Bravi, Mirko & Tiezzi, Enzo, 2012. "Application and use of the ISEW for assessing the sustainability of a regional system: A case study in Italy," Journal of Economic Behavior & Organization, Elsevier, vol. 81(3), pages 766-778.
    9. Bleys, Brent & Whitby, Alistair, 2015. "Barriers and opportunities for alternative measures of economic welfare," Ecological Economics, Elsevier, vol. 117(C), pages 162-172.
    10. Luke McGrath & Stephen Hynes & John McHale, 2022. "The Air we Breathe: Estimates of Air Pollution Extended Genuine Savings for Europe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(1), pages 161-188, March.
    11. Pulselli, Federico Maria & Ciampalini, Francesca & Tiezzi, Enzo & Zappia, Carlo, 2006. "The index of sustainable economic welfare (ISEW) for a local authority: A case study in Italy," Ecological Economics, Elsevier, vol. 60(1), pages 271-281, November.
    12. Clarke, Matthew & Islam, Sardar M.N., 2005. "Diminishing and negative welfare returns of economic growth: an index of sustainable economic welfare (ISEW) for Thailand," Ecological Economics, Elsevier, vol. 54(1), pages 81-93, July.
    13. Brent Bleys, 2012. "Beyond GDP: Classifying Alternative Measures for Progress," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 109(3), pages 355-376, December.
    14. Beça, Pedro & Santos, Rui, 2010. "Measuring sustainable welfare: A new approach to the ISEW," Ecological Economics, Elsevier, vol. 69(4), pages 810-819, February.
    15. Long, Xianling & Ji, Xi, 2019. "Economic Growth Quality, Environmental Sustainability, and Social Welfare in China - Provincial Assessment Based on Genuine Progress Indicator (GPI)," Ecological Economics, Elsevier, vol. 159(C), pages 157-176.
    16. Talberth, John & Bohara, Alok K., 2006. "Economic openness and green GDP," Ecological Economics, Elsevier, vol. 58(4), pages 743-758, July.
    17. Pezzey, John C.V. & Burke, Paul J., 2014. "Towards a more inclusive and precautionary indicator of global sustainability," Ecological Economics, Elsevier, vol. 106(C), pages 141-154.
    18. Dietz, Simon & Neumayer, Eric, 2007. "Weak and strong sustainability in the SEEA: Concepts and measurement," Ecological Economics, Elsevier, vol. 61(4), pages 617-626, March.
    19. O'Mahony, Tadhg & Escardó-Serra, Paula & Dufour, Javier, 2018. "Revisiting ISEW Valuation Approaches: The Case of Spain Including the Costs of Energy Depletion and of Climate Change," Ecological Economics, Elsevier, vol. 144(C), pages 292-303.
    20. Xincheng Zhu & Yulin Liu & Xin Fang, 2022. "Revisiting the Sustainable Economic Welfare Growth in China: Provincial Assessment Based on the ISEW," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 162(1), pages 279-306, July.

    More about this item

    Keywords

    environment; sustainable; measurement; Geary-Khamis bias; the Afriat index;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:30851. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.