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Measures of progress and well-being 15 th Jan 2010, Epiphany House, Cornwall

Measures of progress and well-being 15 th Jan 2010, Epiphany House, Cornwall Nicola Steuer & Saamah Abdallah Centre for Well-being nef (the new economics foundation). Outline. The need for new measures Growing momentum The purposes of measurement New approaches to measuring progress.

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Measures of progress and well-being 15 th Jan 2010, Epiphany House, Cornwall

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  1. Measures of progress and well-being 15th Jan 2010, Epiphany House, Cornwall Nicola Steuer & Saamah Abdallah Centre for Well-being nef (the new economics foundation)

  2. Outline • The need for new measures • Growing momentum • The purposes of measurement • New approaches to measuring progress

  3. About nef An independent UK think-and-do-tank (founded 1986). Inspired by 3 principles Sustainable development Social justice People’s well-being Aim of the centre for well-being: “Enhance individual and collective well-being in ways that are environmentally sustainable and socially just”

  4. Outline • The need for new measures • Growing momentum • The purposes of measurement • New approaches to measuring progress

  5. The need for new measures • National • Regional • Local

  6. The problem with GDP ‘The Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them… It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl… Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials… it measures everything, in short, except that which makes life worthwhile.’ Robert Kennedy, 1968

  7. Gaps in the GDP • Economic depreciation • Defensive costs • Income distribution • Non-market benefits (e.g. household labour) • Environment capital and degradation • WELL-BEING ≠ WEALTH

  8. Mis-conceptions “UK standard of living drops below 2005 level” The Guardian, 31st Dec 2009 • GDP keyword in over 1200 articles per month, before the recession began • Main headline indicator

  9. The need for new measures • Regional • GVA plays same role • Sub-national review tasks RDAs with GVA growth as central goal

  10. The need for new measures • Local National Indicator Set 198 indicators, on a range of domains, including subjective and objective indicators But… • Big list of indicators • Not enough in terms of outcomes • Not enough subjective measures • Does not help determine trade-offs • No overall sense of progress

  11. What is well-being? Foresight Mental Capital and Well-Being Project Experience of life e.g. happiness, satisfaction, interest, boredom and distress e.g. to be autonomous, competent, and connected to others Functioning well and satisfaction of needs Enabling conditions Personal resources e.g. material conditions, opportunities, social norms e.g. resilience, optimism, self-esteem, personality

  12. Outline • The need for new measures • Growing momentum • The purposes of measurement • New approaches to measuring progress

  13. Well-being matters • UK Local Government Act of 2000: “the power to promote social, economic and environmental well-being” • Every Child Matters • Securing the Future • Sub-National Review: “The purpose of local government is to take responsibility for the well-being of an area and the people who live there” • HM Treasury Departmental Strategic Objective for 2008-2011: “Ensuring high and sustainable levels of economic growth, well being and prosperity for all”.

  14. Measurement momentum • Defra sustainable development indicators • Office of National Statistics • Eurostat • Beyond GDP, Well-being 2030 • OECD • Stiglitz Commission: • “a shift of emphasis from a ‘production-oriented’ measurement system to one focused on the well-being of current and future generations”

  15. OECD framework Global project for Measuring Progress of Societies

  16. Democratic mandate • International survey found 75% believe that environmental, health and social indicators should be given as much weight as economic ones • 81% in Britain think that government’s prime objective should be to ‘greatest happiness’ rather than ‘greatest wealth’

  17. Outline • The need for new measures • Growing momentum • The purposes of measurement • New approaches to measuring progress

  18. Why measure? Identify problems Knowledge base Formulate policy & shape delivery Resolve trade-offs Evaluate policy Assess overall progress Compare

  19. Why measure? Identify problems Knowledge base Formulate policy & shape delivery Change understandings of progress Resolve trade-offs Evaluate policy Stiglitz Commission: “new political narratives are necessary to identify where our societies should go” Assess overall progress Compare

  20. Results from the questionnaire

  21. Outline • The need for new measures • Growing momentum • The purposes of measurement • New approaches to measuring progress

  22. R-ISEW (Regional) Index of Sustainable Economic Well-Being Adjusted GDP measure “The sum of net service flows and the net change in capital stocks, resulting from the productive activity in a given period” First ISEW in 1989 R-ISEWs calculated for English regions for 1994-2007

  23. R-ISEW R-ISEW = Personal consumer expenditure - adjustment for income inequality + public expenditures (non-defensive) + value of domestic labour & volunteering +/- economic adjustments - defensive private expenditures - costs of environmental degradation - depreciation of natural capital

  24. R-ISEW & GVA by region: 2007 Well below mean Below mean Above mean Well above mean

  25. R-ISEWs

  26. R-ISEW by component – for South West

  27. R-ISEW Assessment

  28. National Accounts of Well-Being • Based on data from European Social Survey, 2006 • c. 40,000 respondents in 22 countries • Over 50 questions on well-being

  29. National Accounts of well-being: a structure

  30. Personal well-being

  31. Country well-being profiles

  32. National Accounts Assessment

  33. Happy Planet Index • First report published 2006 • European HPI, 2007 • HPI 2.0, 2009 • Caerphilly and Torfaen Sustainability Indicators

  34. Keeping it simple WELL-BEING

  35. Keeping it simple

  36. What the numbers say

  37. The HPI • Combined into an efficiency index:

  38. What the numbers say

  39. HPI Assessment

  40. Local well-being • Published in 2008 • Collaboration with Young Foundation and Audit Commission • Based on work in 3 LAs: • Hertfordshire • Manchester City • South Tyneside

  41. Choosing a level

  42. Personal-social-place framework

  43. Local WB Framework Assessment

  44. Key issues • Aggregation / Substitution • Subjective indicators • Communication • Short-term / long-term

  45. Thank you! nicola.steuer@neweconomics.org; 020 7820 6390 saamah.abdallah@neweconomics.org; 020 7820 6372 www.neweconomics.org

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