Transcript The Main Approaches to Measuring Progress and

The Main Approaches to
Measuring Progress and
Measuring Well-being
Barbara Iasiello& Jon Hall
Global Project, OECD
How to Measure Progress?
How to Measure Progress
Three Approaches
1. The Accounting Framework Approach
Extension of traditional economic accounts based
on GDP, to capture the environment or social
concerns
SESAME Approach
• The SESAME can be defined as a detailed
and integrated statistical information
system in matrix format, from which a set
of core (macro-)indicators for different
aspects of well-being can be derived
(Keuning, 1997)
• Usually it includes many indicators as:
GDP, population size, (un)employment,
inequality,
education,
environmental
indicators, etc.
Paid employment and self
employed persons
Male
Female
Total
GDP
Low
educatio
n
High
educatio
n
Low
educatio
n
High
educatio
n
Total
employm.
Agriculture, forestry and fishing
…
…
…
…
…
…
Mining and manufacturing
…
…
…
…
…
…
Electricity, gas and water supply
…
…
…
…
…
…
Construction
Trade, hotels, restaurants and
repair
Transport, storage and
communication
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
Finance and business services
…
…
…
…
…
…
Other commercial services
…
…
…
…
…
…
General government
…
…
…
…
…
…
Care and other service activities
…
…
…
…
…
…
Total
…
…
…
…
…
…
Source: Keuning, S., Verbruggen, M., European Structural Indicators – a Way Forward. June 2003.
Strengths & Weaknesses
 Very powerful tool for analysis
 Investment in terms of the amount of
data to be collected and the resources
needed
How to Measure Progress
Three Approaches
2.The One-Number Approach
Development of composite indicators of
progress that combine detailed
information into a single measure
The GPI
GDP
Genuine
Progress
Indicator
Subtract “real” costs
(eg defensive expenditure like prisons)
Add uncounted benefits (eg
unpaid work, parenting)
Strengths & Weaknesses
 Powerful tool for advocacy
 Difficulty in aggregating units measured
in different ways – adding apples and
oranges, or valuing things like “parenting”
in $s
 Difficult to interpret the results without
stepping back to investigate the
components
How to Measure Well-being
Three Approaches
3. The Suite of Indicator Approach
Identification of a set of key indicators
covering economic, social and
environmental domains
Strengths & Weaknesses
 It has the advantage of covering a wide
range of topics, without the need of
estimating individual weights.
 Can be difficult to interpret
 Can include too much information
Indicators
• Measures should be “unambiguous" that is
have a clear good/bad direction of
movement
• Important to focus on the big picture
• Important to discuss the links between
indicators ….. trade-offs and
reinforcements
Progress: Objective and
Subjective Components
•
Objective
components
income, air quality
–
The stuff we can measure exactly
longevity,
Progress: Objective and
Subjective Components
•
Subjective components –
happiness, life satisfaction
Must ask people how they feel
fear,
trust,
Business Confidence
Self assessed health
Objective and Subjective
Assessments Are Important
Level of
Subjective well-being
high
Objective living
conditions
low
high
well-being
dissonance
low
adaptation
deprivation
Measuring Subjective
Well-being
Arguments For
• Nice organising principle
• Public are interested – and a growing
demand
• Solid evidence that high subjective wellbeing
correlates with other “hard” aspects of
wellbeing e.g. health
Happiness and Health
The Nuns
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Measuring Subjective
Well-being
Arguments Against
• Difficult to measure
• Difficult to find policy relevance for measures
(at least for generalised measures of life
satisfaction)
• Doesn’t appear to change a great deal over
time (though there is a life course effect)
• Not “appropriate” ground for a statistical
office
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A Happy Planet Index
• Launched by nef in July 2006
• HDI style rank order of nations
• Measure of the “Ecological efficiency
with which human well-being is
delivered”
• Over 1,000,000 downloads to date
What HPI measures
Human system
Culture
Governance
Human
well-being
Education
Social Capital
Healthcare
Economy
Resource
demand
Natural
Capital
Water
quality
CO2
emissions
Ecosystem
well-being
Biodiversity
Air quality
Soil erosion
Ecosystem
What HPI measures
Human system
Human
well-being
Happy and Long Lives
(divided by)
Resource
demand
Resource Use
What HPI measures
Human system
Human
well-being
(Life Sat) * (Life Exp)
(divided by)
Resource
demand
Eco Footprint
Measuring Progress to
Foster Progress
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The benefits
 for citizens
for policy makers
for countries
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The benefits – for citizens
• Promote accountability and enhance citizen
engagement…
….improve citizens knowledge giving them the
opportunity to improve their decision making
processes and to become more aware of the
risks and challenges of today’s world
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The benefits – for policy makers
• Policy makers can better assess the current
situation, make more informed decisions, and
measure progress over time and relative to
other nations
• Better coordination in government
• Data to advocate necessary reforms and
evaluate their impact on societal welfare
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The benefits – for countries
• By highlighting the issues that genuinely
matter to a society, a set of progress measures
can help a country best meet the needs of its
citizens by focussing attention on the key
outcomes
• ‘Sunshine is the best disinfectant’…
….transparency has the ability to reduce waste,
prevent corruption, and shift resources where
they’re truly needed
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Progress Measures Can Help…



Promote greater accountability
Enhance the quality of public debate
Help countries prioritize resource
allocation
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Progress Measures Can Help…
Enhance democracy …
… enhance decision making …
… and so generate progress
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• “Measuring the Progress of Societies is one of
the most important roles the OECD can take on”
– Angel Gurria, OECD Secretary General
• "World GDP growth has been faster than it has
been for a very long time. But people are not
particularly happy"
– Kemal Dervis, Head of UNDP
• " Progress indicators are a way for people to
hold their government’s accountable "
– Francois Bourguignon, Chief Economist of the World
Bank
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Group Exercise
The Secretary General of the League of Arab
States has asked your group to develop a
set of indicators of progress.
Your Job is to
 Choose a concept related to progress that covers
different dimensions – eg poverty, social
cohesion, etc. –and explain why it is important
for progress.
 Discuss what specific aspects of Arabian life
need to be included in this concept.
 Develop the specific indicators that need to be
included in the set of indicators.
Your Job is to
 For example… develop indicators of “Safety”.
Safety must be defined….
 Safety … might be made up of dimensions like
crime, defense, road accidents … each
dimensions must be measured using an
indicator…
 Crime … could be the homicide rate, the
mugging rate, people in prison.
 List the specific indicators you want to include
for measuring Safety
You have to
Prepare a five minutes presentation
describing your set of indicators and why
it is important for Progress.