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A pragmatic approach to evaluate alternative indicators to GDP

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Abstract

The serious economic crisis broken out in 2008 highly stressed the limitations of GDP used as a well-being indicator and as a predictive tool for economy. This induced the need to identify new indicators able to link the economic prosperity of a country to aspects of sustainable development and externalities, both positive and negative, in the long run. The aim of this paper is to introduce a structured approach which supports the choice or the construction of alternative indicators to GDP. The starting point is the definition of what a well-being indicator actually should represent according to the Recommendations of the Stiglitz-Sen-Fitoussi Report on the measurement of economic performance and social progress. Then the paper introduces a systematic procedure for the analysis of well-being indicators. The different phases of this procedure entail the checking of indicators technical properties and their effect on the representational efficacy. Finally, some of the most representative well-being indicators drawn from the literature are compared and a detailed application example is proposed.

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Authors and Affiliations

  1. DISPEA, Politecnico di Torino, Corso Duca degli Abruzzi 24, 10129, Torino, Italy

    L. Fasolo, M. Galetto & E. Turina

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  1. L. Fasolo
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  2. M. Galetto
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  3. E. Turina
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Correspondence to M. Galetto.

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Fasolo, L., Galetto, M. & Turina, E. A pragmatic approach to evaluate alternative indicators to GDP. Qual Quant 47, 633–657 (2013). https://doi.org/10.1007/s11135-011-9537-7

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