The Main Approaches to Measuring Progress and Measuring Well-being Barbara Iasiello& Jon Hall Global...
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Transcript of The Main Approaches to Measuring Progress and Measuring Well-being Barbara Iasiello& Jon Hall Global...
The Main Approaches to Measuring Progress and Measuring Well-
being
Barbara Iasiello& Jon Hall Global Project, OECD
How to Measure ProgressThree 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.
Agriculture, forestry and fishing
Mining and manufacturing
Electricity, gas and water supply
Care and other service activities
ConstructionTrade, hotels, restaurants and
repairTransport, storage and
communication
Finance and business services
Other commercial services
General government
Total
GDP
Paid employment and self employed persons
Low educati
on
Total employm
.
High education
Low educati
on
High educati
on
Female Total
Male
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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 ProgressThree Approaches
2.The One-Number Approach
Development of composite indicators of progress that combine detailed information into a single measure
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 – longevity, income, air quality
The stuff we can measure exactly
Progress: Objective and Subjective Components
• Subjective components – fear, trust, happiness, life satisfaction
Must ask people how they feelBusiness ConfidenceSelf assessed health
Objective and Subjective Assessments Are
Important
Level of Subjective well-being
high low
Objective living conditions
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
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 measuresHuman system
Ecosystem
Resource
demand
Ecosystem well-being
Human well-being
Culture
Social Capital
Governance
Economy
EducationHealthcar
e
Natural Capital
Biodiversity
CO2 emissions
Soil erosion
Water quality
Air quality
What HPI measures
Human system
Resource
demand
Happy and Long Lives
Resource Use
(divided by)
Human well-being
What HPI measures
Human system
Resource
demand
(Life Sat) * (Life Exp)
Eco Footprint
(divided by)
Human well-being
The benefits – for citizensThe 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 The benefits – for policy makersmakers
• 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 countriesThe 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…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…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 31
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