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Measure of economic welfare (MEW) is a method to measure the living standards.
MEW = value of GDP + value of leisure time + value of unpaid work - value of environmental damage.[ citation needed ]
In 1972, William Nordhaus and James Tobin developed Measure of economic welfare (MEW).This adjusts GDP by adding leisure, unpaid housework and the value of services given by consumer durables over the year. Deductions are made for 'regrattables' such as expenditure on commuting to work, defence,the police, negative externalities including pollution, and expenditure on consumer durables. This is an interesting approach which seeks to cover more of the aspects which affect economic welfare although it has its own share of problems of having to attach a monetary value to non-marketed products.
William Dawbney Nordhaus is an American economist and Sterling Professor of Economics at Yale University, best known for his work in economic modelling and climate change. He is one of the laureates of the 2018 Nobel Memorial Prize in Economic Sciences. Nordhaus received the prize "for integrating climate change into long-run macroeconomic analysis".
James Tobin was an American economist who served on the Council of Economic Advisers and the Board of Governors of the Federal Reserve System, and taught at Harvard and Yale Universities. He developed the ideas of Keynesian economics, and advocated government intervention to stabilize output and avoid recessions. His academic work included pioneering contributions to the study of investment, monetary and fiscal policy and financial markets. He also proposed an econometric model for censored endogenous variables, the well-known "Tobit model". Tobin received the Nobel Memorial Prize in Economic Sciences in 1981.
Pollution is the introduction of contaminants into the natural environment that cause adverse change. Pollution can take the form of chemical substances or energy, such as noise, heat or light. Pollutants, the components of pollution, can be either foreign substances/energies or naturally occurring contaminants. Pollution is often classed as point source or nonpoint source pollution. In 2015, pollution killed 9 million people in the world.
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced in a period of time, often annually. GDP (nominal) per capita does not, however, reflect differences in the cost of living and the inflation rates of the countries; therefore using a basis of GDP per capita at purchasing power parity (PPP) is arguably more useful when comparing differences in living standards between nations.
A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product (GDP), gross national product (GNP), net national income (NNI), and adjusted national income also called as NNI at factor cost. All are specially concerned with counting the total amount of goods and services produced within the economy and by different sectors. The boundary is usually defined by geography or citizenship, and it is also defined as the total income of the nation and also restrict the goods and services that are counted. For instance, some measures count only goods & services that are exchanged for money, excluding bartered goods, while other measures may attempt to include bartered goods by imputing monetary values to them.
Uneconomic growth, in human development theory, welfare economics, and some forms of ecological economics, is economic growth that reflects or creates a decline in the quality of life. The concept is attributed to leading ecological economist and steady-state theorist Herman Daly, though other theorists can also be credited for the incipient idea. Note Uneconomic growth should not be confused with economic degrowth, the reduction of the size of the economy to increase well-being and sustainability.
The green gross domestic product is an index of economic growth with the environmental consequences of that growth factored into a country's conventional GDP. Green GDP monetizes the loss of biodiversity, and accounts for costs caused by climate change. Some environmental experts prefer physical indicators, which may be aggregated to indices such as the "Sustainable Development Index".
Genuine progress indicator (GPI) is a metric that has been suggested to replace, or supplement, gross domestic product (GDP). The GPI is designed to take fuller account of the well-being of a nation, only a part of which pertains to the size of the nation's economy, by incorporating environmental and social factors which are not measured by GDP. For instance, some models of GPI decrease in value when the poverty rate increases. The GPI separates the concept of societal progress from economic growth.
Herman Edward Daly is an American ecological and Georgist economist and emeritus professor at the School of Public Policy of University of Maryland, College Park in the United States.
Net national product (NNP) refers to gross national product (GNP), i.e. the total market value of all final goods and services produced by the factors of production of a country or other polity during a given time period, minus depreciation. Similarly, net domestic product (NDP) corresponds to gross domestic product (GDP) minus depreciation. Depreciation describes the devaluation of fixed capital through wear and tear associated with its use in productive activities.
The Human Poverty Index (HPI) was an indication of the standard of living in a country, developed by the United Nations (UN) to complement the Human Development Index (HDI) and was first reported as part of the Human Development Report in 1997. It was considered to better reflect the extent of deprivation in developed countries compared to the HDI. In 2010 it was supplanted by the UN's Multidimensional Poverty Index.
The Happy Planet Index (HPI) is an index of human well-being and environmental impact that was introduced by the New Economics Foundation (NEF) in July 2006. The index is weighted to give progressively higher scores to nations with lower ecological footprints.
The National Human Development Reports (NHDR) take the Global Human Development Report approach to the national level and are prepared and owned by national teams. More than 540 national and sub-national HDRs have been produced so far by 135 countries, in addition to 31 regional reports.
The Gender Related Development Index (GDI) is an index designed to measure gender equality.
The Economist Intelligence Unit’s where-to-be-born index attempts to measure which country will provide the best opportunities for a healthy, safe and prosperous life in the years ahead. It is based on a method that links the results of subjective life-satisfaction surveys to the objective determinants of quality of life across countries along with a forward-looking element.
There is a criticism of the gross national product. The criticism stems from the fact that this measurement of national product does not account for environmental degradation and resource depletion. A new approach to the situation of allocating these omitted environmental features in the national product has been the advent of the green national product.
The Legatum Prosperity Index is an annual ranking developed by the Legatum Institute, a division of the private investment firm Legatum. The ranking is based on a variety of factors including wealth, economic growth, education, health, personal well-being, and quality of life. In the 2018 rankings, 149 countries were ranked, and Norway topped the list, followed by New Zealand and Finland. Afghanistan was on the last place. In 2013, twenty-seven of the top 30 countries were democracies.
The Gender Parity Index (GPI) is a socioeconomic index usually designed to measure the relative access to education of males and females. This index is released by UNESCO. In its simplest form, it is calculated as the quotient of the number of females by the number of males enrolled in a given stage of education. A GPI equal to one signifies equality between males and females. A GPI less than one is an indication that gender parity favors males while a GPI greater than one indicates gender parity that favors females. The closer a GPI is to one, the closer a country is to achieving equality between males and females. It is used by international organizations, particularly in measuring the progress of developing countries. The Institute for Statistics of UNESCO also uses a more general definition of GPI: for any development indicator one can define the GPI relative to this indicator by dividing its value for females by its value for males. For example, some UNESCO documents consider gender parity in literacy.
Urban theory describes the city formation phenomenon where economic priorities prevail to facilitate the city's propensity to generate and accumulate wealth. Such city formation involves some irreversible spatial investments, massive resource allocations and financial investments recoverable only if anticipated future income transpires. Consequently, it is a pertinent concept in urban planning. Though related, this is not to be confused with urban economics where economic principles and tools are applied at macro and micro levels. Urbanomics is to be understood as a paradigm to understand impact of the globalization process on urban development.
The OECD Better Life Index, in May 2011 by the Organisation for Economic Co-operation and Development following a decade of work on this issue, is a first attempt to bring together internationally comparable measures of well-being in line with the recommendations of the Commission on the Measurement of Economic Performance and Social Progress also known as the Stiglitz-Sen-Fitoussi Commission. The recommendations made by this Commission sought to address concerns that standard macroeconomic statistics like GDP failed to give a true account of people’s current and future well-being. The OECD Better Life Initiative includes two main elements: "Your Better Life Index" and "How's Life?"
Wikiprogress is an online platform for sharing information on the measurement of social, economic and environmental progress. It is thought to facilitate sharing on ideas, initiatives and knowledge on "measuring the progress of societies". It is, like Wikipedia, open to all members and communities for contribution – anyone interested in "progress" can register.
Although for many decades, it was customary to focus on GDP and other measures of national income, there has been growing interest in developing broad measures of economic well-being. National and international approaches include the Beyond GDP programme developed by the European Union, the Better Lives Compendium of Indicators developed by the OECD, as well as many alternative metrics of wellbeing or happiness. One of the earliest attempts to develop such an index at national level was Bhutan's Gross National Happiness Index and there are a now a number of similar projects ongoing around the world, including a project to develop for the UK an assessment of national well-being, commissioned by the Prime Minister David Cameron and led by the Office for National Statistics.
The Social Progress Index (SPI) measures the extent to which countries provide for the social and environmental needs of their citizens. Fifty-four indicators in the areas of basic human needs, foundations of well-being, and opportunity to progress show the relative performance of nations. The index is published by the nonprofit Social Progress Imperative, and is based on the writings of Amartya Sen, Douglass North, and Joseph Stiglitz. The SPI measures the well-being of a society by observing social and environmental outcomes directly rather than the economic factors. The social and environmental factors include wellness, equality, inclusion, sustainability and personal freedom and safety.