News: Measuring Well-Being Instead of Gross State Product with Genuine Progress Indicator

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Measuring well-being instead of gross state product: Genuine Progress Indicator relies on alternative economic measure

by Nat Rudarakanchana

Academics at the University of Vermont are establishing a new system for evaluating the impact of social and environmental factors on the state’s economy.

The Genuine Progress Indicator or GPI is a parallel to the more traditional Gross State Product, which measures the state’s economic activity. The GPI puts a monetary value on factors like air pollution, water pollution and volunteer work. Benefits like clean water and flood protection by forests are given a positive value while costs such environmental damage, harm to human health, and loss of leisure time are assigned a negative value.

UVM’s Gund Institute for Ecological Economics is creating a cost benefit analysis or Genuine Progress Indicator for Vermont to help lawmakers understand how the state’s environmental quality and social well-being affect the overall economic picture. The Gund Institute will deliver its findings based on 2011 data to the Legislature in January, along with an explanation of how it was derived and suggestions on how the state can provide better information for future GPI calculations.  READ MORE

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