Measures of progress and well-being 15 th Jan 2010, Epiphany House, Cornwall Nicola Steuer & Saamah Abdallah Centre for Well-being nef (the new economics foundation)

Outline The need for new measures Growing momentum The purposes of measurement New approaches to measuring progress

About nef An independent UK think-and-do-tank (founded 1986). Inspired by 3 principles Sustainable development Social justice People’s well-being Aim of the centre for well-being: “Enhance individual and collective well-being in ways that are environmentally sustainable and socially just”

Outline The need for new measures Growing momentum The purposes of measurement New approaches to measuring progress

The need for new measures National Regional Local

The problem with GDP ‘The Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them… It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl… Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials… it measures everything, in short, except that which makes life worthwhile.’ Robert Kennedy, 1968

Gaps in the GDP  Economic depreciation  Defensive costs  Income distribution  Non-market benefits (e.g. household labour)  Environment capital and degradation  WELL-BEING ≠ WEALTH

Mis-conceptions “UK standard of living drops below 2005 level” The Guardian, 31 st Dec 2009 GDP keyword in over 1200 articles per month, before the recession began Main headline indicator

The need for new measures Regional – GVA plays same role – Sub-national review tasks RDAs with GVA growth as central goal

The need for new measures Local National Indicator Set 198 indicators, on a range of domains, including subjective and objective indicators But…  Big list of indicators  Not enough in terms of outcomes  Not enough subjective measures  Does not help determine trade-offs  No overall sense of progress

Personal resources Functioning well and satisfaction of needs Experience of life e.g. to be autonomous, competent, and connected to others e.g. resilience, optimism, self-esteem, personality e.g. material conditions, opportunities, social norms e.g. happiness, satisfaction, interest, boredom and distress Enabling conditions Foresight Mental Capital and Well-Being Project What is well-being?

Outline The need for new measures Growing momentum The purposes of measurement New approaches to measuring progress

Well-being matters UK Local Government Act of 2000: “the power to promote social, economic and environmental well- being” Every Child Matters Securing the Future Sub-National Review: “The purpose of local government is to take responsibility for the well- being of an area and the people who live there” HM Treasury Departmental Strategic Objective for : “Ensuring high and sustainable levels of economic growth, well being and prosperity for all”.

Measurement momentum Defra sustainable development indicators Office of National Statistics Eurostat Beyond GDP, Well-being 2030 OECD Stiglitz Commission: – “a shift of emphasis from a ‘production-oriented’ measurement system to one focused on the well- being of current and future generations”

OECD framework Global project for Measuring Progress of Societies

Democratic mandate International survey found 75% believe that environmental, health and social indicators should be given as much weight as economic ones 81% in Britain think that government’s prime objective should be to ‘greatest happiness’ rather than ‘greatest wealth’

Outline The need for new measures Growing momentum The purposes of measurement New approaches to measuring progress

Why measure? Identify problems Knowledge base Formulate policy & shape delivery Evaluate policy Compare Assess overall progress Resolve trade-offs

Why measure? Identify problems Knowledge base Formulate policy & shape delivery Evaluate policy Compare Assess overall progress Resolve trade-offs Change understandings of progress Stiglitz Commission: “new political narratives are necessary to identify where our societies should go”

Results from the questionnaire

Outline The need for new measures Growing momentum The purposes of measurement New approaches to measuring progress

R-ISEW  (Regional) Index of Sustainable Economic Well- Being  Adjusted GDP measure “The sum of net service flows and the net change in capital stocks, resulting from the productive activity in a given period”  First ISEW in 1989  R-ISEWs calculated for English regions for

R-ISEW R-ISEW = Personal consumer expenditure - adjustment for income inequality + public expenditures (non-defensive) + value of domestic labour & volunteering +/- economic adjustments - defensive private expenditures - costs of environmental degradation - depreciation of natural capital

R-ISEW & GVA by region: 2007 Well below mean Below mean Above mean Well above mean

R-ISEWs

R-ISEW by component – for South West

R-ISEW Assessment Track progress Compare Understand problems Identify problem groups Assess trade-offs Evaluate policies~

National Accounts of Well-Being Based on data from European Social Survey, 2006 c. 40,000 respondents in 22 countries Over 50 questions on well-being

National Accounts of well-being: a structure

Personal well-being

Country well-being profiles

National Accounts Assessment Track progress Compare Understand problems Identify problem groups Assess trade-offs~ Evaluate policies~

Happy Planet Index First report published 2006 European HPI, 2007 HPI 2.0, 2009 Caerphilly and Torfaen Sustainability Indicators

Keeping it simple WELL-BEING

Keeping it simple

What the numbers say

The HPI Combined into an efficiency index:

What the numbers say

HPI Assessment Track progress Compare Understand problems Identify problem groups~ Assess trade-offs~ Evaluate policies

Local well-being Published in 2008 Collaboration with Young Foundation and Audit Commission Based on work in 3 LAs: Hertfordshire Manchester City South Tyneside

Choosing a level

Personal-social-place framework

Local WB Framework Assessment Track progress Compare~ Understand problems Identify problem groups Assess trade-offs Evaluate policies

Key issues Aggregation / Substitution Subjective indicators Communication Short-term / long-term

Thank you!