Genuine Progress Indicator (GPI)
Candlefocus EditorGPI measures a country’s well-being from a more holistic perspective, taking into account positive contributions such as investment in education and health care, as well as negative externalities, most particularly including pollution and greenhouse gas emissions. Thus, GPI is a more comprehensive measure of economic health, taking into account aspects such as cost of crime, income inequality and cost of leisure time. It can also be used to measure income disparities, between households and between regions, as well as to compare different countries’ respective development levels.
GPI is seen as a more equitable metric than GDP, as it takes into account aspects of wellbeing that are not generally captured by economic growth or wealth production. This means it can provide a more accurate assessment of the quality of life, taking into account environmental, health, and other factors that can affect long-term wellbeing, such as overcrowding, access to education, and clean air and water. Therefore, by using GPI, policy-makers and economists can gain a better understanding of how public policies affect economic and social wellbeing.
Despite the benefits associated with GPI, there are some critics who suggest that the metric is too subjective and therefore cannot be taken as a reliable guide to economic progress. They point to the fact that some GPI measures, such as those concerning income inequality and personal consumption, are more subjective than those used in GDP and therefore cannot be assumed to be an accurate representation of economic health.
Despite these criticisms, GPI is still an important metric which provides a more comprehensive measure of economic growth and well-being than traditional metrics such as GDP. The information provided by GPI can provide invaluable insights into the economic and social health of a nation, and can be used to inform better policy decisions for the future. It is for this reason that its usage has grown in recent years, and its importance as an effective tool for measure economic progress is likely to continue to be of increasing importance in the future.