Genuine Progress Indicator
A genuine progress indicator (GPI) is a metric used to measure the economic growth of a country. It is often considered an alternative metric to the more well-known gross domestic product (GDP) economic indicator. The GPI indicator takes everything the GDP uses into account but adds other figures that represent the cost of the negative effects related to economic activity, such as the cost of crime, cost of ozone depletion, and cost of resource depletion, among others.The GPI nets the positive and negative results of economic growth to examine whether or not it has benefited people overall.
Definition:
The Genuine Progress Indicator (GPI) is a measure of economic growth for a country. It is often considered an alternative to the more well-known Gross Domestic Product (GDP). GPI includes all the components used in GDP but also adds other data representing the costs of negative impacts related to economic activities, such as crime costs, ozone depletion costs, and resource depletion costs. GPI examines whether economic growth is beneficial to the people by netting the positive and negative outcomes.
Origin:
The concept of GPI was first proposed by economists and environmentalists in the 1990s as a supplement and improvement to GDP. In 1995, the organization Redefining Progress first published the GPI calculation method, aiming to provide a more comprehensive and true reflection of the economic development's impact on society and the environment.
Categories and Characteristics:
1. Economic Factors: Includes personal consumption expenditure, income distribution, unemployment rate, etc.
2. Social Factors: Includes crime rate, family structure, volunteer work, etc.
3. Environmental Factors: Includes air and water pollution, resource depletion, climate change, etc.
The characteristic of GPI is that it not only focuses on economic growth but also considers social and environmental sustainability, providing a more comprehensive assessment of economic health.
Comparison with Similar Concepts:
Compared to GDP, GPI pays more attention to the negative impacts on society and the environment, while GDP only focuses on economic output. Another similar concept is the Human Development Index (HDI), but HDI mainly focuses on education, health, and living standards, whereas GPI is more comprehensive.
Specific Cases:
1. California, USA: In the early 2000s, the California government began using GPI to evaluate the effectiveness of its economic policies. Through GPI, they found that although GDP was growing, environmental pollution and social inequality were also increasing.
2. Canada: Some provinces in Canada, such as Alberta, also started adopting GPI to measure economic development. They found that although resource extraction brought economic growth, environmental damage and resource depletion slowed GPI growth.
Common Questions:
1. Is GPI better than GDP?
GPI provides a more comprehensive perspective, but its calculation is complex and data acquisition is difficult.
2. What are the limitations of GPI?
The GPI calculation method is not fully standardized, and different regions may have different calculation methods, leading to non-comparable results.
