For Good Measure
Advancing Research on Well-being Metrics Beyond GDP
The 2009 Commission on the Measurement of Economic Performance and Social Progress (“Stiglitz-Sen-Fitoussi” Commission) concluded that we should move away from over-reliance on GDP when assessing a country’s health, towards a broader dashboard of indicators that would reflect concerns such as the distribution of well-being and sustainability in all of its dimensions. This book includes contributions from members of the OECD-hosted High Level Expert Group on the Measurement of Economic Performance and Social Progress, the successor of the Stiglitz-Sen-Fitoussi Commission, and their co-authors on the latest research in this field. These contributions look at key issues raised by the 2009 Commission that deserved more attention, such as how to better include the environment and sustainability in our measurement system, and how to improve the measurement of different types of inequalities, of economic insecurity, of subjective well-being and of trust.
A companion volume Beyond GDP: Measuring What Counts for Economic and Social Performance presents an overview by the co-chairs of the High Level Expert Group, Joseph E. Stiglitz, Jean-Paul Fitoussi and Martine Durand of the progress accomplished since the 2009 report, of the work conducted by the Group over the past five years, and of what still needs to be done.
Measuring the distribution of household income, consumption and wealth
This chapter addresses the challenges posed by measuring vertical inequalities in household income, consumption and wealth. It takes stock of international databases on economic inequality, highlighting the fact that they often display not only different levels of inequality but, for some countries, diverging trends as well. The chapter also discusses the challenges in measuring inequality because of under-coverage and under-reporting of top incomes (the “missing rich”) and approaches to correct for the problem. The shortcomings of typical welfare metrics used to measure economic inequality in international databases (disposable income and/or consumption expenditures) are also discussed, stressing the need of a more comprehensive metric, using an income variable that includes social transfers in-kind (especially for education and healthcare) and adds the effect of consumption taxes and subsidies. The chapter makes several recommendations to address the existing shortcomings in the measurement of income and wealth inequality.
- Click to access:
-
Click to download PDF - 4.63MBPDF