Measuring Individual Well-Being and Social Welfare Beyond GDP
The Report by the Commission on the Measurement of Economic Performance and Social Progress, the so-called Stiglitz Report, has been an important step forward to work toward more accurate indicators of human welfare. Since its presentation to the public in 2009, it has fostered wide discussion over its preions. Media, stakeholder and the academic community have been involved in debates to overcome the use of GDP as catch-all socio-economic indicator.
GDP measures a country's outpur, but it is unable to offer any indication on either the quality of life of its citizens or the progress of society as a whole. Quality of life is a wide-ranging concept that refers to multiple characteristics such health and longevity, monetary resources, employment regime and type of profession, housing conditions, degree of safety, free expression of one's opinions, and level of satisfaction concerning various areas of one's life.
The Report states that individual welfare is a multi-dimensional variable, and as such several dimensions need to be taken into account beside income when well-being is measured. It also stresses the need to focus on all aspects of a given statistical distribution beyond the simple mean or average, and various scientific contributions, normally independently developed, were brought together in this transnational effort, including the literature on subjective individual well-being and the measurement of human welfare based on various objective indicators.
It's not only the Stiglitz-Fitoussi-Sen Commission that has questioned the role of GDP as main economic indicator. On its 50th anniversary the OECD has launched the "OECD Better Life Initiative". Anyone, by going to the link https://www.oecdbetterlifeindex.org/ can create his/her own indicator of individual welfare and look at international comparisons for the social, economic, and environmental dimensions deemed relevant.
The European Commission, in its communication "GDP and beyond – Measuring progress in a changing world", did underline the necessity of constructing new EU indicators to capture variables such as environmental sustainability and social exclusion.
This year in Italy, CNEL president Antonio Marzano and ISTAT president Enrico Giovannini have launched a study group on "the measurement of progress of Italian society", composed of trade and civil society members, as well as a "scientific committee on the measurement of welfare". The objective is to develop a multi-dimensional indicator of Equitable and Sustainable Welfare (Benessere Equo e Sostenibile – BES), which can complement GDP by measurement various areas of individual well-being and especially look at sustainability in terms of the physical, social, natural, human capital that can be passed on to future generations.
Since November 2011, all Italians are called to express their opinion on the twelve quality-of-life variables chosen by the project, by logging onto the blog https://www.misuredelbenessere.it/. By the end of 2012, the first report on overall quality of life in Italy is going to be released. We will thus have an official indicator of fair and sustainable socio-economic welfare, which will hopefully be taken into account by Italian politicians and administrators when making their policy decisions.