Metrics should take people’s lives into account study says
When we talk about economies from Canada to China we generally talk about growth in GDP.
But a new report from the OECD says that the reliance on this measure may lead to policymakers making the wrong decisions; something it says happened following the financial crisis of a decade ago.
The report says that better measurement of the economy and people’s well-being could have mitigated the damage caused by the Great Recession.
It also highlights that better metrics could have reduced the “continuing loss of trust” that consumers have in public institutions.
“Too much emphasis has been placed on GDP as the leading measure of the health of economies and societies,” said Professor Stiglitz, one of three co-Chairs of the High-Level Group on the Measurement of Economic Performance and Social Progress. “Ahead of the crisis this blinded policy makers to the dangers lurking and led them to make the wrong policy choices in the aftermath.
The study’s authors say that measurement of economic health should use a dashboard of indicators including the most important dimensions of people’s lives, such as skills, health, jobs and income, as well as economic security, environmental degradation and trust.
They say it should pay attention not just to average outcomes but also to how policies affect each of the segments of society, and give a balanced consideration to well-being today and in the future.
“If we do not look at the things that matter in life – whether that is inequalities, how people feel they are doing, their health and capabilities, or environmental sustainability – we cannot make the right choices for people, societies and the planet,” added Professor Stiglitz.
Co-author Professor Fitoussi says that people need to at least have hope of social progress.
“This was the backbone of our work - we scrutinized the available metrics to determine how and why they might hide a regressive evolution, from economic security to trust, passing through sustainability, inequalities including those of opportunities, and other measures and determinants of well-being. The central question, instead of focusing on GDP, then becomes: growth of what and for whom?,” said Professor Fitoussi.
📚📊 NEW REPORTS: A group of #wellbeing experts co-chaired by @JosephEStiglitz, Jean-Paul Fitoussi & OECD Chief Statistician Martine Durand argues that more needs to be done to measure what really matters in people’s lives.
— OECD ➡️ Better policies for better lives (@OECD) November 27, 2018
Find out more ➡️ https://t.co/YGH7rJXTDi #OECD6WF pic.twitter.com/tHkDNJf6ux
“It is only by having better metrics that truly reflect people’s lives and aspirations that we will be able to design and implement better policies for better lives,” said OECD Secretary-General Angel Gurría, launching the report at the 6th OECD World Forum on Statistics, Knowledge and Policy in Incheon, Korea. “It’s essential to try to establish the truth of people’s lives rather than the truth we find it most practical to study. This will play a key role in restoring people’s trust in institutions and supporting inclusive growth.”
