First 50-state ‘GPI’ study helps redefine economic success
There’s an old adage in business that says, “You can’t manage what you can’t measure.” This philosophy guides a growing number of economic studies in the U.S. that move beyond narrow notions of economic success, to broader and more nuanced definitions of progress.
One such measure gaining traction in more than a dozen states is the Genuine Progress Indicator (GPI), an alternative to gross domestic product (GDP). A new study from the University of Vermont (UVM) is the first to publish GPI estimates for all 50 states.
The study suggests the U.S. economy is experiencing a significant “progress recession,” with broad social and environmental costs reducing the uneven benefits of economic growth.
While GDP measures all market transactions of households, businesses, and governments of an economy, it misses a range of key factors. For example, it does not track environmental factors such as air and water pollution, energy and forest depletion, or the social impacts of income inequality. Nor does it account for people’s time and resources that happen outside the market economy, including household work, elder and child care, volunteering, leisure and time spent commuting.
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