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The Pardee Papers

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Gross domestic product, Well-being -- Economic aspects, Well-being and quality of life -- Measurement, Well-being -- Social aspects


This paper is a call for better indicators of human well-being in nations around the world. We critique the inappropriate use of Gross Domestic Product (GDP) as a measure of national well-being, something for which it was never designed. We also question the idea that economic growth is always synonymous with improved well-being. Useful measures of progress and well-being must be measures of the degree to which society?s goals (i.e., to sustainably provide basic human needs for food, shelter, freedom, participation, etc.) are met, rather than measures of the mere volume of marketed economic activity, which is only one means to that end. Various alternatives and complements to GDP are discussed in terms of their motives, objectives, and limitations. Some of these are revised measures of economic activity while others measure changes in community capital?natural, social, human, and built?in an attempt to measure the extent to which development is using up the principle of community capital rather than living off its interest. We conclude that much useful work has been done; many of the alternative indicators have been used successfully in various levels of community planning. But the continued misuse of GDP as a measure of well-being necessitates an immediate, aggressive, and ongoing campaign to change the indicators that decision makers are using to guide policies and evaluate progress. We need indicators that promote truly sustainable development?development that improves the quality of human life while living within the carrying capacity of the supporting ecosystems. We end with a call for consensus on appropriate new measures of progress toward this new social goal.


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