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Application and use of the ISEW for assessing the sustainability of a regional system: A case study in Italy

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  • Pulselli, Federico M.
  • Bravi, Mirko
  • Tiezzi, Enzo
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    Abstract

    The Index of Sustainable Economic Welfare (ISEW) was introduced by Daly and Cobb in 1989 in order to integrate the information embodied in GDP. Since economic growth implies externalities and market failures, and a portion of it can be defined as “uneconomic”, the ISEW method introduces some corrections and adjustments to the GDP calculation framework. The ISEW has been calculated for a number of nations but it has been rarely applied to sub-national systems. Its calculation at the local level is important especially in case of administrative decentralization, and autonomy and responsibility of local authorities in certain fields. For this reason, a more and more comprehensive knowledge of the characteristics and peculiarities of the territorial system they manage is necessary. This paper presents the results of the ISEW calculation for Tuscany, a region in central Italy, in the period 1971–2006. This is one of the few attempts to apply the ISEW in time series at the regional level. Final results show that a discrepancy between ISEW and GDP appeared in the 1970s. Social and environmental pressures increased during the period under study making the gap equal to about 30 percent of regional GDP in 2006. The ISEW can be used also as a tool for evaluating policies, but further adjustments in calculation of certain items are considered necessary for taking into account and evaluating punctual policies. A case of energy policy is presented.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

    Volume (Year): 81 (2012)
    Issue (Month): 3 ()
    Pages: 766-778

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    Handle: RePEc:eee:jeborg:v:81:y:2012:i:3:p:766-778

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    Web page: http://www.elsevier.com/locate/jebo

    Related research

    Keywords: GDP; Economic growth; Welfare; Social and environmental pressures; Defensive expenditures; Tuscany;

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    References

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    1. Pulselli, Federico Maria & Ciampalini, Francesca & Tiezzi, Enzo & Zappia, Carlo, 2006. "The index of sustainable economic welfare (ISEW) for a local authority: A case study in Italy," Ecological Economics, Elsevier, vol. 60(1), pages 271-281, November.
    2. Stockhammer, Engelbert & Hochreiter, Harald & Obermayr, Bernhard & Steiner, Klaus, 1997. "The index of sustainable economic welfare (ISEW) as an alternative to GDP in measuring economic welfare. The results of the Austrian (revised) ISEW calculation 1955-1992," Ecological Economics, Elsevier, vol. 21(1), pages 19-34, April.
    3. Max-Neef, Manfred, 1995. "Economic growth and quality of life: a threshold hypothesis," Ecological Economics, Elsevier, vol. 15(2), pages 115-118, November.
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    5. Bleys, Brent, 2008. "Proposed changes to the Index of Sustainable Economic Welfare: An application to Belgium," Ecological Economics, Elsevier, vol. 64(4), pages 741-751, February.
    6. Sebastian Gil & Jerzy Sleszynski, 2003. "An index of sustainable economic welfare for Poland," Sustainable Development, John Wiley & Sons, Ltd., vol. 11(1), pages 47-55.
    7. Neumayer, Eric, 2000. "On the methodology of ISEW, GPI and related measures: some constructive suggestions and some doubt on the 'threshold' hypothesis," Ecological Economics, Elsevier, vol. 34(3), pages 347-361, September.
    8. William D. Nordhaus & James Tobin, 1971. "Is Growth Obsolete?," Cowles Foundation Discussion Papers 319, Cowles Foundation for Research in Economics, Yale University.
      • William D. Nordhaus & James Tobin, 1973. "Is Growth Obsolete?," NBER Chapters, in: The Measurement of Economic and Social Performance, pages 509-564 National Bureau of Economic Research, Inc.
      • William D. Nordhaus & James Tobin, 1972. "Is Growth Obsolete?," NBER Chapters, in: Economic Research: Retrospect and Prospect Vol 5: Economic Growth, pages 1-80 National Bureau of Economic Research, Inc.
    9. Eric Neumayer, 1999. "The ISEW -- not an Index of Sustainable Economic Welfare," Social Indicators Research, Springer, vol. 48(1), pages 77-101, September.
    10. Hanley, Nick & Moffatt, Ian & Faichney, Robin & Wilson, Mike, 1999. "Measuring sustainability: A time series of alternative indicators for Scotland," Ecological Economics, Elsevier, vol. 28(1), pages 55-73, January.
    11. Clarke, Matthew & Islam, Sardar M.N., 2005. "Diminishing and negative welfare returns of economic growth: an index of sustainable economic welfare (ISEW) for Thailand," Ecological Economics, Elsevier, vol. 54(1), pages 81-93, July.
    12. Rafael Ziegler, 2007. "Political Perception and Ensemble of Macro Objectives and Measures: The Paradox of the Index for Sustainable Economic Welfare," Environmental Values, White Horse Press, vol. 16(1), pages 43-60, February.
    13. Costanza, Robert & Erickson, Jon & Fligger, Karen & Adams, Alan & Adams, Christian & Altschuler, Ben & Balter, Stephanie & Fisher, Brendan & Hike, Jessica & Kelly, Joe, 2004. "Estimates of the Genuine Progress Indicator (GPI) for Vermont, Chittenden County and Burlington, from 1950 to 2000," Ecological Economics, Elsevier, vol. 51(1-2), pages 139-155, November.
    14. Hamilton, Clive, 1999. "The genuine progress indicator methodological developments and results from Australia," Ecological Economics, Elsevier, vol. 30(1), pages 13-28, July.
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    Cited by:
    1. Brent Bleys, 2013. "The Regional Index of Sustainable Economic Welfare for Flanders, Belgium," Sustainability, MDPI, Open Access Journal, vol. 5(2), pages 496-523, February.

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