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Measuring Well-Being: W3 Indicators to Complement GDP

Author

Listed:
  • Marco Giesselmann
  • Richard Hilmer
  • Nico A. Siegel
  • Gert G. Wagner

Abstract

Plenty of people in Germany, including politicians and researchers, believe that gross domestic product (GDP) is an outdated indicator of a society's prosperity. Therefore, at the end of 2010, the German Bundestag, the federal parliament, established a study commission (Enquete Kommission) tasked with developing an alternative to GDP for measuring growth, wealth, and quality of life. This commission has now submitted a proposal: to complement GDP with nine additional indicators, covering a wide range of areas such as the distribution of income, biodiversity, and life expectancy. Replacing gross domestic product with a single alternative index was rejected by the commission, however, since it is not possible to reduce citizens' very different wishes and expectations to "a common denominator." The ten indicators cover three dimensions of wellbeing - economy, ecology, and social wealth - and hence are called W3 indicators.2 This name, which emphasizes the equal importance of the three dimensions, is concise and memorable enough to position itself alongside GDP. A representative survey of registered voters conducted by DIW Berlin and TNS Infratest shows that citizens generally consider all the new indicators proposed by the commission to be important. Respondents ranked preserving "democracy and freedom" as the most relevant indicator and "further increasing life expectancy" as the least relevant. Average per capita income - as an indicator of gross domestic product - is rated as the second least relevant factor. Moreover, the study also shows that opinions on the importance of different indicators vary considerably across socio-economic groups.

Suggested Citation

  • Marco Giesselmann & Richard Hilmer & Nico A. Siegel & Gert G. Wagner, 2013. "Measuring Well-Being: W3 Indicators to Complement GDP," DIW Economic Bulletin, DIW Berlin, German Institute for Economic Research, vol. 3(5), pages 10-19.
  • Handle: RePEc:diw:diwdeb:2013-5-3
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    Cited by:

    1. Julia M. Rohrer & Martin Bruemmer & Jürgen Schupp & Gert G. Wagner, 2017. "Worries across Time and Age in Germany: Bringing Together Open- and Close-Ended Questions," Discussion Papers of DIW Berlin 1671, DIW Berlin, German Institute for Economic Research.
    2. repec:exl:29stat:v:16:y:2015:i:3:p:461-487 is not listed on IDEAS
    3. Andrzej K. Koźmiński & Katarzyna Piotrowska & Krzysztof Zagórski & Adam Noga, 2015. "Operationalization and Estimation of Balanced Development Index for Poland 1999-2016," Statistics in Transition new series, Główny Urząd Statystyczny (Polska), vol. 16(3), pages 461-478, September.
    4. Alecu Alexandra & Dusmanescu Dorel, 2016. "Approaches On Measuring Sustainable Development In Contemporary World – Beyond Classical Indicators," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 3, pages 40-48, June.

    More about this item

    Keywords

    GDP; GDP and beyond; quality of life; Germany; TNS Infratest; SOEP; . - W3 Indicators;

    JEL classification:

    • B59 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Other
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy

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