The welfare economics of measuring sustainability: a new approach based on social choice theory and systems analysis
This paper presents a new measure of sustainability within a welfare economics framework. Gross domestic product (GDP) can be used as an indicator of sustainability if the GDP estimates are undertaken within a cost-benefit analysis framework based on social choice perspectives. Sustainability is dependent on a healthy and functioning socio-economic and environmental (SEE) system. Economic development can damage the SEE system through resource degradation, over-harvesting and pollution. This paper addresses the tensions between economic development and sustainability by undertaking a number of SEE-based adjustments to GDP based on social choice perspectives in order to measure sustainability. These adjustments include the environmental and social costs caused by economic development such as water pollution, the depletion of non-renewable resources, and deforestation. Thailand is used as a case study for a 25 year period (1975-1999). The results show a divergence in terms of GDP per capita and the SEE-adjusted GDP per capita figure. The paper concludes that, with increasing environmental and social costs of economic development, pursuing such extreme high growth objectives without due environmental and social considerations can threaten present social welfare and future sustainability. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.
Volume (Year): 13 (2005)
Issue (Month): 5 ()
|Contact details of provider:|| Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-1719|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nordhaus, William D, 1991. "To Slow or Not to Slow: The Economics of the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 920-937, July.
- 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, Volume 5, Economic Growth, pages 1-80 National Bureau of Economic Research, Inc.
- William D. Nordhaus & James Tobin, 1971. "Is Growth Obsolete?," Cowles Foundation Discussion Papers 319, Cowles Foundation for Research in Economics, Yale University.
- Hammond, Peter J, 1976. "Equity, Arrow's Conditions, and Rawls' Difference Principle," Econometrica, Econometric Society, vol. 44(4), pages 793-804, July.
- Munasinghe, M., 1993. "Environmental Economics and Sustainable Development," Papers 3, World Bank - The World Bank Environment Paper.
- Kneese, Allen V. & Schulze, William D., 1985. "Ethics and environmental economics," Handbook of Natural Resource and Energy Economics,in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 1, chapter 5, pages 191-220 Elsevier.
- Slesnick,Daniel T., 2001. "Consumption and Social Welfare," Cambridge Books, Cambridge University Press, number 9780521497206, February.
- Fisher, Anthony C. & Krutilla, John V., 1985. "Economics of nature preservation," Handbook of Natural Resource and Energy Economics,in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 1, chapter 4, pages 165-189 Elsevier.
- Richard T. Woodward & Richard C. Bishop, 1997. "How to Decide When Experts Disagree: Uncertainty-Based Choice Rules in Environmental Policy," Land Economics, University of Wisconsin Press, vol. 73(4), pages 492-507.
- Pezzey, J., 1992. "Sustainable Development Concepts; An Economic Analysis," Papers 2, World Bank - The World Bank Environment Paper.
- Solow, Robert M, 1986. " On the Intergenerational Allocation of Natural Resources," Scandinavian Journal of Economics, Wiley Blackwell, vol. 88(1), pages 141-149.
- Amartya Sen, 1999. "The Possibility of Social Choice," American Economic Review, American Economic Association, vol. 89(3), pages 349-378, June.
- Johansson,Per-Olov, 1993. "Cost-Benefit Analysis of Environmental Change," Cambridge Books, Cambridge University Press, number 9780521447928, February.
- Maler, Karl-Goran, 1985. "Welfare economics and the environment," Handbook of Natural Resource and Energy Economics,in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 1, chapter 1, pages 3-60 Elsevier.
- John C. V. Pezzey, 1997. "Sustainability Constraints versus "Optimality" versus Intertemporal Concern, and Axioms versus Data," Land Economics, University of Wisconsin Press, vol. 73(4), pages 448-466. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:wly:sustdv:v:13:y:2005:i:5:p:282-296. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.