Health-adjusted income: complementing GDP to reflect the valuation of life expectancy

With recent developments such as climate change and the pandemic, it has become increasingly clear that GDP is incomplete as a measure of progress, as it does not fully reflect important environmental or social challenges of our times. This calls for developing complementary metrics, which allow to better track the EU’s sustainability transition and its performance in global comparison. The 2023 Strategic Foresight Report of the European Commission presents the results of a pilot, which incorporates the often overlooked aspect of the health and life expectancy of a population into a beyond-GDP metric. The pilot provides an illustration of how health-adjusted income would compare for four major countries/entities, the US, China, India, and the EU in 2000, 2020, and 2040. This short report serves as its background, presenting the underlying methodology, data used, and the sensitivity of the results to various alternatives.