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New wellbeing index looks beyond economic growth

A new measure of quality of life in Canada shows that the strong economic growth of the national economy over the last two decades has not been matched by improvements in actual wellbeing.

The Canadian Index of Wellbeing (CIW) Network, a non-profit research group based out of the University of Waterloo, report an 11 percent increase in Canadian quality of life between 1994 and 2008. This is dwarfed by the 30 per cent rise in gross domestic product (GDP) over the same period.

"You can increase GDP by putting more people in jail or by encouraging people to smoke and get lung cancer," says Charles Ungerleider, a professor of the sociology of education at UBC who sits on the CIW advisory board. "Economics is an important part of life, but it is not the only part of life."

GDP measures the value of all domestically produced final goods and services sold within a country over the course of one year.

To construct the index, the CIW team collected data from eight different areas of life: community vitality, democratic engagement, education, the environment, public health, leisure and culture, material living standards, and time use.

GDP is one of the 64 statistical variables used to construct the index. While the CIW is likely to be modified at a later date, the current version weights all variables equally -- meaning that no one factor is considered to be more important than any of the others.

According to a report, which can be downloaded at the CIW website, while measures of community vitality, democratic engagement, and education rise steadily over the time period in question, environmental degradation and a more hurried and stressful lifestyle for most Canadians produced a drag on overall welfare.

The report also found that GDP growth outpaced every one of the eight categories of life measured. "Living standards," the domain that saw the strongest growth, improved by 26.4 per cent over 15 years. A broad measure of material well-being, this figure falls below the GDP measure, tempered by rising inequality, lower quality of employment, and rising home prices.

Spurred in part by the financial crisis, many politicians, policy experts, and economists have in recent years called for alternative measures of social wellbeing.

In 2008, French President Nicolas Sarkozy established the Commission on the Measurement of Economic Performance and Social Progress to research and devise different methods of measuring quality of life.

The commission was chaired by Nobel prize winning economist Joseph Stiglitz, who, during an interview, publicly exhorted political leaders to "avoid GDP fetishism."

Because the CIW provides broader view of quality of life in Canada, Ungerleider says he hopes that policy makers will view it as a more useful tool in evaluating the impact of public programs and laws.

"The most important thing is to get people to dig behind the number and say, if we are concerned about our progress in a particular area, what are the factors and the policy levers at our disposal to bring about that progress," he says. "Numbers are not the end point -- they are in many cases just the starting point."

Ben Christopher reports for The Tyee

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