Genuine Progress Index or GPI is a metric which measures economy
of a country. It is considered an alterntive of GDP (Gross Domestic
Product).
Features of GPI:
- It is a metric to measure economic position of a country,
- It is considered a replacement/ supplement of GDP.
- It takes into account environmntal and social factors along
with productivity of a country to analyse its economic status.
- It includes costs of performing economic activities which
negatively affects the country's environment and the society.
- Cost of resource depletion
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- Cost of air, water and noise pollution
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- It focuses on providing accurate and comprehensive information
about well-being and sustainable development of an economy.
- It was developed out of theories of green
economics ( which sees economics as a part of
ecosystem).
GPI a better indicator than GDP/GNP when it
comes to economic health. Reasons-
- GDP is a measure of an economy based on the value of goods and
services produced in the country,whereas, GPI is an
replacement/ supplement of GDP which measures the economic position
of a country based on factors considered by GDP metric and with
added environmental and social factors effecting the economy.
- GPI takes into account broader pespective to measure the
well-being of a nation whereas GDP only considers nation's
income.
- GPI metrics helps to analyze whether the economic production
and consumption of a country has a negative or positive effect on
the heath of the nation and its economy. It measures the cost
incurred in repairing pollution, poverty and other economic issues
of a country and enables balanced GDP spending. But GDP only
considers productivity of a country and ignores cost/loss of
increasing that productivity.
- GPI involves measurement of certain factors which does not have
proper quantitative indication like resource depletion,crime,ozone
depletion, pollution, poverty, eductation indicator,etc. and
calculates the cost of their empact on economy. But GDP takes into
account only factors with monetory value.
- GPI is a more reliable measure of economic progress as it
distinguishes between the overall "shift in 'value basis of a
product' adding its ecological empact into equation'.
- GPI = GDP- the environmental & social costs whereas GDP =
Consumption + Government spending + Investment + Net export
- GPI helps in linking local consumption patterns with global
consequences. For example GPI measures cost of resource depletion
in a country and resource depletion due to consumption in the
country leads to global resource depletion as well.