'Beyond GDP' Requires Replacement, Not Just Additional Metrics

Area of Science:

• Socio-economics
• Environmental Policy
• Political Science

Background:

• Political decision-making is heavily reliant on Gross Domestic Product (GDP) metrics.
• This reliance often overlooks critical social and environmental concerns.
• Existing indicator dashboards have minimally influenced core policy decisions regarding GDP's limitations.

Purpose of the Study:

• To argue for the replacement of GDP with a superior comprehensive aggregate metric.
• To introduce and formalize the concept of "perception distance" to GDP.
• To compare potential alternative metrics based on their similarity to GDP.

Main Methods:

• Conceptualization and formalization of "perception distance" to GDP.
• Comparative analysis of key alternative aggregate metrics.
• Evaluation of how a new headline metric interacts with disaggregate domain indicators.

Main Results:

• The dominance of GDP in political decision-making can only be overcome by its replacement with a comprehensive aggregate metric.
• "Perception distance" provides a framework for evaluating alternative metrics.
• A superior aggregate metric is likely to reduce tension with disaggregate indicators for wellbeing, inequality, and sustainability.

Conclusions:

• Replacing GDP with a well-chosen aggregate metric is essential for balanced policy-making.
• The "perception distance" concept aids in selecting an effective replacement metric.
• A new headline metric can improve the integration of social and environmental indicators into policy.