Genuine Progress Indicator

Genuine Progress Indicator

Like GDP or Gross Domestic Product, the Genuine Progress Indicator (GPI) is a measure of economic progress.  The difference is that GPI also takes into account social and environmental costs as well as the benefits of growth.

This concept has been around for some time now both internationally and in New Zealand, and it emerged in response to perceived shortcomings of the Gross Domestic Product (GDP) as a measure of societal and environmental wellbeing.  GDP simply measures the market value of all final goods and services made within the borders of a nation in a year.  For example it will note an oil spill as a benefit because work is created a result of the clean up. In the GPI the environmental and societal costs of an oil spill are subtracted from the economic benefits.

The Auckland Regional GPI takes into account eighteen components, ranging from unemployment, crime, overwork, loss of soils, to loss of air quality.  Every component represents either, an addition to, or subtraction from, the total personal consumption expenditure figures for each year.

This is the first step in developing a regional GPI and work will continue to refine and improve the methods.

For further information on the GPI, please contact the Social and Economic Research and Monitoring Team at the ARC.