Design and meaning of the genuine progress indicator: A statistical analysis of the U.S. fifty-state model

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The Genuine Progress Indicator (GPI) was designed to reveal the trade-offs between costs and benefits of economic growth. Although originally estimated and contrasted with Gross Domestic Product (GDP) at national scales, an interest in a state-level adoption has developed in the United States to inform and guide policy. As GPI scholarship and a community of practice has developed, questions have arisen about the quality and legitimacy of the GPI. To investigate, we apply a composite indicator analysis developed by the Organization for Economic Co-operation and Development (OECD) to fifty US state GPI estimates using a consistent method. We focus on a multi-variate analysis of the structure of the composite, sensitivity to weighting and aggregation assumptions, and the statistical relationship with other well-being indicators. Results are heavily influenced by a small number of components, point to a number of unintended policy outcomes, and have mixed relationships with allied indicators. The study suggests steps towards shared GPI governance among practitioners and researchers, consideration of data parsimony and potential double-counting, and data selection criteria to help fill gaps, prioritize needs, and better articulate the purpose and meaning of GPI.

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