 Economic growth, inequality, and well-beingRichard B. Howarth and Kevin Kennedy Ecological Economics, 2016, vol. 121, issue C, 231-236 Abstract: In advanced industrial societies, rising levels of inequality have contributed strongly to the observed gap that has emerged between per capita income and the Index of Sustainable Economic Welfare (ISEW), which in its current versions is known as the Genuine Progress Indicator (GPI). Yet the ISEW/GPI approach to measuring the social costs of inequality has been criticized as ad hoc. The present paper reviews the literature on this topic and efforts to resolve it based on the construction of indicators grounded in: (a) a classical utilitarian ethical framework; and (b) empirical evidence on the relationship between income and well-being. In the United States, after-tax income per capita grew at an annual rate of 1.7% between 1979 and 2011. A growth rate of 1.2% per year arises when income is adjusted to account for the social costs of inequality. The most common adjustment used in ISEW/GPI studies yields a similar growth rate despite much smaller subtractions from baseline income. Keywords: Index of Sustainable Economic Welfare; Genuine Progress Indicator; Inequality; Relative income effects (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:121:y:2016:i:c:p:231-236 DOI: 10.1016/j.ecolecon.2015.10.005 Access Statistics for this article Ecological Economics is currently edited by C. J. Cleveland More articles in Ecological Economics from Elsevier |
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