An alternative to GDP to measure a nation's progress – the New Zealand experience

There is consensus among New Zealand policymakers and researchers that GDP is not a good measure of a nation’s well-being. But the debate about what metric should replace GDP is ongoing.
Last week’s well-being budget was based on the Livings Standards Framework (LSF), a set of well-being measures that include cultural identity, environment, income and consumption, and social connections. But these provide no overall index of the nation’s performance.
Our research uses the Genuine Progress Indicator (GPI). It shows that by that measure, New Zealand may be only half as well off, compared to conventional measures such as GDP.

Read more: New Zealand's well-being approach to budget is not new, but could shift major issues

Accounting for costs and benefits of economic activity
Globally, the GPI is the most widely used method to replace GDP. It is essentially a macro-scale analysis of the costs and benefits of activities associated with economic activity. It includes personal consumption of goods and services as one of the largest benefits, but it balances this with costs, which may include social factors such as income inequality and environmental factors such as water pollution...