Genuine Progress Indicator (GPI)

The Genuine Progress Indicator is an alternative to gross domestic product intended to more fully measure a nation's economic well being by starting from personal consumption spending, as GDP does, and then adjusting it for factors GDP leaves out, including income distribution, the value of unpaid household and volunteer work, and the costs of pollution, resource depletion and long term environmental damage. Unlike GDP, which counts spending on cleaning up pollution as economic growth, the GPI treats the pollution itself as a cost and subtracts it, so an activity generating both output and environmental harm does not automatically register as an improvement. Developed in 1995 by Clifford Cobb, Ted Halstead and Jonathan Rowe, the GPI has since been adopted in ecological economics and by some governments and U.S. states as a supplementary measure alongside GDP.