German National Welfare Index

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German National Welfare Index (NWI)

The National Welfare Index was developed via a research project founded by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) and Federal Environment Agency (UBA) as a contribution to the debate on a more sustainable economy. The project recognises that GDP or GNI is still regarded as the key performance indicator of national economies, but it suggest that its value should be fine-tuned with additional elements. It suggests an NWI that includes 19 variables and is provided in monetary form as yearly flux quantities. The calculations of the NWI for the Germany economy proves that economic growth and improvements in welfare are not necessarily interlinked and the latter may be achieved even without growth in GDP or GNI. [1]

The Components of the Index

The starting not for the NWI is the value of private consumption, the consumption of goods and services of households. This value is then weighted with income distribution among poorer and richer households and fine-tuned with unpaid household and voluntary work (components 2-4), with indicators representing social (see components 5-10) and ecological factors (see components 11-20).

  • 1. Index of Income Distribution
  • 2. Weighted consumer spending
  • 3. Value of domestic work
  • 4. Value of voluntary work
  • 5. Public spending on health and education
  • 6. Costs and benefits of consumer durables
  • 7. Costs of commuting between home and work
  • 8.Costs of traffic accidents
  • 9. Costs of crime
  • 10. Costs of alcohol, tobacco and drug use
  • 11. Social costs of compensation for environmental damage
  • 12.Damage due to water pollution
  • 13. Damage due to impacts on soil
  • 14. Effects of air pollution
  • 15. Damage due to noise
  • 16. Loss or gain through changes to habitat
  • 17. Damage due to loss of arable land
  • 18. Substitution costs generated by exploitation of non-renewable resources
  • 19. Damage due to C02 emissions
  • 20. Costs of nuclear energy use

See also

[[Category:European Network]



Environment Policy Research Centre: The National Welfare Index as a Contribution to the Debate on a More Sustainable Economy

External links