Measuring Economic Welfare: What and How? / Gabriel Quiros-Romero, Marshall Reinsdorf.

Format:

Book

Government document

Author/Creator:

Quiros-Romero, Gabriel.

Contributor:

Reinsdorf, Marshall.

Series:

Policy Papers; Policy Paper ; No. 2020/028

Policy Papers

Language:

English

Subjects (All):

Deflation (Finance).

Physical Description:

1 online resource (49 pages).

Other Title:

Measuring Economic Welfare

Place of Publication:

Washington, D.C. : International Monetary Fund, 2020.

Summary:

Calls for a more people-focused approach to statistics on economic performance, and concerns about inequality, environmental impacts, and effects of digitalization have put welfare at the top of the measurement agenda. This paper argues that economic welfare is a narrower concept than well-being. The new focus implies a need to prioritize filling data gaps involving the economic welfare indicators of the System of National Accounts 2008 (SNA) and improving their quality, including the quality of the consumption price indexes. Development of distributional indicators of income, consumption, and wealth should also be a priority. Definitions and assumptions can have big effects on these indicators and should be documented. Concerns have also arisen over potentially overlooked welfare growth from the emergence of the digital economy. However, the concern that free online platforms are missing from nominal GDP is incorrect. Also, many of the welfare effects of digitalization require complementary indicators, either because they are conceptually outside the boundary of GDP or impossible to quantify without making uncertain assumptions.

Contents:

Contents

Glossary

INTRODUCTION

ECONOMIC WELFARE IN THE SYSTEM OF MEASURES OF WELL-BEING

A. Definition of Economic Welfare

B. A Taxonomy for Indicators of Economic Welfare and Well-being

C. Recommendation

ECONOMIC WELFARE IN THE SNA

A. Needs to Communicate, Disseminate and Use the Existing Welfare Indicators of the SNA

B. Central Role of Deflators in Measuring Welfare

C. Welfare Measurement and the Deflation of Income

D. Recommendations

DISTRIBUTIONAL INDICATORS IN A NATIONAL ACCOUNTS FRAMEWORK

A. Why Calculate Distributional Indicators in a National Accounts Framework?

B. Work on Distributional Indicators linked to National Accounts

C. Sensitivity of Results to the Definition of Income and Unit of Analysis

D. Price Changes Experienced by Households with Different Incomes

E. Recommendations

WELFARE AND DIGITALIZATION

A. Nonmarket Production and the GDP Production Boundary

B. Digital Products Supplied as Outputs of Market Producers

C. Free Services from Online Platforms

D. Nonmarket Production for Own Consumption Enabled by Digitalization

E. Volunteer-Produced Software and Content

F. E-Commerce and the Sharing Economy

G. Recommendations

FINAL CONCLUSIONS AND RECOMMENDATIONS

A. Indicators of Economic Welfare in the SNA

B. Distributional Indicators

C. Digitalization

BOXES

1. Indexes of Well-Being and Economic Welfare

2. Labor Share of Income as an Inequality Indicator

3. Are Free Platforms a Problem for Measuring the Level of GDP?

FIGURES

1. Economic Welfare Within the System of Measures of Well-Being

2. Real GDP and Real Household Disposable Income, France

3. Prices Used to Value Water and Diamonds in GDP Reflect Scarcity, not the Importance for Welfare

4. GDP Volume and Measures of Real Income, Australia, 2012-2018

5. Quintile Shares under Different Definitions of Household Income

6. Equivalized Adjusted Disposable Income by Quintile

7. Actual Final Consumption of Equivalized Households by Quintile

8. Bottom Quintile's Share of Adjusted Disposable Household Income 2017

TABLES

1. Economic Welfare Indicators in the SNA or Providing Additional Granularity on Items in the SNA

2. Indicators of Aspects of Economic Welfare beyond the Scope of GDP

3. Hard-to-Measure Sources of Economic Welfare Growth from Digitalization

References

ANNEXES

I. Sequence of Accounts of the SNA

II. Compiling Income Distributions in a National Accounts Framework.

Notes:

Includes bibliographical references.

Description based on publisher supplied metadata and other sources.

ISBN:

9781513544670

1513544675