Methodological developments in US state-level Genuine Progress Indicators: toward GPI 2.0

The Genuine Progress Indicator (GPI) has emerged as an important monetary measure of economic well-being. Unlike mainstream economic indicators, primarily Gross Domestic Product (GDP), the GPI accounts for both the benefits and costs of economic production across diverse economic, social, and environmental domains in a more comprehensive manner. Recently, the GPI has gained traction in subnational policy in the United States, with GPI studies being conducted in a number of states and with their formal adoption by several state governments. As the GPI is applied in different locations, new methods are developed, different data sources are available, and new issues of policy relevance are addressed using its component indicators. This has led to a divergence in methods, reducing comparability between studies and yielding results that are of varying methodological sophistication. In this study, we review the “state of the art” in recent US state-level GPI studies, focusing on those from Hawaii, Maryland, Ohio, Utah, and Vermont. Through adoption of a consistent approach, these and future GPI studies could utilize a framework that supports more uniform, comparable, and accurate measurements of progress. We also identify longer-term issues, particularly related to treatment of nonrenewable resource depletion, government spending, income inequality, and ecosystem services. As these issues are successfully addressed and disseminated, a “GPI 2.0” will emerge that better measures economic well-being and has greater accuracy and policy relevance than past GPI measurements. As the GPI expands further into mainstream policy analysis, a more formal process by which methods could be updated, standardized, and applied is needed.