Reference no: EM131176746

The goal of these adjustments is to show that GDP growth is not quite representative to human welfare growth, and that, in fact, "over time, more and more economic activity may be self-canceling from a welfare perspective" (Talberth, Cobb, & Slattery, 2006). In fact, Talberth et al. show that while GDP per capita in the US grew by roughly 133% between 1950 and 2000, the GPI only grew by about 30% during the same period.

The GPI is primarily a longitudinal tool, useful for making policy recommendations based on perceived economic, social or environmental trends. For example, Talberth et al note that household labour represented 58% of personal consumption in 1950, but only 33% in 2004 - signifying "our increasing reliance on the market to provide services formerly contributed by households" and that the GPI deductions were comprised of 35% in the environmental depletion domain in 1950, and 59% in 2004 - signifying a significant increase in the relevance of such costs (2006). These kinds of trends are simply not available in the GDP, resulting in governments and research institutions around the world sponsoring GPI studies of their own. The Pembina Institute in Alberta has published a provincial GPI and used it for legislative advocacy since 2001, encouraging the government to assess "the full benefits and full costs of all forms of capital in Alberta - human, social, natural and built