IGP Stories

Prosperity Beyond GDP: Measuring What Matters to People

Nikos Tzivanakis

15 May 2024

The recent bulletin from the Office for National Statistics (ONS) offers an in-depth assessment of the UK's well-being beyond traditional economic measures like GDP. It identifies significant societal challenges such as financial burdens, social cohesion, and life satisfaction. These findings are consistent with what our Citizen Prosperity Index (CPI) indicates, offering a comprehensive approach to understanding prosperity.

The ONS report identifies significant economic strains on households, with 21.8% facing financial difficulties. This financial strain, exacerbated by inflation and rising housing costs, reinforces the CPI's emphasis on livelihood insecurity. Our CPI acknowledges that secure livelihoods, which include a consistent income, affordable housing, and financial stability, are critical to prosperity.

The Prosperity in east London 2021-2031 longitudinal study (to be published in June 2024) which uses the CPI demonstrates the prevalence of financial stress and insecurity. This underscores the need for policies that address the broader dimensions of economic security.

The ONS report also identifies social cohesion as an important issue, highlighting a significant decrease in time spent on social and recreational activities. This decline emphasises the importance of strong social networks and active community involvement. Equally, our CPI captures belonging, connections and leisure as one of its key domains. And the findings from the east London study indicate that promoting social unity is critical for overall well-being and should be a primary focus in policy development.

One of the most significant findings in the ONS report is the decline in life satisfaction, with an increase from 4.4% to 5.8% over the last five years. This decline could be associated with increased financial burdens and decreased social cohesion, which have been documented. The CPI combines these elements by measuring various aspects of well-being and prosperity across multiple domains, such as health, financial security, and social engagement.

Multidimensional measures such as the Citizen Prosperity Index are required to promote economic growth, well-being, and prosperity beyond GDP. The CPI provides an understanding of local needs and challenges, allowing policymakers to identify specific issues within communities and allocate resources more precisely and efficiently. By incorporating these comprehensive insights, policymakers can create more effective strategies to improve overall well-being, ensuring that economic, social, and environmental factors are considered in pursuing a more equitable and prosperous world.

Photo by Vonecia Carswell on Unsplash

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