Including Health in Global Frameworks for Development, Wealth, and Climate Change Workshop Summary (2014) / Chapter Skim
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3 Health in the Context of Sustainable Economic Frameworks
3 Health in the Context of Sustainable Economic Frameworks
Pages 25-42
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From page 25... ...
University, featured a discussion about efforts to measure inclusive wealth and the possibility of including human capital and health in that measure. The third presentation, from Richard Easterlin, University of Southern California, focused on measures of subjective well-being and happiness and how those measures could be valuable for policy makers.
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Mumford outlined his presentation as an introduction to national wealth accounting and using GDP to measure economic development, as well as addressing challenges that arise. National Wealth Accounting Mumford mentioned various ideas that have been proposed for adjusting GDP, including green or sustainable GDP measures.
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There are three components to wealth that have specific challenges to optimal measurement: reproducible capital, natural capital, and human capital. Reproducible capital -- physical assets -- is the kind of wealth that is currently measured best.
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Appraising health presents a great challenge for including human capital in measures of wealth moving forward. GDP Challenges: Example of Trinidad and Tobago Countries collect large amounts of data to produce GDP statistics, and GDP is narrowly focused on income accounting.
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Executive Director, International Human Dimensions Programme, United Nations University The focus of Anantha Duraiappah's presentation spans three phases of work on inclusive wealth: (1) the 2012 Inclusive Wealth Report (IWR)
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challenges associated with developing the 2014 IWR report focusing on human capital and health. Overview of Inclusive Wealth Duraiappah noted that the three main points that define inclusive wealth as a measure beyond GDP are that it is a new way to measure progress, a comprehensive approach to health and well-being, and a focus on the sustainability of human well-being.
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In this graph, China has one of the largest changes in inclusive wealth, which is due to its buildup of produced and human capital and a drawdown on natural capital, said Duraiappah. Duraiappah noted that although health was not included in the human capital computations, it was discussed in preparation for the 2012 IWR.
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Whether thhis is the righht shadow vaalue to measuure health capital is und determined. Currrent Effortss to Measure Inclusive W Wealth and th he 2014 IWR Du uraiappah revvisited the three main compponents of heealth: the utiliity of sim mply being heaalthy, the pro oductivity thatt comes from m being healthhy, and th he value of liv ving an extra year.
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" Easterlin stated that there is always a question as to whether the measures of subjective well-being are meaningful. In a report commissioned by President Nicolas Sarkozy of France in 2009, 25 leading economists agreed that "research has shown that it is possible to collect meaningful and reliable data on subjective as well as objective well-being.
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Evidence shows that economic growth does not in itself increase subjective well-being. Longitudinally, rapid economic growth does not impact subjective well-being; however, there is an observed positive, short-term relationship between GDP growth and subjective well-being.
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. Easterlin observed that welfare states with more generous benefits also experienced higher reported values of satisfaction in work, health, family life, and overall well-being than the semi-welfare states, despite similar GDP per capita.
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David Simpson began his presentation by taking a brief, lighthearted turn toward two economics jokes to demonstrate the difficulty of performing accurate national accounting (see Box 2-1)
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We can talk about the prospects for world peace in nuclear technology." Einstein went to the third cabin mate and said, "And tell me, sir, what is your IQ? " The third cabin mate said, "70." Einstein scratches his head for a second, thinks about it, and says, "What's your projection for GDP?
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Instead, Simpson suggested that the accounts should be offset by willingness to pay to avoid being sick. Environmental accounts may omit resource depletion, household production, illegal or "off the book" activities, production in the public sector, education, and health.
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Mumford said that a more realistic way to look at the issue is to recognize the flow of income and the simultaneous depletion of capital stock. For example, the cost of harming wetlands is not a cost that comes from income flow, rather, it is harming capital stock that could have provided future valuable services.
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He expressed hope that both types of measures would be used and mentioned that only recently has there been a strong demand for using wealth accounting frameworks to evaluate sustainability. Past efforts include the United Nations' IWR and the World Bank's efforts to measure net savings.
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Duraiappah added that unconditional citizen income could be conceptualized as unconditional access to instrumental freedoms, rather than restricted income base, which would make a distinction between one's access to opportunities versus endowments. He mentioned that work from Amartya Sen, the 1998 Nobel Prize winner in economics, is a resource for this idea.
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. UNU-IHDP and UNEP (United Nations University-International Human Dimensions Programme and United Nations Environment Programme)
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