Tuesday, 17 January 2012

The pros and cons of the Canadian Superindex

This post by Donato Speroni originally appeared in Italian in the Numerus section Corriere Della Sera and was also published on the Istat  BES blog.

Canadians are the only ones, along with the small and far away country of Bhutan, to have developed an all-encompassing "happiness index" to be compared with GDP (gross domestic product). This work took several years and finally came to a tentative conclusion: Roy Romanow, Chair of the advisory board of the University of Waterloo who created the Canadian Index of Wellbeing (CIW), has announced that from 1994 to 2008, GDP in Canada has increased in real terms by 31%, while well-being has grown only 11%.

"There are some very, very troubling signs," Romanow said in an interview.
"I think if we continue on this trajectory we're going to have bigger and bigger disparities. You can never build a solid political, social and economic community with wide disparities."

The final report of the first conclusions of the CIW was released on October 20, 2011 and had a lot of attention in the local press, including the Huffington Post Canada. The methodology has been described previously on Numerus, and  in fuller detail on Wikiprogress.

At a time when Italy is developing its BES (Benessere equo e sostenibile: fair and sustainable new measures of well-being), one wonders if the road to a single encompassing index which brings together the different sectors (in the Canadian case eight indicators, each based on eight different data, for a total of 64 series) is a useful and viable way. Without presuming to give a definitive answer, we can see the pros and cons.

Going against the Superindex is the fact that it is snubbed by many methodologists because its construction is clearly questionable. We have already seen how difficult it is to determine the weights of the different domains of well-being: is health more important, for example, or are social relations? The Canadians have solved the problem by giving all of the domains the same weight, while the OECD has instead allowed users to attach the weights they prefer. But it is clear that it does not arrive at a unique indicator.

In favour of Superindex is that it obviously has the most media impact, i.e. the possibility of building a truly alternative number or at least one that’s complementary to GDP. Proponents point out that construction of a composite index for each sector, encompassing for example all aspects of health or safety, is equally questionable, so you might as well go one step further and get to a single number. 

A composite superindex undoubtedly involves a great loss of information compared to the so-called "dashboards" that present several important data simultaneously. But, as has been done in Canada, having the indices for each sector presented to the public as they become available, concentrating for example on the environment one month, then the relationship between citizens and institutions or education the month after, can attract continuous attention from the media about the different components of human well-being. At that point the Superindex would be a synthesis of all this work: an additional information, to complement the GDP, without hiding the wealth of information which was used to build it.

We repeat, however, that the path to get to Superindex is very questionable. It is no coincidence that in Canada this process has been developed by an independent university and not by Statistics Canada. The CIW data come largely from official statistics, but the production was left to a private body. On the other hand, (on this controversial topic, there is always a pro and a con) can we imagine building consensus on a Superindex in Italy without the blessing of official statistics?

No comments:

Post a Comment