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'Main Street' economic conditions misread by GDP
Date:2/18/2010

COLLEGE PARK, Md. Traditional gauges of economic activity severely overstate the standard of living as experienced on 'Main Street,' say University of Maryland researchers, who have worked with their state officials to apply a more accurate and greener index.

Maryland recently became the fourth U.S. state to adopt the Genuine Progress Indicator (GPI) as a supplement to the traditional state-level economic index, the Gross State Product (GSP).

"This is not merely a question of dueling statistics the difference in the two figures can be startling and represents very different pictures of our standard of living," says Matthias Ruth, director of the University of Maryland's Center for Integrative Environmental Research (CIER), which calculated the GPI for the state. http://www.cier.umd.edu/mruth.html

"In 2000, the classic economic measure showed Maryland more than 50 percent wealthier than we actually were, as measured by the GPI." Ruth explains.

"The traditional measure is inflated by costs that are counted as if they were benefits, such as the conversion of agricultural lands and coastal areas to strip malls and developments," Ruth adds. "It failed to capture many aspects of life we value from environmental quality to livable communities." http://www.green.maryland.gov/mdgpi/mdgpioverview.asp

To remedy the costs and benefits excluded by the GPS, the GPI formula includes 26 economic, social and environmental factors.

"This tool allows us to account for the environmental and social costs of problems like air pollution, crime and income inequality, as well as the values of benefits like clean water, education and volunteerism," says Maryland Governor Martin O'Malley. http://www.green.maryland.gov/mdgpi/indicators.asp


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Contact: Neil Tickner
ntickner@umd.edu
301-405-4622
University of Maryland
Source:Eurekalert  

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