Abstract
Claims to the inadequacy of GDP growth as an indicator of well-being improvement are widespread. Yet the notion of well-being is very broad, hence difficult to quantify, so alternative indexes (e.g., ISEW, GPI) may also be deficient. This article approaches well-being from a multi-dimensional perspective which, unlike earlier attempts to incorporate inequality and environmental variables, focuses especially on “ecological inequality,” or inequality in the distribution of the social cost associated with resource depletion. A methodology for assessing well-being improvements is developed, one which includes an accounting for ecological inequality, and is applied to four countries: Brazil, Costa Rica, Indonesia, and the Philippines. The variability in the results strongly suggests that in addition to depending on the subjective perspective of the policymaker regarding the relative importance of the income growth realized by different population groups, well-being assessments depend critically on the existing ecological distribution. More research into quantifying ecological distribution is therefore warranted. Absent significant progress in this area, sensitivity analysis such as that conducted here may inform policy better than GDP or alternative well-being indexes or aggregates.