How do we measure standards of living?

Janie's Cafe in Longmont, Colo. Boulder County is thought to be an affluent area, but the concerns at this coffee shop were crime, jobs and education.


Kai Ryssdal: Consider this for just a second: We didn't really start getting better gas mileage from our cars until we started measuring miles per gallon and then slapping a sticker with the results onto every new car on the lot. So, by extension, what we measure directly affects what we get. But what should we be measuring if we want an economy that works better for more people? Economists, as you know, love to measure things. We've got GDP and productivity and inflation numbers coming out our ears. But maybe we're doing it wrong.

That's one of the ideas behind our series, Economy 4.0. Our special correspondent David Brancaccio is exploring how we might get the global economy to a better place. And one way might be to go beyond the classics like GDP or productivity and look at some new numbers. Here's David.

David Brancaccio: You're thinking a story about New Numbers is going to start with the sonorous tones of an economist. Well, no. Let's start with Wide Mouth Grin.

Band Wide Mouth Grin singing

Wide Mouth Grin is this band, based in Boulder, Colo. Indie, right?

Laura Casciardi: Indie, the first thing I think of is independent. I think of underground, but still pleasing to the mass public.

The band's lead singer Laura Casciardi. Think of alternative economic indicators as "indie" numbers. Not yet mainstream, maybe less corporate and more, I dunno, real, as in reflecting the more down-to-earth wants and needs of people. Indie as opposed to...

Casciardi: You know, kinda the Justin Bieber, Lady Gaga, on the radio all the time.

Convention dictates a few bars of Justin Bieber right here, but I refuse. Instead, let's share a line from Nobel Prize winner Joseph Stiglitz who's on a crusade for alternative economic indicators. "What you measure affects what you do," he says. "If you don't measure the right thing, you don't do the right thing."

Alternative measures come in all shapes and sizes and that's why I'm here in Boulder County, Colo.

Morgan Rogers: I do like numbers a lot. I am the numbers geek of the office.

Morgan Rogers is, for a person who watches statistics, pretty indie herself. She telemark skis and likes "Band of Horses," which still has some indie cred, right? Her suspicion of things mainstream also extends to her way of assessing where she lives. Rogers believes typical measures -- jobs, household wealth -- can be misleading.

Rogers: We have maintained low unemployment rates, our median family income is among the highest, in fact, we were named the 12th wealthiest metropolitan statistical area based on median household income several years ago.

In most places, the conclusion might be: Streets are paved with gold, end of story. But her employer, a charity called the Community Foundation of Boulder County, asked her to gather a crop of what are called "Community Indicators."

Rogers: It's things like a vibrant economic base, but it also includes things like access to housing, access to education, access to health care, vibrant arts and cultural life, civically-engaged residents.

Community Indicators track what's working -- like environmentalists love the 67 percent of land preserved as open space here. And they track what's not working. For instance, the public schools are doing great with middle class and wealthy students and failing the poorest. And then there are demographics. Rogers gets snarky on this subject in her glossy indicator "Trends" report.

Roger: "Who are we? If you think Boulder County is home only to a bunch of middle-aged wealthy white guys and gals, you're mostly right. Still you're not paying close enough attention."

Diversity where many least expect it. One in four here is a person of color. Eleven percent live below the poverty line. That's because we're talking the whole county, not just Boulder city.

Sound of car radio

The short drive between Boulder and the city of Longmont is said to be the longest dozen miles in Colorado.

Artist: Longmont is 12 miles away and you go from California to the Midwest in a matter of 15 minutes.

This artist from Longmont says the real divide is socio-economic. In Boulder, I got my high-end caffeine at Bookends Cafe, where the big concern was the effect of high real estate prices. In Longmont, a cup of joe was a quarter the price here at Janie's Diner, where concerns are more down to earth including crime and the economy.

Teresita Zavalas' son was a good student in high school.

Teresita Zavalas: Of course, he can't go to college, because there's no money to go because there's no job.

Not exactly the portrait of a community that can rest on the laurels of its high average income. And it hasn't. Stung by the data about the academic performance of students from low-income, mainly Latino families, the community responded with a new focus on preschoolers.

Caregiver talking to child in Spanish

A caregiver tries out reading strategies for youngsters. The training courtesy of PASO -- for Providers Advancing School Outcomes -- a non-profit that turns babysitters into informal preschool educators. But funding was scarce. Armed with the school stats, the Community Foundation persuaded residents to dig deep to support a big grant for PASO, which in turn unlocked an impressive chunk of change from the state.

The inequality measured in Boulder schools is just one of the many indicators an international commission wants governments to monitor. It's urging authorities to get creative when it comes to the social and economic indicators they measure and track. It's a vivid sign that alternative indicators are moving from indie to the mainstream world of government policy.

In Boulder County, Colo., I'm David Brancaccio for Marketplace.

Brancaccio: David and Economy 4.0 are online for us too -- blogging, among other things, about alternative indicators like the Happy Planet Index or the Google Price Index we told you about earlier. Photos and stories from the road as well.

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I'm tired of all the talk but no action. The only way we can get out of this mess is to be more relistic and stop being so un educated about the real world. How many people actually know that, what we are tought in school about the rest of the world is false! How many people know that most European country's have become alot more advanced than us? How many people know that they dont have landfills? How many people know that they only pay for 15% of thier energy because they know how to produce 85% from thier own waste? They use everything! How many people know that most europeans speak 2 or more languages. We have to be more aware of the the rest of the world to improve our own! Germany for example, had solved all their eco problems ten years ago. We have to be more realistic and educated about the rest of the world that has been in existance hundreds of more years than our own! And if you think that the media teaches us everything we need to know about the rest of the world. only the bad news sells!! Have you been out side The United States? Have you been to other countrys? Have you seen? Did you experience anything about the rest of the world, other than what you have seen on TV? Well, I have!!!!

Does anyone know something about the use of the Triple Bottom Line concept to asses a Country Brand?

If so, an specific methodology to do it.

Thank you !!!

There is even a national movement to educate the public about alternative indicators for well-being. We have lots of info for learning about alternative indicators and videos from the conference we sponsored this last June in Vermont "Changing what we measure from Wealth to Well-Being" at www.gnhusa.org Gross National Happiness is one comprehensive set of indicators beyond GDP.
Tom Barefoot- tom@gnhusa.org

Good story, and thanks to "Jake in the Bay Area for the kind words about Take Back Your Time. In Seattle, we are also developing an indicator based on subjective assessments of well-being using a model recently pioneered in Victoria, BC. The first of all the city indicator projects, Sustainable SEattle, and many other organizations have gotten on board this effort. We will combine nine key subject well-being indicators with 9-18 objective indicators in the same areas to create a new index. If you want more information regarding this contact me at:jodg@comcast.net. thanks. John de Graaf

The Children and Families Commission of Orange County (the county's First-Five commission) has been publishing a community indicators report for the last ten years. This includes measures such as unemployment, academic performance index, percent of families who can afford fair market rent or a single-family home at 85% of median value, obesity rates in students, violent and property crime rates, per capita water usage, and those are just the overview measures. They're broadly grouped into economic and business climate, technology and innovation, education, community health and prosperity, and public safety. They operate, like all the first-five commissions, as a foundation that provides grant funding and technical assistance to program serving goals they feel will prepare kids for school by age 5, but the broad indicators report is presented by the county commission every year. Obviously, whether or not they act on it is another matter, as the first-five commission is a state entity independent of the county, but it's pretty thorough, including trend analysis and benchmarking against state and national averages as well as against a universe of peer group counties. I'll sort of agree with the guy beneath who points out these aren't really "economic" indicators, at least all of them aren't, but they are prosperity measures of well-being and projected future well-being encompassing population averages as well as disparity between subgroups. So they certainly give a more complete picture of community health, and at the national level, national health, which it is the primary mission of government to advance ("to promote the general welfare"). It's certainly worth keeping track of and publicly discussing more than just business cycle indicators.

When I heard the set up for the story, I thought I was going to hear about metrics that may impact the economy: graduation rates, new business starts, new patent filings...

Instead I heard a bunch of gobbledygook about SOCIAL indicators, not ECONOMIC indicators. Mostly measurements of rich vs. poor. And worse, the statistics we're supposed to pay attention to as part of Economy 4.0 don't provide any meaning.

So some people are wealthy and others are not. We quantify it. And I say "so what?" What does it mean?

And I just love it when Liberals talk in code words like "access." I have access to a Bentley dealership, but I cannot afford a Bentley. Should the rest of society cry for me?

What does "access to healthcare" mean? "Access to education." Aren't we just talking in code for free or government subsidized services?

And what does a "vibrant arts and cultural life" mean? How do you measure something like this?


jake 3_14: It is the 'U.S. Forest Service' - look it up. Otherwise, great points on indicators like happiness or sustainability. Alternative measures are well worth this effort, because traditional GDP measures that include the expense of incarcerating violent criminals, the costs of dropping bombs on middle easterners (some who may deserve it), and other 'externalities' just don't reflect positive economic benefits. But come on, Boulder? Almost as bad as the "Peoples Republic of Berkeley". Sure, Boulder County 'suffers' from 11% population and it may be hard for people who telemark ski and enjoy soy-organic-agave latte's. The rest of the country actually has a 2009 poverty rate of 14.3%, and I doubt they enjoy the access to housing, education, open space, good schools, etc. that Boulder County residents enjoy. Boulder County may showcase the disparity it economic attainment (regardless of the indicator used), but your should really compare those "suffering" in Boulder County to somewhere with a poverty rate well below the national average, instead of just some hard up indie rockers and their hipster brethren in Longmont (which has a higher household median income compared with the rest of CO).

Gifford Pinchot, the first head of the U.S. Forestry service, and a broad thinker, once defined the purpose of an economy as the largest good for the largest number of people over the longest time period. There is now a vibrant and growing movement who interpret that statement to mean a happy (not wealthy), egalitarian (with a small gap between rich and poor) society that deliberately pursues sustainable development. This is the opposite of how the U.S. is structured to function, but there are quantitative ways to measure happiness, largely as an outcome of Bhutan's pursuit of a Gross National Happiness index, rather than GDP. Such measures have been introduced in Victoria, Canada and Seattle, Washington. Schools like the Bainbridge Graduate Institute in Seattle offer entrepreneurs an MBA or a certification in sustainable business.

One of the main components of pursuing happiness rather than material wealth is to simplify your life and slow it down. The "Take Back Your Time" initiative (www.timeday.com) is a great starting point for implementing a lifestyle where you're in control of how you spend your time, and spending it for gains that wealth won't buy. You can listen to an interview with John de Graaf, National Coordinator of Take Back Your Time, on an 8/24/10 episode of "A World of Possibilities" (http://aworldofpossibilities.org/program/life-in-slo-mo).

I hope to hear more about alternate economic views, ones that emphasize the needs of people over the insatiable corporate appetite. Good to hear DB back on the beat...KenWade NYC

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