1001.0 - Annual Report - ABS Annual Report, 2001-02  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 16/10/2002   
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Contents >> Section 2 - Special Articles >> Chapter 3 - Measuring Australia's Progress - Developing the content of Measuring Australia's Progress

Within the context of the consultation process the key issue in respect of Measuring Australia’s Progress was developing the content of the publication. The content design work proceeded in four steps:

  • choosing a presentational model;
  • identifying the dimensions of progress;
  • selecting the ninety or so indicators that would give statistical expression to those dimensions; and
  • deciding on the more compact subset of fifteen ‘headline’ indicators.


Choosing the presentational model

The ABS considered three possible models for presenting the measures of national progress - the one-number approach; the integrated accounting approach; and the suite-of-indicators approach.

One-number approaches combine information about multiple aspects of progress (such as, health, income and pollution) into a single composite indicator. Trends in the composite indicator may then be compared with more traditional measures such as gross domestic product. Combining multiple variables inevitably requires the compiler of the composite indicator to assign weights or values to different aspects of progress. So, for example, should a one-year extension of life expectancy be weighted more or less heavily than a 10 per cent increase in average income? The ABS believes that it should leave valuations of this kind to the users of its statistics, rather than imposing its own valuations.

Integrated accounting framework approaches present social, economic and environmental data in one integrated system of accounts. This is a powerful tool for analysis, but is complex and designed for use by experts. And, while the ABS is working toward integrated accounts, it will be some years before it will be possible for them to span all three domains.

Suite-of-indicators approaches display key measures of national progress side-by-side and discuss the links between them. Readers make their own evaluations of whether the indicators together imply that the nation is, on balance, progressing and at what rate. This is the approach used in Measuring Australia’s Progress.


Identifying the dimensions of progress

The ABS considered four main sources of suggestions regarding which aspects of progress to measure - international practice, national statistical frameworks, current policy issues, and the views of key stakeholders including the Australian community.

In identifying the dimensions of progress, it was recognised that international and national statistical agencies are undertaking a great deal of work to develop measures of progress (and of allied concepts such as wellbeing and sustainability). As part of the process, the ABS examined the several dozen frameworks and indicator sets emerging from this work, and distilled valuable insights from them. But none has yet emerged as the definitive approach and moreover it was important that the indicators be relevant to Australian concerns.

Some statistical initiatives aim to choose measures which relate directly to government policy - the European System of Social Indicators, for example. Many of the indicators shown in Measuring Australia’s Progress may assist the design and evaluation of government programs. But the indicator suite has not been chosen with that application in mind. The publication is meant to inform general public discussion of national progress, not to be used as a scorecard for government.

As noted above, the key ingredient in forming the dimensions of progress has been the extensive consultation process with key stakeholders and the Australian community.

Within this context, the following framework of indicators was formed:

Figure 1: DIMENSIONS OF PROGRESS

Economy
Key economic stocks and flows
• national income
• national wealth
• consumption
• capital formation
• saving
Other expressions of (or influences on) economic performance
• productivity
• inflation
• competitiveness
• openness
• knowledge and innovation
Society
Key areas of social concern
• health
• education and training
• work
• economic disadvantage (poverty)
• economic resources of households
• housing
• crime
• culture and leisure
Other expressions of (or influences on) social progress
• communication and transport
• social attachment
• governance, democracy and citizenship
Environment
Key environmental subsystems
• land - land clearance and land quality
• marine ecosystems
• inland waters
• atmosphere - air quality
• plants and animals - biodiversity and invasive species
Other expressions of (or influences on) environmental quality
• greenhouse gases
• waste



Selecting the progress indicators

When sieving through the thousands of potential indicators of national progress, the ABS had regard to several criteria, including the following:
  • the need for a measure of outcome for each aspect of progress, rather than measures of the inputs or processes that generate the outcome. For example, when developing measures for the health dimension of national progress, indicators of the health status of the Australian population were sought, rather than, say, indicators of diet or smoking habits or public expenditures on hospitals;
  • the need for indicators that encapsulated as comprehensively as possible the given dimension of progress for the whole of Australia, rather than being confined to particular aspects, regions, subpopulations or industries;
  • the need for indicators that were sensitive to the underlying phenomenon expressed by the dimension of progress;
  • the need for indicators for which there were annual data covering the past decade;
  • the need for indicators that could be disaggregated, where possible, by region or population subgroup, so that it was possible to detect any heterogeneous trends underlying that national trend; and
  • the need for indicators whose meaning would be intelligible to the general reader.

For some dimensions of progress, it has not yet been possible to compile an indicator that satisfies all these criteria. In such circumstances the best available proxy or several proxy indicators as interim progress measures have been used, pending further statistical development work.

The above process resulted in a suite of around ninety indicators that, in the view of the ABS, would allow readers to formulate their own judgments about whether and how Australia has progressed during the past decade. To further assist readers it was decided to develop a subset of fifteen ‘headline indicators’.


Choosing the headline indicators

To be eligible for inclusion in the headline subset, an indicator was required to satisfy a further criterion, namely that most Australians would agree that movements in the indicator can be unambiguously associated with progress, other things being equal. The reason for imposing this additional criterion was to allow readers to run their eyes over a compact suite of headline indicators and form a quick summary judgment about which aspects of national life (taken individually) have shown progress and which have shown regress.

Inevitably the selection of the headline indicators using the above criterion was a difficult process. Distilling all the indicators down to the more compact headline set was easier for some dimensions of progress than for others:
  • Economic progress can be encapsulated fairly well in just one stock indicator (national wealth per capita) and one flow indicator (national income per capita). Money provides a common measuring instrument that allows economic indicators to be consolidated in this way. This is not to say that the other economic indicators - such as investment, productivity and competitiveness - are unimportant, but their influence is in a sense encompassed by, or manifests itself, in the income and wealth indicators.
  • But it is not possible to select just a couple of indicators that encapsulate social progress. There is no measuring instrument that will consolidate progress across the key areas of social concern, such as health, education, work and crime, so separate headline indicators have been included for each.
  • Nor is it possible to select just a couple of indicators that encapsulate environmental progress. Thus, the ABS has included separate indicators for the key environmental subsystems, such as the land, the seas, inland waters and the atmosphere.

The upshot of this is that the headline suite shows just two economic dimensions, seven social dimensions and six environmental dimensions. These numbers have been misinterpreted by one commentator as a signal that the ABS attaches much greater importance to social progress or environmental protection than to economic growth. That is not the case as was explained explicitly in the publication.


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