1383.0.55.001 - Measures of Australia's Progress: Summary Indicators, 2009
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 30/04/2009
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The past decades have seen growing public interest in assessing whether life in Australia and other countries is getting better, and whether the level of (or pace of improvement in) quality of life can be sustained into the future. The ABS commenced this work in 2000 and published the first major report in 2002. Since then major reports have been released in 2004 and 2006, and from 2005 onwards this summary status report has been released annually on the ABS web site.
The strong and growing international interest in this field is currently being coordinated by the OECD through its Global project on measuring the progress of societies and ongoing series of world forums. This project is grounded on the belief that the measurement of progress actually promotes progress. It is designed to support increased evidence based policy making in government and the community, encourage public debate and foster democracy. Although most regard Gross Domestic Product (GDP) as an important measure of progress, there are many who believe that it should be assessed in conjunction with other measures spanning society and the environment as well as the economy. This is the prime reason the ABS and many other countries look to an alternative approach (see 'National and International Initiatives').
A national statistical agency like the ABS has an important role to play in providing the statistical evidence that will allow assessments of progress to be made by users - those who formulate and evaluate policy, researchers and the community. Through its publications, electronic releases of data and other means, the ABS provides a rich array of statistics relevant to assessing progress. But the very size of the information base means that it is not so accessible to many people. Moreover, most ABS products provide a window into one or a few aspects of life in Australia - say, health, education, income, water - whereas a comprehensive assessment of progress demands that these aspects of life are examined together.
One outcome of measuring and reporting on progress is to make sense of the world we live in. One of the purposes of using indicators to describe progress is that they represent key aspects of a complex reality in an informative way.
At the highest level, macro indicators can reduce the complexity of all the details and processes associated with the progress of society to a few (seemingly) simple measures. A good example is GDP which incorporates all of the detail of national economic activity in a single number which encapsulates the concept of economic growth. Because such measures are fairly easily digestible, they can be useful in encouraging economic debate and they lend themselves to publication in the media.
To be truly useful in facilitating change, however, the development of such indicators must involve other key players: such as researchers, the community and government. Researchers can assist in ensuring that there is a sound scientific basis for the concept or idea being measured. Community processes help articulate social preferences and shared understandings. Government provides the assessment of these preferences (through democratic political processes) and ultimately, develops and implements relevant policy (Endnote 1).
Measures of Australia's Progress (MAP) provides a concise selection of statistical evidence that will allow Australians to make their own assessment of whether life in Australia is getting better. MAP is not intended as a substitute for the full array of statistics - indeed, the ABS hopes that many readers will be led to read other ABS publications on the aspects of society, the economy and the environment that particularly interest them.
There are many views of what progress means and how it might be measured. Some issues that arise when considering measurement include:
Different approaches to these issues might be taken by, say, a policy agency or an academic researcher or an interest group or a private citizen. This paper sets out the ABS approach.
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NOTIONS OF PROGRESS
Answering the question 'Is life getting better?' is not straightforward. It is clear, however, that to understand progress one must examine many aspects of people's lives - their health, the quality of their environment, their incomes, their work and leisure, their security from crime, and so on. So progress is multidimensional. Moreover, the dimensions of progress are interlinked. To earn more income, people may need to work longer hours and so have less leisure time. Increased industrial activity may generate more money to spend on health care, but it might also lead to more air pollution and hence to poorer health.
For this report, we have chosen to adopt progress as our primary concept. Progress here encompasses more than improvements in the material standard of living or other changes in the economic aspects of life; it also includes changes in the social and environmental areas. It encompasses:
While most would agree on the desirability of progress in, say, health, work or environmental protection, there is no universally accepted view of the relative importance of these aspects of Australian life. This publication contains an array of objective measures of progress; readers can apply their own subjective valuations to decide whether that array of measures implies that Australia is, on balance, progressing and at what rate. The measures (or indicators) can be loosely associated with one of the three broad domains of progress (society, economy and environment), although some relate to several domains. But the number of indicators associated with a domain is not a measure of the domain's relative importance to overall national progress.
This publication focuses on aspects of progress that are, in principle, susceptible to some objective measurement (e.g. life expectancy and educational qualifications). We have tended to avoid indicators that are either intrinsically subjective (e.g. happiness) or, while somewhat more objective, do not at present have generally agreed measures (e.g. political freedom). These aspects of life are important to Australians, but they do not yet lend themselves to statistical expression. That said, the ABS acknowledges there is growing interest in life satisfaction (or happiness) as an important aspect of life in Australia. A feature article which outlined some of the research into 'Life satisfaction' and the issues associated with its measurement was published in 2006.
Various temporal perspectives are provided within the publication. The major focus is on the history of progress over the past ten years in key social, economic and environmental aspects of Australian life. But a snapshot of the current (or, more strictly, recent) condition of the Australian society, economy and environment is also provided.
We have not made forecasts or entered into any direct discussion of sustainability. But we have, for some aspects of progress, reported on whether Australian stocks of assets (human, natural, produced and financial, and social assets) are being maintained.
Many aspects of progress relate to one another, and it is important to understand some of those links when assessing overall progress. The issues of concern that are considered span important aspects of life in Australia and enable readers to assess the country's capacity to maintain a healthy society, economy and environment. A feature article describing the 'Relationships between the domains of progress' was published in 2008.
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APPROACHES TO MEASURING PROGRESS
Mechanisms for choosing aspects of progress
We considered three broad approaches to choosing what aspects of progress to measure:
Some international statistical initiatives, such as the United Nations' Human Development Index (HDI), consider only a very few issues of concern common to all nations and so take quite a narrow view. (The HDI uses life expectancy, education and command over resources needed for a decent living (income) to assess development.) Other initiatives use a larger number of issues. But some issues of concern in Australia are almost uniquely Australian (salinity, for example, affects few other countries; and while much of western Europe is preoccupied with road congestion, this is not (yet) a major issue here - at least not when compared to the scale of congestion problems in the UK, for example). We examined international standards and publications when listing aspects of progress. But because of this publication's Australian focus, we did not judge it necessary to confine our list to aspects of progress for which international comparisons are possible. On occasion we refer to other countries' data when they are useful for setting Australian progress in context (in the area of health, for example). An article published in 2006 compares some key progress indicators across OECD countries ('Some International Comparisons of Progress').
Some statistical initiatives aim to choose measures which relate directly to government policy - the European System of Social Indicators, for example. Many aspects of progress included in this publication are potentially useful for assessing policy. However, they were not chosen with that in mind. Measures of Australia's Progress is meant to inform public discussion of national progress, rather than be used as a scorecard for government policy.
Other projects in this field have asked the public about what aspects of progress should be measured. Approaches used or suggested include:
We have not polled members of the public directly, but we have gathered broad views about what should be measured - first, by directly consulting stakeholders and experts in the fields of social, economic and environmental measurement; second, by distilling the views expressed during the ABS regular user group discussions regarding what data should be collected and published; and third, during a wide-ranging consultation process (in 2001 when the first issue of Measures of Australia's Progress was being written, and in further consultations after it was released). The second edition (2004) reflected changes arising from that feedback. To maintain consistency in reporting over time we have not made any major changes since then but plan to review the publication and progress indicators in the near future.
Whichever mechanism is used, it is important to remember that society's views of progress, and of what is important, change over time, and that there are also some aspects of progress - governance and democracy, for example - that are seen as important now, but for which there are no agreed statistical measures yet. The issue of ongoing statistical development is discussed in more detail at the end of this section.
ALTERNATIVE VALUES AND PREFERENCES
(a) See National and International Initiatives for more information.
Deciding how measures of progress should be presented
Three broad approaches to presenting the chosen indicators of progress were considered - the one-number approach; the integrated accounting approach; and the suite-of-indicators approach.
The one-number approach combines data about progress across a number of fronts (such as health, wealth and the environment) into a single composite indicator. Such composite indicators can be set in contrast with narrower indicators such as GDP. A single composite indicator of progress is very appealing, and while a range of measures have been proposed, further work is required to overcome some of the conceptual and technical limitations that need to be addressed for any one measure to gain widespread endorsement . (See the box below for more information on 'one-number' approaches.)
The accounting framework approach presents social, economic and environmental data in one unified system of accounts, measured in various units. Potentially this is a powerful tool for analysts, and a detailed set of accounts will complement indicators. However, such a complex system may be too difficult to interpret for anyone wishing quickly to form an overall view about Australian progress. Most importantly, Australia is still a long way from being able to develop such a system, although some environmental accounts (e.g. energy) have been developed to link the economy and the environment. The Dutch System of Economic and Social Accounting Matrices and Extensions (SESAME) is one of the most mature sets of integrated accounts - more details of SESAME can be found in 'National and International Initiatives'.
The suite-of-indicators approach sets out key aspects of progress side-by-side and discusses the links between them; readers make their own evaluations of whether the indicators together imply that Australia is on balance progressing and at what rate. This is the approach used in MAP (see the chapter 'How the progress indicators are presented'). The approach makes no overall assessment about whether the array of statistical indicators presented implies that life is getting better or worse. Instead, the suite of indicators leaves each individual reader to apply their own values and preferences to the evidence, and to arrive at their own overall assessment of national progress.
The ABS already publishes sets of indicators relating to social, economic and environmental concerns. Measures of Australia's Progress brings together all three domains by providing a set of headline indicators of progress that are tracked over time. In our view, this approach strikes a balance between the potential oversimplification of the one-number approach and the complexity of the accounting framework approach. The approach has been used by other countries, for example in the United Kingdom.
(a) See National and international initiatives for more information.
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CHOOSING THE PROGRESS INDICATORS
The progress indicators presented in this publication were chosen in four key steps.
Domains of progress
Most commentators consider that progress relates to issues clustered around broad areas of concern (domains of progress). Each domain in turn comprises a number of dimensions. Domain boundaries can be drawn in several ways.
The three domains comprise one system and are used as a convenient vantage point from which to assess progress. They do not purport to reflect a model of a world in which society, the economy and the environment can be separated: the economy depends on a functioning society which in turn depends on a functioning environment and economy. And although some concerns can, for the convenience of discussion, be attached loosely to society, the economy or the environment, they are all of importance to other domains - education and training, and work, for example, are of both social and economic importance; air quality is of social, economic and environmental importance.
Dimensions of progress
To identify the major dimensions, the three domains were considered in detail and partitioned into a number of dimensions of progress to ensure that the important aspects of social, economic and environmental progress were considered.
Once a list of dimensions of progress that might be presented had been compiled, we selected the subset that would be presented. These were divided into headline and supplementary dimensions. A balance had to be struck - if we showed too many dimensions, readers would not be able to assimilate them; if we showed too few, important aspects of progress would be omitted, and the overall picture might be biased. Ten to twenty dimensions seemed about right, and the choice of those was guided by a wide variety of people from inside and outside the ABS.
Currently, MAP is structured around 14 headline dimensions which reflect key aspects of life in Australia. Most are represented by a single headline indicator, but some, such as the natural landscape, use more than one. In addition, there are five supplementary dimensions, which although not given headline status are included in MAP in recognition of their relevance to the progress story.
During the design of MAP, we were guided by past and current ABS consultations. The ABS has a systematic program of consulting users of statistics about our statistical frameworks, surveys, products and analyses. Through this program, thousands of government agencies, academic researchers, businesses and business councils, community organisations and individual Australians have told the ABS what they think it is important that we measure. Our initial choices were tested through several further rounds of consultation undertaken specifically for MAP.
The final choice of measures was made by the ABS after taking account of the full spectrum of views. In so far as such selections are value-driven, they are distilled from the values and emphases expressed by the user community.
Indicators of progress
Our next step was to find an indicator to express each of these dimensions of progress. Our selection of indicators was guided by expert advice and by the criteria described in the box below.
Such a small set of indicators cannot paint a full picture of progress, and so supplementary indicators are included. These are presented in the major MAP reports. Some supplementary indicators give more information about dimensions of progress that are already represented by a headline indicator; others extend beyond the dimensions covered by the headline indicators.
We recognise that our sifting process means that MAP is both partial and selective - partial because not every dimension of progress is included, and selective because progress in each of the included dimensions is measured using just a few indicators.
The set of headline indicators plays a special role and particular considerations of values and preferences arise. While in the major reports MAP presents several hundred indicators overall, the more compact suite of headline indicators, covering the headline dimensions, is presented to help readers gain a quick understanding of the bigger picture about national progress. Accordingly, these are updated each year in the web-based report.
Headline indicators are distinguished from others by their capacity to encapsulate major features of change in the given aspect of Australian life. An additional criterion was applied to them - namely, that most Australians would agree that each headline indicator possessed a 'good' direction of movement (signalling progress, when that indicator is viewed alone) and a 'bad' direction of movement (signalling regress, when that indicator is viewed alone). This good-direction / bad-direction distinction raises unavoidably the question of values and preferences.
Once the ABS had drafted its initial list of candidate headline indicators, it undertook extensive consultation to test whether the list accorded with users' views. Whether a reader agrees with the ABS choice of headline indicators or not, he or she is able to peruse the whole suite of several hundred indicators in MAP and to assign high weight, low weight or no weight to each, as his or her own values and preferences dictate.
Some readers of MAP have tried to infer an ABS view about the relative importance of the different aspects of Australian life from the number of aspects discussed under the various headings, or from the number of headline indicators or the number of indicators overall. No such inference can or should be drawn. It is not for the national statistical agency to say what relative importance should be accorded to, say, changes in health, income or air quality. The ABS based its decision about how many indicators to present not on relative value but on statistical grounds - is it possible to find one or a few indicators that would encapsulate the changes in the given aspect of life? Is it possible to sum or otherwise combine indicators? To illustrate, changes in national wealth can be summarised well in one indicator (real net worth per capita), whereas half a dozen indicators are needed to depict significant changes in knowledge and innovation.
The place of values and preferences in MAP is well illustrated by its treatment of income distribution and equity. Many Australians believe that a more even distribution of income would represent progress; some would argue that, other things equal, any shift to more even distribution would be an improvement; others would argue only for a somewhat more even distribution than at present - say, one that reduces extreme disparities between high and low incomes. Other Australians would not accept that more even distribution of income would represent progress. Thus, when developing MAP, the ABS decided that measures of income distribution should appear only as supplementary indicators, not as headline indicators. Likewise, associated with many other dimensions of progress, MAP compares and contrasts the circumstances of different groups in the population.
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LINKAGES BETWEEN ASPECTS OF PROGRESS
A change in one aspect of national life is almost always associated with changes in others. Even if the linkages between the different aspects were relatively simple ('when this variable goes up by this amount, that variable goes down by this amount'), the occurrence of linkages poses problems for anyone developing a publication like MAP. And, of course, real-world linkages are much more complex.
One must decide how to present linkages between aspects of progress to the reader. To present particular linkages rigorously (and to present the full network of linkages comprehensively), one would need to provide a model of interactions between and within Australian society, economy and environment. The ABS puts considerable effort into developing statistical frameworks and data models that encapsulate the characteristics of entities (individuals, households, businesses, government agencies and other organisations) and the transactions, interactions and relationships among them. That work is informed by and seeks to assist 'scientific' models of the world; but developing such scientific models is not the business of a statistical agency. And a full-blown presentation of such models would be unsuitable for a publication like MAP.
On the other hand, ignoring linkages between the different aspects of progress could imply that an assessment of past progress can be achieved by a simple summation of changes in the indicators, or that a vision of future progress can be achieved by sketching a desirable or probable trajectory for each of the indicators. To forestall such an oversimplified view, we provide a general discussion of relationships among different aspects of progress in the introductory paper 'How the progress indicators are presented'. In addition, a feature article describing 'Relationships between the domains of progress' was published in 2008. These discussions have been distilled from the large body of Australian and overseas research, and have been tested through user review.
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These headline indicators form a core set of statistics for reporting on Australian progress. But those we have chosen will change over time, because, for example:
The commentary in the paper 'A framework for measuring progress' discusses what an ideal progress indicator might be for each dimension. The conceptually ideal indicators may, in some cases, help guide the continuing development of Measures of Australia's Progress.
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