Empirical measurement of sustainable welfare from the perspective of extended genuine savings

The original genuine savings (GS) model started from a concern mainly with unchanged capital: if the stocks of all forms of capital decline through time, welfare will decline, too, eventually leading to unsustainability. In other words, negative GS rates indicate unsustainability. In the context of...

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Bibliographic Details
Published in:Sustainable development (Bradford, West Yorkshire, England) West Yorkshire, England), 2007-05, Vol.15 (3), p.188-203
Main Author: Lin, Grace T. R.
Format: Article
Language:English
Subjects:
Comparative analysis
Economic resources
Empirical research
genuine savings
Income distribution
income inequality
Population growth
Savings
Socioeconomics
Standard of living
Studies
Sustainability
Sustainable development
sustainable welfare
Taiwan
United Kingdom
Welfare
welfare loss
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Summary:The original genuine savings (GS) model started from a concern mainly with unchanged capital: if the stocks of all forms of capital decline through time, welfare will decline, too, eventually leading to unsustainability. In other words, negative GS rates indicate unsustainability. In the context of sustainable development evaluation, however, income distribution and change of per capita welfare are two significant dimensions that the GS model has totally ignored and that need to be aptly incorporated into the model. This is because, behind a positive GS ratio, a country still faces other factors such as current income inequality and population growth, which may undermine the enjoyable sustainable welfare. This paper therefore adjusts the GS framework for these reflections and tests its application to the United Kingdom and Taiwan between 1970 and 1998. Our result shows that the United Kingdom has more depressed GS rates and more eminent sustainable welfare loss than Taiwan over the years. This result has been accordant with some prior research claims: many resource‐rich countries have achieved slow or no long‐term improvements in their standards of living. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.
ISSN:0968-0802
1099-1719
DOI:10.1002/sd.318