 | This article may be unbalanced toward certain viewpoints. (May 2013) |
| Part of a series on |
| Ecological economics |
|---|
 |
The Index of Sustainable Economic Welfare (ISEW) is an economic indicator intended to replace the gross domestic product (GDP), which is the main macroeconomic indicator of System of National Accounts (SNA). Rather than simply adding together all expenditures like the GDP, consumer spending is balanced by such factors as income distribution and cost associated with pollution and other unsustainable costs. The calculation excludes defence expenditures and considers a wider range of harmful effects of economic growth.[1] It is similar to the genuine progress indicator (GPI).
The Index of Sustainable Economic Welfare (ISEW) is roughly defined by the following formula:
ISEW = personal consumption
+ public non-defensive expenditures
- private defensive expenditures
+ capital formation
+ services from domestic labour
- costs of environmental degradation
- depreciation of natural capital
- ^ "GDP -- does size matter more than essence?". The Financial Express. Retrieved 28 August 2022.