Why Does It Matter What We Measure?

During a recent podcast, economist Justin Wolfers told us that. “There’s two things in the world; there’s economic statistics which I think correspond to reality, and there’s the vibe and how people talk…”

According to the statistics, households are spending and workers are switching jobs like they do during prosperous times. Similarly, the Dow and new business numbers are up. And also, the GDP is growing, the rate of inflation has come down, and unemployment is at all-time lows.

Asked how it’s possible that people are “sour” on the economy, scholars at the American Academy of Arts and Sciences say we are using the wrong metrics. However, they have a solution.

Measuring Well-Being

CORE Score Indicators

Our new well-being metric is called the CORE Score. (CORE is the Commission on Reimagining Our Economy.)

Looking at CORE, we see a metric that takes us close to people’s heads and homes, while, at the county level, it looks at the past and the present.

Their four categories are:

• Economic Security: relates to meeting everyday needs and rough patches too. More precisely, they measure “household financial resilience, not housing burdened, and poverty.”
• Economic Opportunity: involves the confidence that the future can bring a better life. Here, they focus on labor force participation, education, wage growth.
• Health: relates to accessible care and expectations for a long life. For health, the indicators are healthcare coverage and life expectancy.
• Political Voice: is about the power and control that let us influence our environment. That took them to their representatives’ quality, voter turnout, and civic participation.

CORE Score Maps

Dominated by beige and brown, the Economic Opportunity maps are pretty dismal. Meanwhile, Health is happier territory.

Economic Opportunity

With 3.80 as the average, we can see why the nation has a gloomy economic outlook:

Health

At 7.83 out of 10, the Health metric points to more satisfaction:

Our Bottom Line: Economic Measurement

I always think of two reasons that, when measuring well-being, our metrics matter:

1. We treasure what we measure.
2. We manage what we measure.

My sources and more: In this podcast, economist Justin Wolfers echoed a WSJ article that described the CORE Score. From there,  it made sense, firsthand, to visit the American Academy of Arts and Sciences website.