Abstract
This paper surveys and evaluates the possibilities and limitations of sustainability indices from the point of view of meaningfulness. A sustainability index is defined as meaningful if it allows unambiguous orderings of the relevant ‘situations’ over time independent of the measurement units in which the variables describing the situations are expressed. The cases of commensurability and incommensurability are distinguished. In the former, the comparison of situations is unambiguous be-cause all legitimate choices of measurement units can be accommodated on the basis of exogenously given relationships among the variables. These relationships may define a monetary welfare-metric or a bio-physical effects-metric. In the case of incommensurability, common approaches (both cardinal and ordinal) may fail to yield meaningful indices. A systematic assessment of which indices are meaningful in which circumstances is provided.
Acknowledgement
I am grateful to Udo Ebert, Friedrich Schneider, Armin Schmutzler, Christoph Weber, Cees Withagen and Pascal Wolff for useful comments on an earlier version.
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Welsch, H. (2005). Constructing Meaningful Sustainability Indices. In: Böhringer, C., Lange, A. (eds) Applied Research in Environmental Economics. ZEW Economic Studies, vol 31. Physica-Verlag HD. https://doi.org/10.1007/3-7908-1645-0_2
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DOI: https://doi.org/10.1007/3-7908-1645-0_2
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