The Index of Sustainable Economic Welfare: A Comparison of Two Italian Regions

The Index of Sustainable Economic Welfare (ISEW) proposed by Daly and Cobb in 1989 provides a more down-to-earth representation of the well-being of a society than GDP does, since its definition involves also variables that are not included in the conventional national accounts (such as social and environmental issues). Recently there has been an increasing interest in calculating this index also at local levels. Following this strand of literature, aim of this paper is to provide a comparison between ISEW and GDP trends for two central Italian regions, Tuscany and Marche, over the years 1999-2009. In particular, we try to explain how differences in the level of GDP are reflected in differences in ISEW levels between these regions. Finally, we discuss and propose further adjustments in calculation of the ISEW.