Source: via Larry on Pinterest



The World Policy Institute has just published an interesting article titled “Brave New Math.” It’s focus is question whether the GDP (Gross Domestic Product) of a country is the best metric to use to judge a nation’s well-being. However, I think a number of points made can be applied to education policy issues, too, and the emphasis on being data-driven instead of being data-informed and our narrow focus on standardized test results — for measuring teacher quality and student learning.

Here are some excerpts:

Even its creator, however, realized the limitations of GDP. In 1934, Kuznets warned, “the welfare of a nation can scarcely be inferred from measurement of national income.” He wrote again in 1962, “distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long run.” In other words, GDP and its components can and do give us a measure of how much we produce and consume—but reflect none of the qualitative aspects of the economy. GDP cannot answer such essential questions as whether we are consuming too much of the wrong things or saving too little. To any government statistician tallying GDP, $100 spent on textbooks is sadly no more valuable to society than $100 spent on cigarettes….

GDP as a statistic may have fallen victim to the phenomenon of Goodhart’s Law. Devised by an adviser to the Bank of England in the 1970s, the law states that as soon as an indicator is relied upon for policy decisions, it stops being effective. For example, the police can reduce the rate of shoplifting by diverting more resources from other crime-fighting activities. Shoplifting rates go down, but other crime rates go up. As a result, shoplifting becomes a useless indicator of overall crime trends. In this respect, when a particular yardstick like GDP is used as a performance indicator of a complex system—like a national economy—the government may choose to target the measure, improving its value but at other costs to the country. As such, GDP may improve, but it becomes less useful as a measure of the broader economy and national well-being….

By going beyond simple GDP and looking at a diversity of timely data we can better diagnose our economic health. In the global age, new economic thinking needs to be oriented around developing human capital, not blindly stoking GDP.

What do you think — are there some parallels here?