Databank Develops Welfare Index
The Research Department of Databank Group, has developed a welfare index for Ghana to track the living standards of the people.
The Economic Reality Index (ERI) is to track improvement or otherwise in the living standards of the Ghanaian based on the basic necessities of life.
The index broadens the statistical measure of welfare to include cost of living (inflation), employment and quantitative variables in health, education, among other variables.
With the introduction of qualitative variables and the calculation of the cost of living based on the concept of the basic necessities of life, the Databank welfare index is more comprehensive than the earlier approaches used.
The index will be calculated on quarterly basis and will be announced by Databank research unit through its publications.
In 2004, Databank Research began the process of developing a welfare index in line with the concept of the misery index developed by Arthur Okun (An American Economist).
The original misery index sums up inflation and unemployment which deterioration creates social and economic cost. Other economists in subsequent years extended the misery index to include economic indicators such as the Gross Domestic Product (GDP) and interest rates.
The ERI is made up of low and middle income sub-indices, with the overall index being the weighted average of the two. The sub-indices are the Agbobloshie Index (Low Income) and the Oxford Street Index (high income).
It is expected that the index will help in the evaluation of the public policy in the provision of the basic necessities of life.
The sampling for the index was done in selected areas in the Greater Accra Region. This is premised on the fact that the broad social characteristics of Greater Accra (i.e. Ga rural, urban poor and urban populations) typify the socio economic population groupings of the entire country.