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Criteria for choosing headline indicators
Headline indicators
Measures of Australia's Progress is designed for the Australian public, and the commentaries are meant to be easily understood by readers who may not be expert in either the subject matter or statistical methods. In many cases, our choice of indicator has had to strike a balance between considerations of approachability, technical precision, and the availability and quality of data.
The headline indicators in this publication are concerned with assessing dimensions of Australia's progress, not with explaining the underlying causes of change.
In the view of the ABS, a good headline indicator should:
- be relevant to the particular dimension of progress
- where possible, focus on outcomes for the dimension of progress (rather than on say, the inputs or processes used to produce outcomes)
- show a 'good' direction of movement (signalling progress) and 'bad' direction (signalling regress) - at least when the indicator is considered alone, with all other dimensions of progress kept equal
- be supported by timely data of good quality
- be available as a time series
- be available at a national level
- be sensitive to changes in the underlying phenomena captured by the dimension of progress
- be summary in nature
- preferably be capable of disaggregation by, say, geography or population group
- be intelligible and easily interpreted by the general reader.
For some dimensions, it is not yet possible to compile an ideal indicator meeting all these criteria. So a proxy or no indicator has been presented, pending further statistical development work by the ABS or other researchers.
Process of developing headline indicators
When deciding which statistical indicators should be used to encapsulate each aspect of Australian life, we were guided by expert advice as well as the criteria listed above. During the development of MAP, the ABS undertook wide-ranging consultation with experts and the general community of users regarding the indicators that would be ideal for each aspect of Australian life and the best approximations to those ideal indicators that are currently available. For some aspects - health, crime, income, productivity and air quality, for example - there was already some broad consensus regarding indicators that would meet MAP's criteria. But for other aspects - social cohesion, democracy and governance and biodiversity, for example - the effort to develop statistical indicators is more recent, and stakeholder agreement has not yet been reached. For the newer or less settled aspects, MAP generally provides an array of indicators and invites readers to form a view about progress.
Our first step was to take each dimension of progress in turn, and to ask ‘Why is this dimension particularly important to Australia's progress? What are the key facets of progress in that dimension that any headline indicator should seek to express?’
There were usually several competing indicators that might be included. In choosing among them, each of the criteria were considered, as illustrated below.
Indicators should focus on the outcome rather than, say, the inputs or other influences that generated the outcome, or the government and other social responses to the outcome. For example, an outcome indicator in the health dimension should if possible reflect people's actual health status and not, say, their dietary or smoking habits, or public and private expenditure on health treatment and education. Input and response variables are of course important to understanding why health outcomes change, but the outcome itself must be examined when one is assessing progress.
It was also judged important that movements in any indicator could be positively or negatively associated with progress by most Australians. For instance, one might consider including the number of divorces as an indicator for family life. But an increase in that number is ambiguous - it might reflect, say, a greater prevalence of unhappy marriages, or greater acceptance of dissolving unhappy marriages.
Applying this criterion relating to signal depends crucially on interpreting movements in one indicator, assuming that the other indicators of progress are unchanged. For example, some would argue that economic growth has, at times, brought environmental problems in its wake, or even that the problems were so severe that the growth was undesirable. Others would argue that strong environmental protection might be retrograde to overall progress because it hampers economic growth. However, few would argue against economic growth or strong environmental protection if every other measure of progress was unaffected: that is, if growth could be achieved without environmental harm, or if environmental protection could be achieved without impeding economic growth. Of course, although keeping other things equal might be possible in theory, it seldom, if ever, occurs. The links between indicators are important, and Measures of Australia's Progress 2004 discusses these links after trends in the individual indicators have been analysed.
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