Measuring regional welfare considering natural and cultural resources
The aim of this paper is to explore some of the theoretical aspects of measuring welfare in regional economies using a simple dynamic growth model. The focus is on natural and cultural resources, which are treated as capital stocks in the analysis. We use the concept of a social accounting matrix (SAM) to illustrate how the addition of income flows and net changes of various natural and cultural resources can be incorporated into a measure of welfare that is more complete compared to the standard net regional product/income. Furthermore, we propose how the set a theoretically “optimal” subsidy to compensate a cultural sector – in our example engaged in the pastoral activity of reindeer herding - for maintaining and upholding a cultural heritage.
Publisher: University of Otago
Series number: 510
Keywords: capital theory; cultural capital; dynamic economy; natural capital; SAM
Research Type: Discussion Paper