What is an indicator

Indicator44 tracking is the most commonly employed technique to measure changes in

well-being. Depending on the context and the goal of the well-being measure, indicators are chosen and monitored accordingly. As noted in Chapter 3, where different well-being measures were reviewed, indicators are generally aggregated to gauge overall well-being.

Indicators are also used extensively for management and policy to assist and guide decisions impacting on well-being. Trends in indicators can be used both to raise awareness of new issues and to evaluate the effectiveness of implemented policy. Indicators also serve as a good performance measure as they allow comparison both within and between countries.

Economic indicators are well established, and have been used since in the 1940s (i.e. GDP. Environmental indicators are more recent. According to Hammond et al., (1995) the Canadian government instigated the development of environmental indicators in the late 1980s to simplify information and improve communication on the state of the

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According to (Hammond et al., 1995, p. 1) the word indicator comes from “the Latin verb

indicare, meaning to disclose or point out, to announce or make publicly known, or to estimate or put a price on”.

environment. Around the same time, the Dutch government45 undertook similar measures, and started using indicators to report to the public on how successfully environmental goals were being met. A request from the G-7 economic summit in 1989 resulted in the OECD developing environmental indicators.

The term ‘social indicators’ is traced to Bauer’s (1966) edited book with this title. Despite social data being recorded for some time, data were not collated into statistics until the early 1970s. This provided quantitative descriptions of social conditions and trends to direct policy in the USA (Duncan, 1974). Around the same time the OECD

initiated similar efforts to use social data to improve policy. The report “List of Social

Concerns Common to Most OECD Countries” (1973) was a response to the need articulated at the 1970 OECD meeting for increased attention to be given “to the qualitative aspects of growth, and to the formulation of policies with respect to the broad economic and social choices involved in the allocation of growing resources" (OECD, 1973, p. 3). Table 5-1 offers a selection of definitions that describe the roles and purposes of indicators.

Table 5-1: Indicator definitions Advisory

Committee on Official Statistics (2009, p. 5)

An indicator is a summary measure related to a key issue or phenomenon that can be used to show positive or negative change. The evaluative nature of an indicator distinguishes it from the descriptive nature of statistics.

Hammond et al., (1995, p. 1)

[An indicator is] something that provides a clue to a matter of larger significance or makes perceptible a trend or phenomenon that is not immediately detectable.

OECD (2008, p. 13) An indicator is a quantitative or a qualitative measure derived from a series of observed facts that can reveal relative positions… evaluated at regular intervals, an indicator can point out the direction of change across different units and through time.

United Nations Indicators provide a simple summary of a complex picture, abstracting and presenting in a clear manner the most important features needed to support informed decision-making.

Patterson and Jolland (2004, p. 319)

… an indicator is not merely a number or a statistic. It is a carefully selected operational measurement of some theoretical concept or idea. It is selected to inform the decisions of a clearly defined audience and attempts to measure the essential characteristics of a concept in the most efficient

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Led by Albert Adriaanse from the Dutch Ministry of Housing, Physical Planning, and Environment, who has written extensively on environmental indicators.

way possible. Hunt et al.,

(2014, p. 153)

[Indicators] are used as a vehicle for communicating information in a summary form about issues important to stakeholders. Therefore, the choice of indicators must not only match public and political needs, but also be analytically sound, measurable and easy to interpret.

These definitions show there are many ways to describe an indicator. In general it is agreed that an indicator is intended as a summary measure to show change and inform decision-making.

5.1.1 Indicator and variable terminology

For future clarity, a brief pause to discuss the use of the words ‘variable’ and ‘indicator’ is necessary. The distinction is not always clear in the literature especially in relation to systems.

Bossel (1998) refers to ‘indicator’ to assess the system state. In contrast, Vester (2007) prefers to use ‘variable’ to describe the nodal points in a system that are flexible and change over time as a result of interacting. The word ‘indicator’ is reserved to describe variables that show quick rates of change. Hürlimann (2009) likewise uses the term ‘indicator’ specifically to describe variables that can be measured to show change over time.

The word ‘variable’ can also be used to describe an aggregation of indicators (Vester, 2007; Hürlimann, 2009). It is also possible for an ‘indicator’ to be broken down in more detail, at which point the indicator becomes a ‘variable’. Therefore, depending on the level at which you are operating, the words ‘variable’ and ‘indicator’ can be considered to be the same. Indicators and variables can be either qualitative or quantitative measures. The terms ‘variable’ and ‘indicator’ are used interchangeably in the literature. In this dissertation both words are used to describe the components that interlink in a system.