Can’t Get No Satisfaction? Measuring Economic Wellbeing Under the RMA

16 December 2015
By Kevin Counsell

Economic considerations are widely viewed as one of the important “threads” of the Resource Management Act 1991 (RMA). One key aspect of this is the concept of “economic wellbeing.” As part of the definition of sustainable management, s 5(2) refers to managing resources in a way which “enables people and communities to provide for their … economic … wellbeing.” Yet the RMA itself is silent on what economic wellbeing is, and how one could determine whether resource management decisions enable people and communities to provide for it.

In this paper published in Resource Management Journal, NERA Senior Consultant Kevin Counsell discusses how economic theory and practice can provide guidance in understanding and measuring economic wellbeing. The author explains how the concept of economic wellbeing is grounded in economic theory, and is closely linked to the economic concept of “welfare”—the overall “satisfaction” of people, households, and businesses engaged in, or affected by, economic activities or transactions. He also explores how methodologies such as economic impact analysis (EIA), which measure economic activity, have been widely used in RMA proceedings. Yet EIA often measures something quite different from wellbeing as economists would understand it.